What does it take to steal $2 billion from your own bank? According to a London High Court, all you need is 50 shell companies, a culture of fear, and four years to perfect the art of making money disappear.

Ukrainian oligarch Ihor Kolomoiskyi found out the hard way that his thorough looting of PrivatBank — Ukraine’s largest financial institution —has consequences. On 30 July, Justice Trower ruled that Kolomoiskyi and his longtime partner Hennadii Boholiubov (Bogolyubov) orchestrated a brazen fraud that nearly collapsed Ukraine’s entire banking system.

Ordinary oligarch theft this wasn’t. Kolomoiskyi and Boholyiubov, then Ukraine’s second and third richest persons, spent four years hollowing out Ukraine’s financial backbone while regulators watched—some bought off, others too intimidated to act.

The man behind the scheme

For international readers, Kolomoiskyi isn’t just any businessman.

He’s the oligarch who once controlled roughly 10% of Ukraine’s GDP through his Privat Group empire. His TV channel, 1+1, made Volodymyr Zelenskyy a household name long before anyone imagined the comedian would become president. His private militia helped defend Ukraine against Russian-backed separatists in 2014. His influence reached governorships, media empires, and the very heart of Ukrainian politics.

How to steal a bank in four easy steps

The London court laid out Kolomoiskyi’s playbook with forensic precision:

Step 1: Create the borrowers

Between 2010 and 2014, PrivatBank issued hundreds of loans to over 50 shell companies. These weren’t real businesses — most had no operations, employees, or purpose except to receive money. Kolomoiskyi and Boholiubov secretly controlled all of them.

Step 2: Move the money offshore

Those fraudulent loans were immediately transferred to corporate defendants in the UK and British Virgin Islands under the pretense of “prepayments” for goods. The court’s finding? None of the goods were delivered, and the payments were never returned. Cyprus was the key pipeline, with PrivatBank’s branch facilitating over $2.3 billion in foreign currency transfers.

Step 3: Recycle to hide the theft

When loans came due, new fake loans were issued to repay the old ones. This “loan recycling” created an illusion of solvency while the money flowed to accounts controlled by the oligarchs. In 2016, just before nationalization, PrivatBank issued a final $5.7 billion in “new loans” — a desperate attempt to cover the massive hole in the bank’s balance sheet.

Step 4: Create fake lawsuits for cover

In late 2014, as Ukrainian regulators began asking uncomfortable questions, 46 of the 50 shell companies filed lawsuits demanding repayment from their supposed suppliers. Courts issued favorable rulings that were never enforced. Justice Trower found that “the judgments in the 2014 Ukrainian Proceedings were collusively obtained” — legal theater designed to fool regulators.

The culture of silence

What enabled this massive theft? Fear.

The court found that senior PrivatBank employees, including top management, facilitated the scheme under direct orders from Kolomoiskyi and Boholiubov. Compliance failures weren’t accidental — they were deliberate, driven by intimidation and a culture where asking questions could end careers or worse.

Even National Bank of Ukraine officials faced threats when they tried to investigate. The court noted that Kolomoiskyi made threats against NBU deputy governor Kateryna Rozhkova, telling her he was “a hungry tiger in a cage” with “very long arms” who could reach her anywhere.

In Kolomoiskyi’s Ukraine, silence wasn’t golden — it was survival.

The oligarchs’ desperate defense

When cornered with overwhelming evidence, Kolomoiskyi and Boholiubov deployed every legal argument their top-tier counsel could muster.

Why would sophisticated oligarchs with unlimited legal resources make arguments a London judge would find “procedurally flawed”? The answer reveals just how desperate their situation had become.

Their primary defense was breathtakingly audacious: they claimed they repaid fraudulent loans through later “asset transfers” and “loan transformations.” According to this logic, you can’t defraud someone if you later “repay” them — even if that repayment comes from more fraudulent money.

Justice Trower quickly demolished this argument. The supposed “repayments” were not genuine but part of artificial schemes using further fraudulent loans.

It was circular fraud, not actual repayment.

Boholiubov throws Kolomoiskyi under the bus

Boholiubov claimed complete independence from his longtime partner in a move that backfired spectacularly. He suggested the scheme involved bank management acting without his knowledge or approval, essentially throwing Kolomoiskiy and PrivatBank’s management under the bus.

