For the first time, the National Bank starts publishing detailed information on its decisions to approve or prohibit the acquisition of a qualifying holding in banks. Information contains the name of a bank in respect of which the documents required for the acquisition of a qualifying holding have been submitted, the name of an applicant seeking to acquire a qualifying holding, information about the size of a qualifying holding in a bank that the applicant seeks to acquire, an abstract of the decision and its reference details. Going forward, this report will be published on a semi-annual basis (the next report has been scheduled to be released in January 2016).
Since the start of the year, the National Bank of Ukraine has approved the acquisition of a qualifying holding in 12 banks and prohibited 25 applicants from acquiring of a qualifying holding in 15 banks.
In particular, permits have been issued:
- to allow a change of control in BANK TRUST PJSC – to Volodydmyr Avramenko intending to acquire 100% of the bank's shares from the three Russian Federation nationals: Illya Yurov, Mykola Fetisov and Sergiy Belyaev.
- to increase a qualifying holding in: BTA BANK JSC − to Kazkommertsbank JSC and PROCREDIT BANK PJSC – to the European Bank holding company ProCredit Holding AG&Co KGaA.
As part of the efforts to clamp down on “artificial dissipation” of the property at banks, which is linked with non-compliance with the requirements set out in the law on qualifying shareholders in banks, the regulator has identified the ultimate beneficiaries of banks and allowed them to legalize their status in four banks:
- Vadym Novynskyi −in UNEX BANK PJSC;
- Volodymyr Klymenko − in UKRINBANK PJSC;
- Viktor Polishchuk − in BANK MIKHAYLIVSKIY PJSC;
- Maksym Shpak – in RADICAL BANK PJSC.
The National Bank has also allowed the Deposit Guarantee Fund to sell one insolvent and one bridge bank, in particular: UKRAINIAN BANK OF DEVELOPMENT PJSC, which used to be owned by Oleksandr Yanukovych, to Viktor Polishchuk, the owner of BANK MIKHAYLIVSKIY PJSC, and a bridge bank established on the basis of OMEGA BANK PJSC to Oleksandr Stetsyuk, the owner of Ukrainian Business Group LLC.
Viktor Polishchuk has been granted a permit by the National Bank of Ukraine to acquire a qualifying holding in UKRAINIAN BANK OF DEVELOPMENT PJSC, providing that two out of the five seats on the Supervisory Board will be allocated to the persons that meet the eligibility requirements in terms of their independence and who will be selected through a competitive selection process to be arranged by a recruitment agency with an internationally recognized reputation. As of the date of the publication of this press release, the competitive selection procedure has not been held yet as the execution of an agreement on purchase/sale of the bank’s shares has been blocked by the decision of the law enforcement agencies.
Following the verification of the financial standing of the ultimate beneficial owner of Ukrainian Business Group LLC Oleksandr Stetsyuk, the National Bank of Ukraine has issued a permit to Oleksandr Stetsyuk to acquire a bridge bank established on the basis of OMEGA BANK PJSC. The financial standing of Oleksandr Stetsyuk was estmated at UAH 150 million, as compared with the minimum amount of the authorized capital of a bridge bank (UAH 120 million) and the minimum purchase price (UAH 30 million) set by the Deposit Guarantee Fund in respect of this bank.
35 out of 37 decisions made by the National Bank of Ukraine to ban the applicants from acquiring a qualifying holding were pertaining to insolvent banks. “Currently, in most cases, the National Bank did reject the applications seeking approval for the acquisition of a qualifying holding in a bank. The reasons for the rejection were as follows: the applicants either fail to disclose information on ultimate beneficiaries, or are unable to confirm their financial standing. The National Bank sees no rationale for allowing the entities that are unable to confirm their financial standing to acquire insolvent banks. Furthermore, there is no point in selling an insolvent bank to the companies that are not disclosing information on ultimate beneficiaries,” said Director of the NBU Registration and Licensing Department Leonid Antonenko.
The National Bank of Ukraine has returned the documents back to 40 applicants upon their request. The applicants are seeking ways to confirm their financial standing or simplify the future ownership structure of banks.
“The NBU policy is geared toward encouraging investments that meet the Basel Core Principles for Effective Banking Supervision into the Ukrainian banking sector. In accordance with these principles, the licensing authority has the power to set the eligibility criteria for bank’s qualifying shareholders, including ultimate beneficiaries, assess the transparency of investors’ ownership structure, the origin of their funding sources (capital), and the ability of shareholders to provide financial support to the bank is required,” explained Leonid Antonenko.
For reference
Please follow the link to view the Core Principles for Effective Banking Supervision (The Basel Core Principles) (available in English).