Cabinet Decides on Privatbank Nationalization

UKRAINE - In Brief 18 Dec 2016 by Dmytro Boyarchuk
Today the Cabinet approved nationalization of the largest private bank (20 million clients) Privatbank, according to the Cabinet web-site. The bank was previously owned by oligarch Igor Kolomoyskiy. Press-briefing on this issue is scheduled for Monday morning. Some rumors tell that ex-Finance Minister Oleksandr Shlapak will be appointed as the Head of temporary administration of the bank. Privatbank needs near UAH 130 billion of recapitalization which is close to $5 billion or 5.6% of GDP. For more than a year the Central bank had been negotiating with Igor Kolomoyskiy the need to return money to the institution. Some progress was achieved on the quality of collaterals of loans provided to the companies of Igor Kolomoyskiy (the initial number on recapitalization was near UAH 160 billion) but apparently it was not enough. Over the last few months tension was growing, media-attack on the Head of the Central bank Valeria Gontareva was incredibly intense (including street protests). Last week all leading media had been discussing whether the authorities will have guts for such move or not. Many did not believe in such step till the last moment. We will learn more details about the process of nationalization tomorrow morning. But from info that we had till now – the Cabinet does not plan to pay on bonds of Privatbank.

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