Pursuant to Article 76 of the Law of Ukraine On Banks and Banking, on 7 April 2017, the NBU Board issued Decision No. 217-рш/БТ On Declaring Public Joint-Stock Company FINBANK Insolvent.
Based on findings of the diagnostic study of FINBANK PJSC (the Bank), which was carried out on 1 April 2016, the NBU Board approved the amount of additional capitalization needs in October 2016.
FINBANK PJSC submitted a restructuring plan to the NBU providing for a series of measures to raise the additional capital; nevertheless, as of 1 April 2017, these measures were not implemented. Therefore, FINBANK PJSC did not provide the NBU with a realistic capitalization program.
Moreover, FINBANK PJSC did not submit to the NBU an action plan for bringing the Bank’s activity in line with the requirements of the laws and the NBU regulations covering transactions with bank’s related parties.
FINBANK PJSC and its shareholders failed to take the planned actions, which led to deterioration of the Bank’s financial standing. Particularly, the borrowers did not repay their debts, which caused a need in additional provisioning under credit risks; as a result, the Bank incurred losses, and its regulatory capital decreased. The Bank's equity turned negative, amounting to UAH -320 million. In turn, this caused a violation of economic ratios. Failure to repay borrowers’ debts on loans led to FINBANK PJSC’s inability to perform its obligations to the depositors and creditors.
Taking into account uncertainty about possible areas and sources to increase the Bank’s capital, FINBANK PJSC’s shareholders took a decision on the Bank’s liquidation and submitted a relevant package of documents to the NBU. The NBU informed the Bank about impossibility to approve FINBANK PJSC’s liquidation according to the shareholders’ decision due to non-compliance of the elected chairperson and members of the liquidation commission with the requirements of the laws.
According to information provided by the Deposit Guarantee Fund (the DGF), 99% of all the FINBANK PJSC’s depositors will be reimbursed in full, as amounts held in their deposit accounts fall within the insured deposit amount of UAH 200 thousand, which is covered by the DGF. Customers with larger deposits (above the insured deposit amount) will be reimbursed up to the compensation limit guaranteed by the DGF. The total amount of insured deposits subject to compensation stands at UAH 2.9 million.
The Bank’s qualifying shareholder is Mr Oleksandr Hranovskyi, a Ukrainian businessman (holds a 79.66% stake).