Bank branches near frontlines: are they worth the risk?

Oschadbank has unveiled an initiative to deliver financial services in frontline territories
Oschadbank has unveiled an initiative to deliver financial services in frontline territories

Having initially fled from the war, Ukrainians are gradually coming back. We need to ensure they have access to banking services even near the front line.

Oschadbank has recently unveiled new “mobile” branches: these are full-fledged banking facilities running out of vans. Soon they will go to remote settlements close to areas of active fighting to provide services to Ukrainian citizens.

They will complement Oschadbank's stationary facilities operating near the front line. In Kharkiv Oblast, we have five branches that started operating in areas liberated from Russian occupation, and in Mykolaiv Oblast, there is only one such branch in Snihurivka. Currently, we have eight branches in Kherson Oblast and 32 in Donetsk Oblast, although their operation was suspended for a certain period.

This is not to say that there are a lot of people living in these territories. Many women with children were forced to move to European countries. Some businesses relocated to safer regions of Ukraine.

A logical question arises: is there any reason to reopen branches in liberated territories or in areas near the front line? It may be dangerous, and most of the residents of these regions have left, which reduces the demand for banking services.

After the liberation of Ukrainian cities, people are gradually returning there. The question is: why are they doing this? The key undoubtedly lies in the improving security situation. However, another important factor is that people have places to get assistance, and businesses have ways to generate revenue and even get loans.

To support this thesis, I will describe the demand for Oschadbank’s services from businesses and people in frontline regions of Ukraine.


In 2023, Oschad issued about UAH 120 million ($3.2 million) in loans to enterprises in Donetsk Oblast: almost twice as much as in 2022. The state program Affordable Loans 5-7-9% remains in demand. The main sector for lending is agriculture.

In 2023, legal entities opened 345 current accounts at Oschadbank, including 43 for receiving non-refundable grants funded by the German government. With the help of international partners, Oschad's clients opened grocery stores, service stations, and a dental clinic.

These figures are the result of the heroic work of Oschadbank's employees in the region. For example, the Pokrovsk branch was one of the first to resume operations at the end of April 2022. It now employs 24 people. Yes, it was difficult to get it operational at first—the team was assembled in stages. After we resumed CIT (cash-in-transit) services, the number of customers increased significantly. The loan portfolio has also grown; it is larger than before the invasion.

Another branch is in Toretsk. Four people work there now. The site is located near the front line, just 5 kilometers from occupied Horlivka. When the branch reopened in July 2022, clients came from neighboring towns. People were grateful to be able to withdraw funds, make transfers, open accounts for payments, etc. Now the rush and panic are gone, because the stable operation of the branch, according to our colleagues, acts as a reassurance for the townspeople.

Our branches resumed operations almost as soon as the cities were liberated. Lyman was de-occupied on October 1, 2022, and a month later, Oschad resumed operations in the only surviving branch. Our employees returned there from abroad as soon as they learned about Lyman’s liberation. The number of residents is growing, and about 60 people visit our branch every day, accessing a variety of services.


In 2023, individuals opened 150,000 accounts with Oschadbank in Kharkiv Oblast. More than a third of them were opened in liberated areas. Residents are actively applying for subsidized mortgages: 54 loans for UAH 71 million ($1.9 million) were issued under the YeOselya program.

Legal entities and individual entrepreneurs opened 2,375 accounts, including 91 in de-occupied territory.

An interesting fact is that local businesses that were once unable to service their debts are gradually resuming their loan payments. In 2023, the “risky” debts of Oschad customers in the region decreased by UAH 68.3 million.

New business loan disbursements last year amounted to UAH 330 million ($8.8 million). Compared to 2022, businesses began to apply for grant support more often: 184 grants were received, including two in liberated settlements. The most popular funding programs are those aimed at micro-businesses, veteran businesses, and the Berlin-funded grant program.


The situation with grants in Mykolaiv Oblast is similar. Over the past two years, entrepreneurs have opened almost the same number of current accounts annually. However, the number of requests for grant funding in 2023 increased 10-fold; UAH 13 million was credited, including almost UAH 1.5 million in de-occupied territories. As for lending, Oschadbank has issued more than UAH 300 million in loans to local businesses.

Residents of Mykolaiv Oblast are not giving up on purchasing housing under subsidized mortgages: Oschadbank has provided 29 such loans totaling UAH 25.5 million.

Two weeks after the liberation of Snihurivka, Oschadbank was the first bank to resume operations there. Today, the branch employs four employees who serve more than 4,000 clients: pensioners, payroll clients, and legal entities.

Kherson Oblast

This region is the hardest to work with at the moment, as the enemy has been constantly shelling Kherson City for many months. We do not provide loans to businesses there, but there is a significant demand for services for individuals. Before the full-scale war, there were 34 branches in the oblast, now there are eight: six in Kherson City and two in the wider region. Most of them were opened by Oschadbank in 2023.


As the figures clearly show, our customers in the frontline regions depend on Oschadbank's services. There is no doubt that we need to ensure access to banking services even near the front line, as much as possible.

However, I believe that it is extremely unwise to turn the state postal service Ukrposhta into another state-owned bank. It would be a waste for the government to invest significant funds in re-equipping the postal network in accordance with the NBU's requirements for banking institutions. In addition, it contradicts the overall strategy of reducing the share of state-owned banks in the market, which is Ukraine's commitment to the IMF. It is much cheaper to encourage the return of existing state and private banks there, including through the creation of mobile branches. It is quite possible to develop a network there, as we have clearly shown.

Another observation. It is interesting that customers are now more patient and complain less about any service shortcomings. Most clients have recently changed their opinion of Oschadbank for the better. And this is to the credit of my colleagues who did not abandon their clients despite the difficult security situation.

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Read the original article on The New Voice of Ukraine