Moscow. 19 Dec. The government of Ukraine adopted a decision to move 100% of the shares in a Bank in the state. At PrivatBank, whose main shareholder Igor Kolomoisky until 2015 was the head of the administration of Dnipropetrovsk region account for a third of all deposits of physical persons of Ukraine.
“The Cabinet of Ministers of Ukraine at a meeting on Sunday discussed the issue of ensuring stability in the financial system of the country. Taking into account the results of the meeting of the Council of national security and defense of Ukraine, the government supported the proposal of the National Bank and the financial stability Board about the transition of PAO PrivatBank in wholly-owned state property,” – said in the message, posted Monday on the website of the Ukrainian Cabinet.
Reasons
President of Ukraine Petro Poroshenko said that the situation with PrivatBank threatened not only the Bank but the entire banking system of the country. “There was a direct threat both to the Bank and the entire banking system of Ukraine. It is obvious to us. And for this reason in the last 6 months, serious concerns are constantly expressed our key financial partners – IMF, world Bank, EBRD and others,” the President said in his address to the Ukrainian people.
The President added that the only way to save the Bank and thus to ensure the safety of funds of its clients is its transition to state ownership. “The alternative would have looked irresponsible because it would mean to close my eyes, hide your head in the sand and wait for the Bank will fall,” – said the head of state.
Privat transfer into state ownership will enable it to fulfil all its obligations to customers, says the first Deputy Chairman of the Board of the credit organization Oleg Gorokhovsky.
“The decision on voluntary and peaceful transfer of the Bank into possession of the state was taken in the moment when we realized that this information attack we can’t survive, and that under the threat there can be to our customers”, – he wrote in his Facebook.
The Chairman acknowledged that the Bank needed a capital increase and improvement of collateral for loans. According to him, the plan was painted by 2018, and implemented a stable, profitable operation of the Bank and impeccable payment discipline.
Prospects
Poroshenko assured that the state guarantees the clients of PrivatBank integrity and the integrity of their money.
“The basis of our solution – the rescue of the Bank and guaranteeing the rights of ownership of their financial resources to all who posted them in this institution”, – said the President of the country. In addition, he stated that the formation of the new leadership team PrivatBank attended the European Bank for reconstruction and development. “For the management of the Bank has already hired a new highly qualified team of specialists, the formation of which participated, including the European Bank for reconstruction and development,” the President said Monday in a video about the transition of the PrivatBank in the state.
On guarantees to investors and said Prime Minister Volodymyr Groysman: “the Money of Bank clients now coming under 100% guarantee of the state. The national Bank during this period will support the stability of the national currency and has all the necessary tools”.
And the Ministry of Finance decided to transfer in your PrivatBank salary project, to cheer the customers of the country’s largest financial institutions, said Finance Minister Oleksandr danylyuk. “As a symbol of stability, the Ministry of Finance decided to transfer their salary project in PrivatBank”, – said danyluk in a briefing Monday morning.
Comments
The leader of the faction “Batkivshchyna” , Yulia Tymoshenko said that the head of national Bank Valeria Gontareva heads the program, Stripping the banking system in Ukraine.
“That is a large-scale cleanup of the banking system of Ukraine is obvious. 85 banks have fallen, heads the program of destruction of Ukrainian banks Mrs.” she said at a meeting of the conciliatory Council of the Rada on Monday.
Thus according to her, over the head of the NBU and above the Deposit guarantee Fund is the head of state and without his knowledge the program is the elimination of the banking system can not be done. PrivatBank, which brought to bankruptcy is another step in this program,” she said.
The leader of Radical party Oleg Lyashko is also blamed for the situation around the “PrivatBank” on the Board of the National Bank of Ukraine and the head of the NBU Valeria Gontareva. “In a situation with “Private” is an important issue of responsibility of the National Bank. 146 billion (grn) – a hole in the “Private”. Where was the national Bank? Where was the Board of the National Bank as they made it, where they looked, because they have the ability to monitor the situation… I believe that in this situation the direct responsibility of the Board and head of the national Bank Gontareva”, – he told reporters.
In turn, the head of the faction “Association “Samopomich” in the Verkhovna Rada Oleg Berezyuk noted that PrivatBank is the largest financial institution in Ukraine, which is responsible for the electronic money turnover in Ukraine, and “is certainly the right decision to nationalize the Bank, because the country needs financial stability and security.” “Well, that deposits of Ukrainian citizens will be protected, but there is a second part of the coin: this is probably the biggest robbery of the Millennium the state budget of Ukraine. Who will pay for it all, who would pay 150 billion (UAH)? Of course, the people, through the budget of the country”, – said Berezyuk at the meeting of the conciliatory Council of leaders of factions, committees and groups of the Parliament on Monday.
At the same time President of the European Bank for reconstruction and development Suma Chakrabarti expressed support for the decision of the government of Ukraine. “The steps taken today by the government and the National Bank with the cooperation of the shareholders – is the most realistic way to secure the future of the Bank and, ultimately, to strengthen the entire banking system” – are his words in the EBRD on Monday.
Chakrabarti noted that the nationalization of banks in the system have allowed many developed countries to protect their economies during the global financial crisis – and it’s absolutely the right decision for Ukraine today.
“I would also like to emphasize that in the case of PrivatBank advisers of the government in the management of the Bank will make respectable Western company. The EBRD, of course, is also ready to offer cooperation in finding the optimal solutions for PrivatBank. We have offered the government to take advantage of our experience,” – said the head of EBRD. He also supported the NBU’s efforts to reform the financial sector and the adoption of appropriate management in this area.
High representative of the European Union for foreign Affairs Federica Mogherini also said that the nationalization of PrivatBank will contribute to the stability of the banking system of Ukraine.
“Let me use this opportunity to speak about the efforts of the Prime Minister, the President and the government in this watch to restore confidence in the financial sector, as we have seen, by the bold decision to nationalize Privat. This step should help to ensure that all banks in Ukraine meet the same regulatory standards and make the banking sector more stable,” she said at a joint with the first Vice Prime Minister of Ukraine – Minister of economic development and trade Stepan Kubiva press conference on Monday in Brussels.
Recapitalization
According to Finance Minister danyluk, Ukraine intends to fill the shortage of capital PrivatBank, the amount of the planned recapitalisation is estimated at between $ 116.8 billion ($4.4 billion) to 148 billion ($5.6 billion) of hryvnia. “The elimination of the capital deficit of the Bank will be held in several stages. In the first stage the Ministry of Finance will issue bonds in the amount of 43 billion UAH. (. . .) The maximum amount of capital increase will be 148 billion. The minimum amount of 116.8 billion UAH.” he said at a briefing on Monday.
According to him, the issuance of government bonds for Privat will be “the situation”: the exact sum of the resource requirements of the financial institutions will be known by the results of the audit.
“The government allocates money to the extent necessary in order to stabilize the Bank. To this end, the budget includes funds. That is, it is not something additional. The budget remains balanced, but its parameters are within the limits specified in our program with the IMF”, – said danyluk.