The court wasn’t buying it. Justice Trower examined Boholiubov’s reaction to devastating NBU audit reports that exposed massive related-party lending consuming over 70% of the bank’s assets.

A truly uninvolved chair would have demanded investigations and fired management. Instead, Boholiubov voted to reappoint the same Management Board and praised their “satisfactory” performance.

“I think that the Bank is correct to submit that Mr Boholiubov’s reaction to this highly critical report was the opposite of what a person in his position with no prior knowledge of these deficiencies would have done,” Justice Trower wrote. The judge found that Boholiubov’s lack of surprise at the audit findings “reflects and corroborates the other circumstantial evidence that they knew and approved of lending in the form of the loan recycling scheme.”

The silence that spoke volumes

Perhaps most damaging was what the oligarchs didn’t do. When confronted with evidence of massive fraud, neither demanded investigations nor took disciplinary action against management, which they now claimed had acted without their knowledge. They withdrew their witness statements, and neither appeared in court to testify under oath.

The court found “it is inherently unlikely that any of the steps in the Misappropriation were not known and approved by both of them.” The judge drew adverse inferences from their refusal to testify and their behavior throughout the proceedings.

The nationalization defense that never was

Kolomoiskyi attempted one final gambit: arguing that PrivatBank’s new management after nationalization had “consciously decided” to treat certain fraudulent transactions as valid when they signed off on 2016 financial statements. This “free-choice extinction” defense suggested the bank had voluntarily accepted the fraud.

Justice Trower noted this argument was never properly pleaded and would have been rejected for causing prejudice anyway. It revealed the desperation of oligarchs grasping at procedural technicalities.

Document destruction and deliberate obstruction

The court found that both oligarchs had destroyed documents that could have been evidence in the case. Justice Trower noted that Kolomoiskyi admitted in his disclosure certificate that his “general practice has been not to retain hard copy documents” and his “practice has been to dispose of the document immediately or once any action points have been completed.”

More damning, the judge found that “Mr Kolomoiskyi took deliberate decisions to procure the destruction of data which was capable of being relevant to the current proceedings.” The court determined that Kolomoiskyi’s approach to disclosure was to “delay and obfuscate for as long as possible in the hope that these documents would not come out.”

This behavior fits a pattern. The court found that Kolomoiskyi “seems to have regarded himself as above the law,”A while Boholiubov’s attempts to claim ignorance were undermined by his actions as chairman of the supervisory board.

From kingmaker to pariah

This judgment captures Kolomoiskyi at a remarkable inflection point.

The transformation has been swift.

• In 2019, Kolomoiskyi’s media empire helped propel Zelenskyy to the presidency.
• By 2021, the US State Department had banned him and his family from American soil due to “significant corruption.”
• The US Department of Justice has filed four separate civil forfeiture cases since 2020 through its Kleptocracy Asset Recovery Initiative, targeting hundreds of millions in American real estate allegedly purchased with laundered PrivatBank funds.
• Ukrainian prosecutors have reopened local investigations, and Kolomoiskyi was arrested in September 2023 on separate embezzlement charges.

Meanwhile, Ukrainian investigators report that Boholiubov illegally fled the country in July 2024 using forged documents and was temporarily residing in Vienna. Both maintain their innocence, but their legal options are rapidly narrowing — any appeal of the London judgment has been adjourned until October 2025.

How Boholiubov fled

The Great Escape: How Ukraine’s ninth-richest man slipped out of the country amid fraud allegations

Zelenskyy, meanwhile, has carefully distanced himself from his former media patron — a political necessity as Ukraine seeks international legitimacy and aid.

What this means beyond Ukraine

This isn’t just a Ukrainian story. The London judgment establishes crucial precedents for international asset recovery, applying Ukrainian civil law through English commercial courts. It creates a roadmap for other countries whose oligarchs have hidden stolen assets abroad.

For Ukraine’s international backers — the EU, IMF, and bilateral donors —this ruling sends a clear signal: foreign courts can hold influential figures accountable even when domestic institutions struggle to do so.

The bigger question

While PrivatBank can now pursue enforcement actions to recover assets in the UK and beyond, a fundamental question remains: can Ukraine’s courts deliver similar justice?

The London ruling proves the facts were there all along. The evidence was overwhelming. The legal framework existed. What was missing was the political will and institutional independence to act.

This oligarchic reach seemed to extend even to London.

