The inspection conducted by the National Bank of Ukraine in STAROKIEVSKIY BANK PJSC (hereinafter – the Bank) has found evidence that the Bank violated the banking legislation and submitted inaccurate financial statements that did not reflect its actual financial standing. In particular, the inspection has revealed poor-quality assets and the need to make additional provisions under these assets, as well as insufficient capital buffers to cover risks arising from the Bank's activities.
In view of the above, in May 2014, the Bank was placed into the category of troubled banks and a timeframe was set for the Bank to bring its operations into compliance with the law and take measures to make additional provisions and build up capital buffers.
However, the Bank owners failed to take measures to provide financial support, primarily, through additional capitalization to the Bank. On the contrary, attempts were made to withdraw funds from the Bank. The Bank also failed to devise a plausible Action Plan to bring its operations into compliance with the law. The Plans submitted by the Bank contained no concrete measures and ignored the requirements and guidelines provided by the regulator. In addition, fresh infringements have been revealed. This resulted in the submission of inaccurate financial statements.
Given the above, in June 2014, the National Bank of Ukraine Board adopted a decision to declare STAROKIEVSKIY BANK PJSC insolvent. Following this decision by the NBU Board, the Deposit Guarantee Fund (hereinafter – the Fund) appointed the provisional administration to the Bank.
During June–August 2014, the Fund was engaged in a search for potential investors to remove the Bank from the market by alienating all assets and liabilities of the Bank or a portion of its assets and liabilities in favor of the acquiring bank, or by establishing a bridge bank and selling it to an investor to whom the Bank's assets and liabilities will be transferred, or selling the entire Bank.
However, the sole potential investor who showed willingness to acquire a bridge bank established on the basis of the Bank has withdrawn from the deal.
In the light of the above, the National Bank of Ukraine Board backed the proposal by the Fund and passed Resolution No. 563, dated September 11, 2014, to revoke the banking license and initiate the winding-up procedure of STAROKIEVSKIY BANK PJSC on September 18, 2014.