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Privatbank: path to nationalization
The negotiations on the nationalization of PrivatBank began in 2015. At that time the now fugitive MP Oleksandr Onishchenko has introduced to the parliament a bill on nationalizing the financial institution. The legislative initiative has not received the support of deputies. Instead, the bank, if necessary, received the stable refinancing from the National Bank, in the amounts of billions of hryvnia.
Moreover, the central bank was willing to meet the wishes of the bank's shareholders and provide installments for repayment of the refinancing debts, and did not deny the new refinancing. And this despite the fact that it was already known about the significant proportion of insider loans (loans related to the shareholder structure of the bank, - Ed.). According to official data, the proportion of insider loans in the portfolio of financial institution was up to 20%. Informally employees cite a figure near 80%.
Meanwhile, the fate of PrivatBank at about the same time was a case of interest of the IMF, which insisted on the support of systemic banks, and in the updated Memorandum of understanding between the EU and Ukraine it provided the nationalization of Privatbank, if the first quarter of 2017 its owners do not invest in the bank billions of hryvnia. The press service of the bank declared on the implementation of the recapitalization plan, and regularly sent to the IMF reports that the recapitalization of financial institution succeeds.
A new round of talks on the nationalization took place in the summer of this year. According to sources close to the President of Ukraine Petro Poroshenko, the transfer of the largest bank to the state was discussed during the meeting of the head of state with businessman Igor Kolomoisky on the island of Capri. According to sources in the Cabinet of Ministers, during the negotiations it was assumed that the state will receive a controlling stake in the country's largest bank.
"It was planned that the government will have from 51 to 68% of the bank's shares. Instead they pledged Kolomoisky to partially forgive debts on loans to their companies," noted our interlocutors, stressing that the NBU did not hinder the withdrawal of assets.
As of the middle of last week, the proposal was supported by Igor Kolomoisky, but his partner Gennady Bogolyubov spoke strongly against it.
"Bogolyubov said that Kolomoisky mainly took loans, so he should not respond to the same extent," - noted sources close to the ex-head of the Dnipropetrovsk Regional State Administration.
However, as we know, on Sunday evening on the basis of the National Security Council and the Cabinet meeting it was decided to nationalize the financial institution. According to sources in "Bloc of Petro Poroshenko," the decisive factor in the nationalization was the position of the International Monetary Fund.
"The IMF put the question squarely on implementing of additional capitalization plan to PrivatBank in the first quarter of 2017. This involved, inter alia, substantial payments on insider loans debts, "- say our interlocutors, adding that the owners, on the other hand, asked for granting of deferment. A similar wish of additional capitalization informally made the EBRD.
Indirectly, this was confirmed by today's announcement of Minister of Finance Olexandr Danyliuk, who noted that the nationalization of PrivatBank is getting official Kyiv closer to next tranche of the IMF loan.
On Monday morning, the price of nationalization was announced. According to Finance Minister Olexandr Danyliuk, the government plans to pour into the bank's capital to 150 billion UAH. At the same official said that the agreement involves the participation of shareholders in the decision of the bank's debt problems.
PrivatBank is state-owned. What's next?
Thus, the country's largest bank came under government control. The Ministry of Finance has announced the updating of bank’s management, noting that the composition of the Supervisory Board will include representatives of international organizations. At the same time, the Minister of Finance Olexandr Danyliuk at the briefing said that after the financial stabilization bank will be sold.
According to sources in the presidential administration, during negotiations one of the options was the return of the bank to Kolomoisky (repurchasing). "Kolomoisky got rid of the toxic assets. The bank could be returned to him after additional capitalization at our expense," noted our interlocutors.