According to the Law Gazette, Justice Trower expressed alarm after discovering that a draft judgment had been leaked to Ukrainian social media and Cypriot corporate service providers before the official announcement.

The judge told the court he was “very alarmed by some correspondence I received last night,” noting that the draft “seems to have been leaked in such a manner that it would become available on social media sites in Ukraine” and to “one of the corporate service providers in Cyprus.”

He added: “On the face of it, if there has been a leak which looks like it might have been, the court takes that very seriously indeed.” The Law Gazette reported that the source of the leak remains under investigation.

The London victory proves oligarchs can be held accountable—somewhere. Whether Ukraine can build that capacity at home remains the crucial test for a country still battling Russian aggression while trying to build a genuine rule of law.

Kolomoiskyi’s London defeat might be the beginning — or it might remain an exception that proves the rule about where real justice happens for Ukraine’s oligarchs.

Timeline: From fraud to judgment

• 2010-2014: PrivatBank issues over $2.3 billion in fraudulent loans via 50 shell borrowers
• 2014: Bogus repayment lawsuits filed in Ukrainian courts to create cover
• December 2016: National Bank of Ukraine declares PrivatBank insolvent and nationalizes it to prevent financial system collapse
• 2017: UK court grants freezing orders; PrivatBank files civil fraud claim in London
• 2018-2019: Legal disputes over jurisdiction; UK Court of Appeal allows case to proceed
• 2023: Full trial held in London High Court
• 30 July 2025: Final judgment confirms Kolomoiskyi and Boholiubov liable for $1.91 billion

This article was amended after publication to include the Forbes Ukraine data on why Privatbank was unable to sue Kolomoiskyi in Ukraine

What’s happening to PrivatBank now?

Ukraine nationalized its way out of crisis—now it can’t stop making money

Ukraine’s central bank reported on 31 July that inflation will moderate to 9.7% by December 2025, down from its May peak of 15.9%. This signaled monetary stability that exceeded many international expectations for a wartime economy.

The encouraging headline masks a troubling contradiction: Ukrainian families now pay more for basic groceries than their counterparts in EU countries, with butter costing 25% more than in Poland, according to Focus.ua analysis. This paradox — macro success alongside micro hardship — tests whether Ukraine can sustain the economic discipline that international lenders and reconstruction investors demand.

Central bank maintains credibility with a tight monetary stance

The National Bank of Ukraine kept its key policy rate at 15.5%, which would be considered restrictive in peacetime economies but demonstrates institutional strength that Western financial markets monitor closely.

“The NBU will stick to a rather tight monetary stance for as long as it is needed in order to ensure that inflation is steadily declining toward its 5% target over the policy horizon,” NBU Governor Andriy Pyshnyy said on 24 July during the monetary policy briefing.

The central bank revised its inflation trajectory, now projecting 9.7% in 2025, 6.6% in 2026, and a return to the 5% target only by 2027. This timeline that aligns with European Central Bank standards and signals Ukraine’s commitment to EU integration despite wartime pressures.

Real GDP growth projections remain modest at 2.1% for 2025, closely matching International Monetary Fund expectations of 2-3% growth and World Bank projections of 2% this year. This consensus among major multilateral institutions suggests Ukraine’s economic management has earned international credibility.

Foreign reserves cover more than five months of imports — exceeding the three-month standard that rating agencies use to assess emerging market stability — supported by continued international funding that maintains confidence among sovereign bond investors.

Household costs expose fragility behind stability

While macroeconomic indicators show stability, Ukrainian households face mounting cost pressures — a fact covered elliptically in the NBU report by the phrase “convergence of food prices.” The average Ukrainian food basket has become increasingly expensive, particularly affecting regions with damaged production capacity.

Weather-related harvest disruptions compound these pressures. The NBU expects agricultural improvements to help cool food inflation, but rising utility costs and excise tax increases offset these gains. Real wages are growing approximately 3-4% annually, providing some relief, but many households struggle with necessities despite overall economic resilience.

This contradiction between institutional success and widespread hardship raises questions about aid model sustainability and long-term economic transformation prospects.

International confidence hinges on continued discipline

Ukraine’s monetary achievement serves multiple strategic purposes that extend beyond domestic concerns. The country’s ability to maintain inflation targeting and currency stability while fighting an existential war demonstrates institutional resilience that reconstruction investors and EU accession evaluators closely monitor.

