A value of state participating banks for development of the banking system of Ukraine is implicit, as in the process of the activity they decide the row of tasks that have a national value, in particular, support of stability of the banking system; financing of socially useful, however financially unprofitable projects; stimulation of financial development is in regions, where it is difficult to get to the commercial banks. The special maintenance the role of state participating banks acquires in the conditions of swift increase of stake of foreign capital in the banking system of country. The aim of the advanced study are an exposure of features of functioning of public bank institutions and formalization of their activity on a prospect. Basic advantages and lacks of presence of public domain are in-process systematized in the bank sector of economy. Rating of bank institutions is built and market position of state participating banks is certain in the banking system on assets, attracted money and to the capital. The analysed basic performance of state participating banks indicators are in Ukraine, the analysis of profitability of public bank institutions is conducted in particular. With the aim of estimation of level of concentration and, accordingly, monopolization of bank market the actual values of index of concentration of Herfindahl–Hirschmanа are expected for state participating banks. The conducted calculations gave an opportunity to define the basic problems related to the increase of level of concentration at the market of bank services, and ground basic directions of their overcoming. The instrumental providing of politics of the state is investigational in relation to efficiency of functioning of state participating banks in Ukraine. The offered is needed innovative bank services for the successful providing of stable activity of public bank institutions

Keywords: banking system, state participating bank, competitiveness, index of concentration, market of bank services, bank innovations

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