Entrance of Raiffeisen Bank in Ukraine's retail banking sector is very good news

e Austrian banking giant is currently in negotiations to buy Ukraine’s Aval bank, the nation’s second largest. The move would put Raiffeisen at the top of Ukraine’s banking industry, and is especially interesting because Raiffeisen has indicated that it wants to branch into retail banking here. That would be a positive development for people who live in Ukraine, given the relative lack of development in this country’s retail banking center.

Raiffeisen’s arrival here, pending due diligence, should serve also as a bellwether for other foreign investors thinking about entering Ukraine.

Raiffeisen will suddenly have enormous resources at its disposal, including the largest nationwide bank network. This will force Ukrainian banks to improve their services. Competition is exactly what’s needed in a too-small Ukrainian banking industry that’s been coddled by the government, and protected from foreign competition, for too long. Let the native Ukrainian banks scramble to win customers, and let a hundred flowers bloom.