The contrast with Russia’s economic trajectory remains striking: while Ukraine maintains disciplined monetary policy at 15.5% rates, Russia’s central bank unexpectedly cut its rate by 200 basis points in late July — its biggest reduction since May 2022 — signaling growing economic pressures despite earlier rate hikes to combat inflation.

Yet the food price paradox illustrates Ukraine’s fundamental challenge: maintaining the macroeconomic frameworks needed for post-war integration while supporting a population under extreme stress. How Ukraine manages this balance will determine whether international support translates into genuine economic transformation or merely postpones deeper structural reckonings.

For foreign observers, Ukraine’s inflation report represents more than monetary policy — it’s a test case for whether a country can simultaneously fight for survival and build the institutional foundations for European integration.

Ukraine reversed a controversial oversight law on 31 July, a move that promises to restore the independence of key anti-corruption bodies. However, the damage may already be done: the EU has frozen $1.7 billion in aid, which puts more people at risk. Why did Brussels pull the brakes, and what will it take to unfreeze the funds? Here’s what you need to know.

1

What happened?

On 22 July, Ukrainians took to the streets in mass protests after the Verkhovna Rada hastily passed draft law No. 12414. The law aimed to place Ukraine’s premier anti-corruption agencies — the National Anti-Corruption Bureau (NABU) and the Specialised Anti-Corruption Prosecutor’s Office (SAPO) — under broader prosecutorial oversight.

Protesters saw this as an attempt to weaken the country’s flagship anti-corruption institutions. Days later, the European Union froze $1.7 billion in financial support — the first such move under the $57 billion Ukraine Facility fund. Another $3.8 billion now hangs in the balance.

On 31 July, facing pressure from protesters and foreign partners, the Verkhovna Rada repealed the law. This was a victory for civil society, but Brussels remains cautious.

2

Why did Brussels act now?

Since Russia’s full-scale invasion began, the EU has shown considerable patience with reform timelines. But patience has limits. The European Commission clarified that financial support depends on concrete, verifiable reforms — not just promises.

For years, Ukraine has pledged to protect independent anti-corruption institutions, something most Ukrainians see as a tangible result of the 2013-14 Revolution of Dignity. Brussels now believes those promises are eroding.

The hastily passed law on 22 July was the final trigger. Even though Ukraine repealed it nine days later, credibility was damaged.

3

Was this just about one law?

No. Behind the scenes, European diplomats had been signaling concerns for weeks. According to official commentary cited by Serhiy Sydorenko in European Pravda, the European Commission flagged structural problems during an 11 July subcommittee meeting — weeks before the controversial law was passed.

EU officials warned Kyiv of backsliding in anti-corruption policy, including slow appointments to key posts like the SAPO head and a lack of follow-through on previously promised reforms. While the protest and repeal made headlines, the decision to suspend funds had deeper roots.

The EU’s emphasis isn’t on a single legislative act, but on Ukraine’s broader governance trajectory. The freeze wasn’t a reaction — it was a culmination.

4

What’s the problem with NABU and SAPO?

NABU was created in 2015 to investigate high-level corruption. SAPO, its prosecutorial counterpart, was founded the same year to ensure such cases reach court. Together, they form Ukraine’s flagship anti-corruption structure.

Both agencies have delivered results — investigating former MPs and state-owned company executives, exposing schemes like Ukrzaliznytsia officials purchasing more than 11,000 COVID-19 PCR tests at inflated prices. But they’ve also faced internal pressures and political interference.

The now-repealed law would have effectively removed their operational autonomy by altering oversight mechanisms — precisely what the EU wants Ukraine to safeguard. Repealing the law was necessary, but Brussels is watching what comes next.

5

Is it just about NABU and SAPO?

No. The Asset Recovery and Management Agency (ARMA) presents an even bigger problem. ARMA handles confiscated assets from corruption cases: bank accounts, apartments, luxury cars, and company shares. The concept is straightforward — crime shouldn’t pay.

But ARMA has a serious credibility problem. Assets have vanished, and auctions have been opaque, with luxury items sold at suspiciously low prices. Some of ARMA’s officials are under investigation.

A March 2025 audit by Ukraine’s Accounting Chamber revealed the scope of dysfunction. Of more than 100,000 court rulings instructing ARMA to manage seized assets, only 1% were transferred, leaving over UAH 39 billion unmanaged. Over 61% of disposed assets lacked proper market valuation, resulting in estimated losses of UAH 769 million. Staff shortages and underfunding (just 56% of needed resources) have impeded the agency’s ability to conduct proper oversight.

