In the 15th to 17th centuries, lending to private individuals and city authorities (magistrates) was traditionally carried out by owners of large financial capital who possessed the greatest fortunes in Lviv.
In the first half of the 17th century, charitable lending institutions, similar to European religious banks (known by their Latin name Montes pietatis, or Mountains of Piety), began to appear in Lviv, initially specializing in mortgage and short-term loans.
[1][4] The charter of St. Gregory's Church Brotherhood, approved by Archbishop Mikołaj Torosowicz, detailed to whom, for how long, and at what interest rates money could be lent, what could be accepted as collateral, and how to deal with debtors.
[Notes 1] Initially, these banks provided interest-free loans secured by real estate, but over time they began to charge customers a low interest rate.
Notable clients included Lviv standard-bearer Józef Frantiszek Dzieduszycki, priest Yuri Godzemba Laskaris, influential princely families Lubomirski and Sapegi, and Armenian Archbishop Jakub Stefan Augustynowicz.
[Notes 3] Diet of Galicia and Lodomeria guaranteed the clients of the Austrian and Galician savings banks the timely payment of interest and the return of their deposits on demand.
Its competitor was the Galicia General Protection Partnership, which insured citizens and their property (located at Skarbkowska St., 2 which is now Lesia Ukrainka St.)[28]In 1878, the Austro-Hungarian Credit Institution for Trade and Industry was opened in the city.
Among the initiators of the Peasant Bank were the brothers Zygmund and Nikolai Romashkany, the president of the Lviv-Chernivtsi Railroad, Prince Karol Yablonovsky, Metropolitan Spyrydon Lytvynovych, and Julian Lavrovsky, an advisor to the Supreme Regional Court.
Every twentieth peasant in Galicia was a debtor of the bank, and every twelfth farm that borrowed money was sold for debt, which ultimately caused the prices of pledged agricultural land to collapse.
[32] In 1886, the General Agricultural and Credit Institution of Galicia and Bukovina, better known as the Kryloshansky Bank, went bankrupt due to numerous unsecured loans, insolvency of debtors, unprofessional management, and speculative activities of employees.
This building was constructed on the site of the former palace of Orthodox metropolitans, which Lviv Bishop Yosyf Shumlyansky bought from a Greek merchant at the beginning of the 18th century (today it houses a polyclinic).
There was a notable decrease in foreign investment in the region, the scale of many construction projects, which employed almost half of the workforce, was reduced, and the demand for oil dropped significantly.
Additionally, Stanislav Szczepanowski's companies went bankrupt, bringing the Galician Joint Stock Mortgage Bank, closely linked to his industrial group, to the brink of collapse.
Appointed director in 1890, Mordirosevich abused the trust of Archbishop Isaac Isakovich and the Chapter by spending large sums from the bank's treasury on women, gambling, and various ventures.
[55] A characteristic feature of multi-ethnic Austria-Hungary was the existence of independent Austrian, Hungarian, Czech, Polish, Jewish, Ukrainian, and other business communities, including banking institutions.
The main reason for the formation of these national business networks was the numerous barriers that prevented representatives of other ethnic groups from obtaining credit or insurance on favorable terms, as well as the significant role of personal connections in the financial environment of the empire.
For example, the governor of Galicia, Count Alfred Potocki, opposed the creation of Ukrainian financial organizations and repeatedly refused to allow the establishment of savings banks.
Representatives of the Greek Catholic Church also actively participated in the consolidation of the middle class, recommending parishioners to invest their savings only in Ukrainian banks and other financial institutions.
In December 1903, by the decision of the board of directors, it was renamed the Krai Revision Union, which was engaged in audit and control, as well as publishing a specialized magazine, Economis.
[65] Since the beginning of the 20th century until the First World War, oil production in Galicia acquired mass character, and the industry was dominated by large joint-stock companies with foreign capital.
Initially designed for small peasant farms, in practice, large borrowers prevailed among the bank's clients (the share of loans over 20,000 crowns amounted to 76% of the total portfolio).
Initially, the Viennese City Bank's banknotes (bancocettels [de]) bonds appeared in Lviv, but gradually their credibility began to decline, ultimately destabilizing the empire's financial system.
Among the issuers of securities within the Ukrainian business community, the most notable were the Galician Zemstvo Mortgage Bank and the societies Prosvita and Zarya (the latter issued interest-free "debt certificates").
The general population held a significant number of securities, including bonds and bills of various types, as well as lottery tickets and insurance policies, which were common among middle-income families.
The legalization of securities trading was driven by the fact that nearly all operations with Galician indemnity bonds and mortgage papers had been monopolized by the "black stock exchange," located on the Hetman's Walls.
Dealers of the “black exchange,” operating around the Archangel Michael monument and in nearby coffee houses (Imperial, Carlton, Grand, Vienna Café), often obtained news before it reached official authorities or bank managers.
[28] After World War I (1918) and the defeat of the West Ukrainian People's Republic by Poland, Galician oil lost its former significance, leading to a partial outflow of financial capital from Lviv.
Among the smaller financial institutions, the Povetnoe Kreditnoe Tovarishchestvo (Sikstuska, 38), the Mieszczanski Kreditowy Sojuz (Russkaya, 3), and the Narodna Torgovlya cooperative (Rynok Square, 38) were active.
[94] In 2005, architect Oleksandr Baziuk designed a modern office center for Ukrsotsbank, which changed the appearance of Mitskevicha Square (at that time the bank was owned by influential businessman Viktor Pinchuk, son-in-law of Ukrainian President Leonid Kuchma).
Its main shareholder is considered to be local businessman Oleg Balyash, who also owns the vodka brands Getman and Derzhava, electronics store chains Shok and Krez, and several office centers.