NBU Would Nationalize PrivatBank Again if Necessary

The National Bank of Ukraine would re-nationalize PrivatBank if it loses the court case against it

uatv
16.05.2019

Photo from Ukrinform – UATV

The National Bank of Ukraine (NBU) is ready to nationalize PrivatBank a second time if a court rules to annul the decision to nationalize the bank 2016, First Deputy NBU Governor Kateryna Rozhkova said in an interview with Reuters.

Rozhkova said reversing the nationalization would reverse the mechanism by which the state handed the bank UAH 155 billion ($5.88 billion) to rescue it from insolvency.

“Then the bank will be left without capital. We, as a regulator of the financial sector, will make a decision in accordance with the law: Article 56 of the law tells us that we must declare such a bank insolvent,” she said.

This would mean either liquidating the bank or taking it back into state ownership, she said, adding that returning it to state hands would be preferable given its role in the economy.

PrivatBank is Ukraine’s biggest lender and has the most depositors, about 20 million by Rozhkova’s estimate, in a nation of 42 million.

Rozhkova also said that the PrivatBank issue would likely top the agenda when an International Monetary Fund mission visits Kyiv next week. Ukraine hopes to secure IMF aid worth $1.3 billion after the visit.

Rozhkova said overturning the nationalization would undermine the central bank’s independence and encourage owners of other banks declared insolvent to challenge the regulator.

“If today we destroy the independence of the National Bank as an institution, in the end it will have a negative impact on all investors, and international donors and international organizations will stop cooperating,” she said.

A Kyiv court ruled in favor of Kolomoisky in April 2019 by declaring that the nationalization process had been illegal. The central bank is appealing the decision in a higher court.

Source Reuters
date 16.05.2019
categories Economics
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