On 20 May 2016, the Board of the National Bank of Ukraine issued Decision No. 8 declaring Fidobank Public Joint-Stock Company insolvent in accordance with Article 76 of the Law of Ukraine On Banks and Banking.
On 12 May 2016, Fidobank experienced a run on deposits, with both corporate and household deposits starting to flow out of the bank. No transactions involving the transfer of assets to related parties were carried out.
On 12-13 May, the Bank saw deposit outflows of about UAH 200 million. Following this development, on 16 May 2016, the Bank experienced difficulty in meeting its obligations to customers. As of 20 May 2016, Fidobank PJSC’s total amount of outstanding obligations to customers exceeded UAH 500 million (9% of the Bank’s obligations).
It should be noted that Fidobank PJSC has not applied to the NBU for refinancing. On 17 May 2016, the Bank notified the NBU of a potential investor's refusal to participate in the bank's recapitalization.
As a side note, in 2015, the NBU conducted diagnostic studies of Fidobank PJSC. Following the diagnostic studies of the bank, the required amount of additional capital that needed to be injected into Fidobank PJSC was approved in January 2016.
During the first four months following the approval of the recapitalization plan, Fidobank PJSC took measures that resulted in more than a twofold reduction in the amount of the required capital. The measures included, among other things, the repayment of loans owed by large borrowers, the respective adjustment of provisions, a decrease in the Bank's holdings of non-government securities, conversion of subordinated debt, the payment of contributions to the authorized capital, and partial debt forgiveness by the shareholder.
The NBU emphasizes that 98% (97.7 thousand individuals) of all the depositors of Fidobank PJSC 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 Deposit Guarantee Fund. Customers with larger deposits (above the insured deposit amount) will be reimbursed up to the compensation limit guaranteed by the Fund. The Deposit Guarantee Fund will pay out a total of about UAH 1.8 billion in compensation to eligible depositors.
As of 20 May 2016, Mr Oleksandr Adarich is the ultimate beneficial owner of Fidobank PJSC. Mr Adarich currently holds a 50% stake in Eurobank. On 18 May 2016, the NBU gave its approval to a Kazakh national, Mr Bolat Nazarbaiev, for the aquisiton of a direct qualifying holding equal to 50% in Eurobank.