The National Bank of Ukraine has declared BANK CAMBIO PJSC (hereinafter – the Bank) insolvent. As far back as spring 2014, that inspection revealed that the Bank ran significant operating risks, in particular, credit and liquidity risks. The assets were of poor quality, and the provisions against assets appeared to be insufficient. This led to an inaccurate picture of the Bank's actual financial results and capital. The shortage of liquidity was linked to poor quality assets and the absence of liquidity support from the Bank’s shareholders.
The failure to meet obligations to depositors and creditors and multiple breaches of the regulations prescribed by the regulator laid the grounds for putting the Bank into the category of problematic banks and appointing an NBU overseer to the Bank.
The situation demanded that the Bank take urgent measures to improve liquidity conditions through efforts by shareholders and asset management efforts and channel the funds unlocked to meet its obligations.
At the same time, the financial rehabilitation plan which banks that have been put into the category of problematic banks are required to submit as prescribed by applicable laws did not include timely measures to improve liquidity conditions.
On October 20, 2014, the Bank underwent a shareholder reshuffle and a management shake-up (Chairman of the Supervisory Board and Chairman of the Management Board were replaced). However, new shareholders failed to take urgent measures to restore the solvency of the Bank. In particular, at the last shareholders' meeting, the shareholders failed to adopt a decision to increase the authorized capital by UAH 300 million, as envisaged by the meeting agenda.
Given the above, in order to protect the interests of depositors and other creditors of the Bank, in compliance with articles 7, 15, 55 of the Law of Ukraine "On the National Bank of Ukraine", articles 67, 73, 75, 76 of the Law of Ukraine "On Banks and Banking", on December 4, 2014, the Board of the National Bank of Ukraine adopted a decision to put BANK CAMBIO PJSC in the category of insolvent banks.
First Deputy Governor of the National Bank of Ukraine Oleksandr Pysaruk emphasized that the domestic banking system must become healthy and reliable. "The banks’ ability to meet their obligations should not give rise to doubts among depositors and creditors. If there is lack of confidence in the bank, but its shareholders and management are unwilling to get the situation back on track and put the bank back on a sound footing, the regulator has to step in. We remove each unhealthy bank from the market and exert efforts to restore its financial health through efforts by the provisional administration. For sure, consistent efforts by the NBU and the DGF to rehabilitate the banking system would contribute to enhancing the country's financial stability,” he explained.
He also reminded that the Deposit Guarantee Fund would pay compensation to depositors in the shortest terms.