The EU demands serious structural reform: a public asset registry, transparent auction procedures, and an independent supervisory board. Without these, the additional $3.8 billion will be suspended.

6

How does the EU make these freezing decisions?

The Commission’s actions are tied to the European Reform Agenda (ERA), a jointly agreed-upon roadmap between Ukraine and the EU. The ERA outlines reforms needed to keep financial and political support flowing, covering judicial reform, public administration, democratic standards, and anti-corruption.

The Commission can recommend a funding freeze when Ukraine fails to meet ERA milestones. This decision must be endorsed by a qualified majority of EU member states — not a unilateral move, but a multilayered institutional process. Bodies like the European Court of Auditors and the European Anti-Fraud Office also provide input.

This wasn’t a political knee-jerk reaction. It was a coordinated decision by multiple EU institutions concluding that Ukraine had failed to meet key transparency and institutional independence conditions.

7

Is the EU turning its back on Ukraine?

Far from it. Brussels is doubling down on standards. After missteps with countries like Hungary, where Viktor Orbán took EU money while gradually dismantling democratic institutions, Brussels learned that early neglect leads to long-term democratic backsliding.

With Ukraine, the stakes are higher. Never before has the EU committed so much money, and never to a country at war. The EU is holding Ukraine to higher standards precisely because it wants Ukraine to succeed.

8

What’s at risk for Ukraine financially?

The war has ballooned Ukraine’s budget needs. Western aid helps fund pensions, salaries, schools, and basic services — not just weapons. The frozen $1.7 billion was part of that lifeline. The potential additional $3.8 billion represents almost 10% of the total Ukraine Facility.

Even temporary freezes hurt. Creditors grow nervous. Budget planning becomes chaotic. Most importantly, public trust in government commitments begins to erode. Credibility becomes your most valuable currency when you’re fighting a war while depending on international support.

9

Does war excuse reform fatigue?

Ukrainian officials argue that wartime makes reforms harder to implement. Brussels has responded that being at war makes transparent, accountable institutions more critical, not less. When you’re depending on billions in international aid, donors need absolute confidence that money is being handled properly.

The EU’s position is clear: wartime doesn’t justify rolling back anti-corruption measures — it makes them more urgent.

10

Can Ukraine reverse the freeze by year-end?

Yes, and there are signs of movement. Repealing the oversight law on 31 July was a first step. Ukraine must demonstrate “verifiable corrective steps” — actions, not promises.

This means protecting NABU’s independence, restoring SAPO’s prosecutorial authority, and ensuring both agencies can operate without political interference. Some draft laws are already in the works, and civil society remains vocal.

According to European Pravda, EU officials have reportedly received informal commitments from Ukraine to pass corrective measures in the autumn. These will be scrutinized not only for their content, but also for how transparently and independently they’re implemented. There’s quiet hope that the suspension can be reversed before year-end — but only if progress becomes visible soon.

The $1.7 billion freeze stems from three unmet reform indicators:

• Territorial reorganization of executive power (draft law #4298, registered in 2020, costing $570 million in lost funding);
• Selection of High Anti-Corruption Court judges (legally enabled in June but still not implemented);
• ARMA reforms (already discussed above).

Additionally, Ukraine faces another overdue commitment — vocational education reform legislation due by the end of June — which could trigger further funding penalties in the next reporting period.

The EU’s rules give Ukraine 12 months to complete any reform milestone after the original deadline has passed. This grace period means the funds can still be released in full — but with a delay. However, Kyiv has already lost four of those twelve months. In the case of ARMA, that delay is even more tangible. Due to the agency’s non-compliance with basic criteria, Ukraine has definitively lost out on $85 million in performance-based funding tied to asset recovery benchmarks.

11

Can Ukraine save the $3.8 billion?

Saving the $3.8 billion requires comprehensive ARMA reform. Ukraine needs legislation ensuring transparency, accountability, and protection from political interference. This means proper oversight mechanisms, clear asset management procedures, and eliminating corruption opportunities.

The reforms must address ARMA’s documented failures: the suspicious auctions, unexplained losses, and criminal investigations of top officials. Brussels wants systemic changes, not personnel shuffles. A reliable asset registry, transparent valuation processes, and adequate staffing are non-negotiable.

