On November 27, 2014, the National Bank of Ukraine Board adopted a decision declaring Public Joint-Stock Company "LEGBANK",   Public Joint-Stock Company "BG BANK" and Public Joint-Stock Company "UKRAINIAN BANK FOR DEVELOPMENT" insolvent.

With regard to the LEGBANK PJSC and BG BANK PJSC

Given the deterioration in the financial standing of LEGBANK PJSC and BG BANK PJSC (hereinafter – the Banks) and the fact that the National Bank of Ukraine has started receiving complaints about the Banks' failure to meet their obligations to clients, and in order to protect the interests of creditors and depositors, the National Bank of Ukraine has placed the Banks under special supervision through the appointment of NBU overseers.

During this period, in an effort to put the Banks' performance back on track and eliminate violations and the causes that had led to the deterioration in their financial standing, the National Bank of Ukraine held talks with the shareholders and managers of the Banks to address the problems, imposed corresponding requirements, and provided recommendations on efficient measures to improve their financial health.

The Banks have repeatedly submitted the financial rehabilitation plans to the National Bank of Ukraine. However, these plans did not include efficient measures to improve their financial health and failed to eliminate violations of NBU regulations. In addition, even these inefficient financial rehabilitation plans submitted by the Banks never materialized.

Given the lack of sufficient and timely measures to address liquidity shortage experienced by the Banks and the Banks' inability to meet their obligations to depositors and creditors on time, the above said plans with substantiated comments issued by the National Bank of Ukraine have been returned to the Banks so that the Banks would alter these plans.

The banks' main performance deficiencies are as follows:

LEGBANK PJSC: insufficient regulatory capital – UAH 63.4 million (regulatory capital requirement –  no less than UAH 120 million). The Bank has failed to meet its obligations to clients on time. Numerous violations of prudential regulations and limits have been revealed. The Bank's owners have failed to take urgent measures to keep the Bank afloat, in particular, by injecting additional capital and raising additional resources. The Bank's management team has failed to secure the repayment of loans by borrowers.

BG BANK PJSC: the Bank's failure to meet its obligations to clients, numerous violations of prudential regulations and limits. In addition, on November 3, 2014, the Bank's senior management team and its structural subdivisions underwent a reshuffle. Furthermore, the Supervisory Board members have resigned. Following a senior management team reshuffle, the National Bank of Ukraine detected an asset-side transaction conducted by the Bank's new management team against the requirements of the National Bank of Ukraine in the absence of basic documents and grounds for carrying it out, which resulted in the Bank incurring heavy losses. The Bank has delayed in providing supporting documents related to this transaction and explaining the grounds for conducting it upon the request of the National Bank of Ukraine.

Therefore, the shareholders and managers of the Banks have failed to take urgent measures to help the Banks avoid going insolvent, despite the fact that this is prescribed by Article 58 of the Law of Ukraine “On Banks and Banking”.

In light of further deterioration in the Banks' financial position and in order to protect the interests of the their creditors and depositors, pursuant to Article 76 of the Law of Ukraine “On Banks and Banking”, the Board of the National Bank of Ukraine has adopted a decision declaring the Banks insolvent (Resolution No. 744, dated November 27, 2014 and Resolution No. 745, dated November 27, 2014 respectively).

With regard to PJSC "UKRAINIAN BANK FOR DEVELOPMENT"

In connection with the fact that that Oleksandr V. Yanukovych, the sole shareholder of PJSC "UKRAINIAN BANK FOR DEVELOPMENT", is targeted by the EU sanctions, with his assets frozen, , in September 2014, the National Bank of Ukraine adopted a decision to put the bank into the category of problematic in order to protect the interests of depositors and other creditors of this bank.

In compliance with the requirements of the banking laws, the National Bank of Ukraine has set a deadline for PJSC "UKRAINIAN BANK FOR DEVELOPMENT" to take measures to bring its operations into compliance with applicable laws.

PJSC "UKRAINIAN BANK FOR DEVELOPMENT" has submitted several Actions Plans aimed at improving bank's performance indicators. However, the above said plans did not include measures to bring the bank's operations into compliance with applicable laws.

In light of the above, and given the non-compliance of PJSC "UKRAINIAN BANK FOR DEVELOPMENT"'s operations with applicable banking laws, the Board of the National Bank of Ukraine has adopted a decision declaring PJSC "UKRAINIAN BANK FOR DEVELOPMENT" insolvent (Resolution No. 743, dated November 27, 2014).