National Bank of Ukraine ready to nationalize PrivatBank again

Source : 112 Ukraine

The regulator intends to resort to a repeat procedure if the court decides to cancel the 2016 decision on nationalization
12:17, 16 May 2019

First Deputy of National Bank Kateryna Rozhkova

The National Bank of Ukraine is ready to nationalize PrivatBank a second time. This was stated by First Deputy of National Bank Kateryna Rozhkova in an interview with Reuters.

Rozhkova’s determination to keep PrivatBank in state hands for now may reassure foreign creditors and investors, who worry that legal wrangling over PrivatBank threatens Ukraine’s financial stability.

The authorities have been locked in a protracted battle with the former main owner of PrivatBank, Ihor Kolomoisky, one of Ukraine’s richest men, who says his bank was nationalized without justification. He has challenged the decision in court.

Rozhkova said overturning the nationalization would derail Ukraine’s $3.9 billion program with the International Monetary Fund and rock investor confidence.

Ratings agency Moody’s said last month that overturning the decision would hit Ukraine’s credit rating.

It would also pose a challenge for incoming President Volodymyr Zelensky, who has longstanding business ties with Kolomoisky but who has dismissed suggestions that he would return PrivatBank to Kolomoisky or offer him state compensation.

Related: PrivatBank gets record revenue in 2018

Rozhkova said reversing the nationalization would reverse the mechanism by which the state handed the bank around 5.88 billion dollars 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.

As it was reported earlier, the court merged five Kolomoysky’s lawsuits against Ukraine's National Bank, PrivatBank.

The Prosecutor General Office launched an investigation on alleged pressure put by President Poroshenko on judges of PrivatBank case.

On April 18, Kyiv-based court ruled that the nationalization of Privatbank in late 2017 was 'conducted with multiple law breaches.' The court, thus, granted the motion by Ihor Kolomoysky, the oligarch who appealed against the nationalization of the bank he had owned.

District Administrative Court of Kyiv granted the claim of Ukrainian oligarch Ihor Kolomoysky against the National Bank of Ukraine and Ukraine’s Government on nationalization of PrivatBank.

Related: PrivatBank to sell stocks of its Latvian subsidiary

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