If Ukraine delivers these reforms, the $3.8 billion will remain available. If not, it will join the frozen $1.7 billion.

12

What happens if Ukraine fails both tests?

Failure to restore NABU and SAPO independence keeps the $1.7 billion frozen. Failure to fix ARMA suspends another $3.8 billion. That’s $5.5 billion at risk — nearly 10% of the entire Ukraine Facility.

Beyond immediate financial impact, failure damages Ukraine’s credibility with other international donors and delays EU accession. The EU has clarified that Ukraine’s membership path depends on building accountable, transparent institutions.

The stakes are particularly high because Ukraine’s citizens have demonstrated a desire for better governance. If the government can’t respond to domestic and international pressure for reform, it raises fundamental questions about its commitment to European integration.

13

Why does this matter beyond Europe?

The United States, World Bank, and other international donors are watching closely. For Ukraine, credibility is currency. Others might follow if the EU — Ukraine’s strongest backer — loses confidence. That could slow financial flows and military and political support.

The outcome will help define the kind of state Ukraine is becoming and whether the West can demand reform while supporting a war partner.

×

Estonia’s permanent representative to NATO, Ambassador Jüri Luik, said on 28 July 2025, on Vikerraadio — Estonian Public Broadcasting’s main radio channel — that Europe cannot realistically mount a credible defense against Russia without Ukraine’s involvement, highlighting Ukraine’s indispensable role in sustaining European security architecture.

“If Europe manages to achieve some kind of peace or truce [in Ukraine — EMP], or if we talk about Europe being able to defend itself against Russia, it is very difficult to imagine such a defense without Ukraine,” Luik said.

European and NATO intelligence agencies have increasingly warned of a growing hybrid and conventional threat from Russia, particularly toward NATO member states. Moscow appears to be preparing a multifaceted campaign — including sabotage of critical infrastructure, disinformation operations, and electronic warfare — aimed at projecting pressure beyond Ukraine’s borders. In the Baltic region, disruptions to undersea cables and power infrastructure — including the Estlink cable between Estonia and Finland — have raised alarms over possible sabotage by the so-called Russian “shadow fleet.”

Luik emphasized in the interview that Ukraine’s large and battle-hardened ground forces are essential not only for defending its own territory but also for enabling a cohesive European defense posture — one that can operate independently of US military dominance and deter potential Russian aggression.

Estonia and Ukraine have deepened bilateral cooperation since Russia’s full-scale invasion in 2022, including joint military training, intelligence sharing, cyber defense collaboration, and political coordination within NATO and EU frameworks. Estonia now allocates more than 4% of its GDP to defense spending and has emerged as one of Ukraine’s strongest advocates in both Brussels and NATO, underscoring a shared strategic view of Moscow’s threat.

Every time I look at my bank card, I smile. Not because I have so much money, but because the bank is called PrivatBank.

A “private” bank. Except it’s not. Founded in 1992 by future oligarchs Ihor Kolomoyskyi, Hennadii Boholiubov, and Serhiy Tihipko, it was nationalized in 2016 after it emerged that just 5% of its loans had gone to stable, well-known companies. The rest went to offshores or hastily formed shell companies.

Since then, PrivatBank has stayed in state hands. So every time I make a payment, I’m making a small contribution to the state budget.

From market reform to wartime statism

Despite the fate of PrivatBank, before Russia’s full-scale invasion, Ukraine had been moving slowly but steadily toward a leaner government. Some of the old Soviet-style giants had been cut down to size. The farmland market had opened. Selling minority stakes in key state-owned firms was on the table.

By the third quarter of 2024, the National Bank of Ukraine reported that state-owned banks controlled 53% of all banking assets and held over 60% of all retail deposits.

Government spending has grown dramatically, too: Ukraine’s Finance Ministry announced the 2025 state budget allocates 26.3% of GDP to defense and security. The state now controls not only banking and defense production but also energy and much of the digital economy.

It’s easy to see why—survival trumps ideology—but without a clear plan for scaling back later, this state-heavy approach could become a problem in itself.

Geese that lay golden eggs

Ukraine’s banks have earned nearly UAH 255 billion (€6 billion) since the start of the full-scale war, Ukrainian Business News calculated.

In 2024 alone, Opendatabot found banks made a record UAH 104 billion (€2.5 billion) in net profits—20% more than in 2023—and paid UAH 83.7 billion (€2 billion) in taxes on those profits, almost twice as much as the year before.

