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Finance Ministry suggests sale of Ukrgazbank and Privatbank in 2020 and 2022 respectively

Source : 112 Ukraine

The Finance Ministry considers establishment of new state-owned banks undesirable.
14:54, 21 February 2018

112 Agency

The Ministry of Finance of Ukraine under the program for gradual reduction of government role in the nation’s banking sector from 55% of total asset volume (as of late 2017) to 24% in the medium run, suggests a complete sale of Ukrgazbank and Privatbank (both based in Kyiv).

Related: Ukrainian government approves law project on corporate governance of state banks

“In particular, Ukrgazbank and Privatbank should be sold entirely in 2020 and 2022 respectively”, - the Minister of Finance Oleksandr Danyliyuk said while presenting the Principles of strategic reform of the country’s banking sector at a Cabinet meeting on Wednesday, Interfax-Ukraine reports.

“By the end of 2019 we expect to set conditions for the attraction of minority shareholders – international financial organizations such as the International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD) to Oshadbank and Ukreximbank”, - the minister added.

Related: Privatbank should be sold within the next five years - Finance Minister

Danyliuk also emphasized the fact that the state will avoid implementing measures that could increase its role in the banking sector.

“Establishment of new state-owned banks is considered undesirable”, - the head of the institution said.

Related: The real price for nationalization of PrivatBank

On the other hand, the First Deputy Prime Minister Stepan Kubiv supports an increased government role in the banking system of Ukraine. He argues that state banks should be the government tool in its mission to reduce budget deficit and curb inflation. Particularly, those should act as a moderator of market expectations regarding the economic growth, as well as a catalyst for economic growth.

Related: Ukraine can go up in Doing Business-2017 by 15 positions - Stepan Kubiv

“Nowadays we cannot consider just monetary or budget policy. On the basis of these banks, we need to form a non-conventional monetary and budget policy”, - Kubiv argued.

“In general, the destinations for loan and monetary stimulation from state banks should be transparent, competent, and directed towards developing trust in the banking system and the nation’s economy”, - the First Deputy Prime Minister added.

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