Having considered the proposal of the Deposit Guarantee Fund, on February 26, 2015, the National Bank of Ukraine adopted a decision to revoke banking licenses and wind up the two insolvent banks – BG BANK PJSC and LEGBANK PJSC.
As far back as in summer 2014, in order to protect the interests of creditors and depositors of BG BANK PJSC and LEGBANK PJSC, the National Bank of Ukraine put these banks under special supervision by appointing NBU overseers to these financial institutions in connection with the deterioration of the banks' financials and the lodgment of complaints by the banks' clients with the National Bank of Ukraine about the banks' failure to meet their obligations to their clients.
With a view to putting BG BANK PJSC and LEGBANK PJSC back on track and eliminating violations and the causes that had led to the deterioration in their financial standing, the regulator held talks with the shareholders and managers of BG BANK PJSC and LEGBANK PJSC to address the problems facing these banks and pull them out of crisis, imposed corresponding requirements, and provided recommendations on efficient measures to improve their financial health.
However, both banks have repeatedly submitted the resolution plans to the National Bank of Ukraine that fell short of efficient measures to improve their financial standing, and failed to eliminate all the breaches of the NBU regulations.
In addition, the shareholders and management of BG BANK PJSC and LEGBANK PJSC have failed to take timely measures to keep the banks afloat and avert their insolvency, in particular, measures to address liquidity deficit and ensure timely settlement of their obligations to depositors and creditors.
In view of the above, and given further deterioration of BG BANK PJSC and LEGBANK PJSC's financials, the Board of the National Bank of Ukraine adopted a decision to declare these banks insolvent (Resolutions No 744 and No 745 dated November 27, 2014 respectively)
In compliance with Article 34 of Section VII of the Law of Ukraine On Household Deposit Guarantee Scheme, the Managing Board of the Deposit Guarantee Fund appointed the provisional administrations to both banks, effective from November 28, 2014 until February 27, 2015.