Seven state-owned banks made UAH 67.2 billion (€1.6 billion), accounting for 65% of the sector’s total profits.

International funding advantage

Part of this success comes from access to cheap international loans. The country’s second-largest bank by assets after PrivatBank, Oschadbank, for instance, uses funds from the European Bank for Reconstruction and Development to finance solar and wind energy projects that help stabilize the grid—often at below-market rates. That gives state-owned banks a big advantage.

Even the IMF has taken notice. In its June 2025 report, the International Monetary Fund warned that expanding state control in banking should only happen when necessary for stability or national security—and only during martial law. It also advised Ukraine to reduce state ownership once the war ends.

Strategic sectors under state command

Banking isn’t the only sector under government control. In energy, the state-run company Ukrenergo keeps the grid running despite regular Russian attacks—allowing every other part of the economy, from heavy industry to small service providers, to continue operating.

Because of this, even private households can maintain a semblance of normality under wartime conditions. Ukrenergo does this with the help of low-interest loans from European donors.

Critical infrastructure rebuilding

Oschadbank, for instance, channels donor finance into 30-megawatt battery farms and hybrid solar-wind parks—critical infrastructure the country urgently needs more than ever.

Russian forces have destroyed 70% of Ukraine’s available generation capacity since the start of the full-scale war, and the key to keeping the lights on lies in decentralization: smaller, distributed energy sources are harder to hit and easier to repair than large centralized power plants.

In defense, the old Ukroboronprom group has been turned into a new company called Ukrainian Defense Industry. The Stockholm International Peace Research Institute reported its revenue rose 69% in 2023 to $2.2 billion (€2 billion).

Tech sector under special regime

Agriculture is still mostly private, but the World Bank documented how the state controls grain exports and fuel allocation across the country.

Even the IT sector works under a special government regime. The Diia City programme—a virtual free economic zone that offers a flat 9% profit tax—now includes more than 1,640 companies and nearly 100,000 tech professionals, according to Ukraine’s Ministry of Digital Transformation.

Controversial seizures

Not all government takeovers are popular. One high-profile case was the seizure of IDS Ukraine, which makes the beloved Morshynska mineral water. Interfax Ukraine reported that the entire company was confiscated because of minority Russian ownership.

Critics say that such moves, while understandable during wartime, create risks for private business—especially when a brand controls 40% of the market.

Moves like this can shake consumer confidence, but more critically, they deter potential investors. Who would risk their capital in a country where an entire company might be seized simply because another shareholder has a questionable ownership structure?

These actions also raise uncomfortable questions: are such practices compatible with democracy? Is Ukraine truly the democratic state it claims—or aspires—to be?

Missing exit strategy

All things considered, Ukraine’s wartime economy has so far held up pretty well. The Kyiv School of Economics forecast GDP growth around 3% this year, inflation dropped below 10% in early 2025, and the banking sector is stable and profitable.

Talk of privatization has gone quiet. The Ministry of Economy has mentioned the idea of selling small stakes in state companies after the war, but there’s no clear plan or timeline. And most foreign investors remain hesitant—especially those who aren’t prepared to take big risks.

At the same time, Ukraine’s international allies are growing impatient. The IMF warns that permanent state dominance is bad for competition.

Brussels, eyeing EU accession, wants governance standards that private capital can trust. Kyiv faces a tightrope: keeping scarce capital flowing while signaling that the state’s wartime reach is temporary.

Undoing the emergency state

There are ways forward. One idea is to introduce “sunset clauses”—laws that would require the government to reduce its ownership in major companies to less than 25% within five years of the end of martial law, unless parliament votes to delay.

Another idea is to issue war bonds that could later be converted into shares in state firms. That would help prepare these companies for privatization by spreading ownership more broadly.

The oligarch problem

Still, even that comes with challenges. Ukraine’s economy is still influenced by a small group of powerful oligarchs. The government has tried to reduce their power by limiting “vertical integration”—a polite way of saying monopolistic control—but progress is slow.

Above all, Ukraine needs a clear strategy. Without it, the strong wartime state could become a barrier to post-war recovery.

When even a “private” bank becomes a symbol of government control, it’s time to ask: where does wartime necessity end, and long-term dependency begin?

Whether the new government will chart a different course—or simply manage the status quo—remains an open question.

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