On December 18, 2016, the Cabinet of Ministers of Ukraine
adopted a decision to take over the share capital of PJSC “Privatbank”.
According to this decision, 100% of the bank’s shares will belong to the
Ukrainian state represented by the Ministry of Finance. This guarantees the
customers of PJSC “Privatbank” the safety of their savings, shall help avoid systemic
risks for the banking system of the country and warrant the financial stability
This decision makes it possible to protect more than 20
million citizens of Ukraine keeping their money at this bank and using its
services. First of all, it is about 3.2 million pensioners and 1.6 million of
other socially vulnerable citizens. All of them will have unrestricted access
to their accounts.
The bank is now operating as usual and
meeting all due obligations towards its customers and partners.
The Ukrainian state was forced to take over responsibility
for the further operation of the Privatbank and its
customers, in order to prevent the aggravation of its problems which,
unfortunately, have been accruing for years and have intensified recently. The
main cause of these difficulties is the unbalanced credit policy which incurred
capital losses for the bank.
For more than two years, the National Bank has been
negotiating with the bank’s shareholders to elaborate and implement a
capitalization plan. However, the implementation of the plan is still pending.
According to the findings of the National Bank of Ukraine, the Privatbank currently needs 148 billion hryvnas
to restore its capital.
Being aware of all problems challenging the PJSC “Privatbank” and taking into account its importance as a
system-building bank for the well-being of the financial sector and the entire
economy of Ukraine, the National Bank could not postpone its intervention any
longer and acknowledged the Privatbank as insolvent.
Following this, the National Bank approached the Government of Ukraine with the
proposal to transfer this bank with a critical importance for the whole banking
sector of the country to the state property.
Also, the shareholders of the Privatbank
sent a request to the Cabinet of Ministers of Ukraine asking the Ukrainian
state to take over the share capital of the bank. In this request, the
shareholders obliged themselves to restructure loans granted by the bank to
legal entities in line with the National Bank requirements till July 1, 2017.
The transfer of the PJSC “Privatbank”
into the state property will be carried out according to art. 41.1 of the Law of Ukraine “On the Warrant System for the Savings
of Private Persons”.
“Compliance with the legislation, regulations and
capitalization plans is crucial for the sustainable development of the bank and
the financial stability of the country. The shareholders of the Privatbank failed to implement the capitalization program,
which is why the National Bank of Ukraine, taking into account the importance
of the bank for the entire financial sector, initiated the state participation
in the bank’s capital”, Head of the National Bank of Ukraine Valeriya Gontareva said.
“Taking into account the systemic importance of this largest
bank in Ukraine, it was decided to transfer it into the state property. This
shall help us save its customers’ money and the financial system of the
country. The Government is providing funds to stabilize the bank – the
necessary allocations have been duly made for this in the state budget. The
state budget itself will not be out of balance after this operation, the budget
figures will remain in line with the agreements made under the IMF program”,
Minister of Finance Oleksandr Danyliuk
International financial organizations and the financial
market have been duly informed on all developments related to the Privatbank.
The situation is now under control, since the PJSC “Privatbank” is already managed by the state. It is
operating as usual. The previous bank management has agreed to support the
implementation of the anti-crisis program.