One of the largest banks in Ukraine will be nationalized: possible date and consequences named

One of the largest events in the banking market may take place in Ukraine already in June. Sense Bank (Sense Bank, former Alfa-Bank) will be nationalized. The corresponding bill has already been adopted, and sources in the National Bank say: on June 2, the decision on the bank can be approved. About what the nationalization of Sens Bank will lead to and what is the future fate of the financial institution, read the material GLOBAL HAPPENINGS.

There are already buyers on Sens Bank. The Poles are interested in them

“Andrey Grigoryevich (Pyshny, head of the NBU. – Ed.) Should return from a business trip on Friday. If he succeeds this Friday, a decision will be made on June 2. Otherwise, next week,” says the interlocutor at the National Bank. Pyshny’s deputies have been preparing for a decision on nationalization for seven months, they have also been negotiating with international partners (important decisions are being discussed in advance). Therefore, all documents for nationalization are ready.

Now the NBU board must decide on the liquidation of Smysl Bank (owned by the Russian billionaire under sanctions Mikhail Fridman) and propose to the Cabinet of Ministers to nationalize it. Then the Deposit Guarantee Fund will intervene, and a temporary administration will appear in the bank. So from a private Sens Bank will turn into the fifth state bank.

But he will probably not stay public for long. Polish lawyers have already approached both the NBU board and the Cabinet of Ministers. A Polish investor (whose name has not been released) plans to buy Sens Bank and is allegedly ready to do so in the near future. The question is how much the bank will be worth in a full-scale war. For example, plans to sell PrivatBank (due to take place in 2024) were postponed because a high market price cannot be expected until the end of the war.

“There is a very interested Polish investor. It is quite possible that even before the victory in the war the bank will be sold,” said a banker close to the regulator who participated in the consultations.

2022 Meaning The bank was in deficit, but the financial institution notes that the deficit was formed due to the need to create reserves. At the same time, operating profit amounted to UAH 12 billion and decreased by only 2% during the year of full-scale war. The state as a result of nationalization (including four more state-owned banks) will control 56.6% of the entire banking market.

Both the NBU and the Cabinet of Ministers agree that this should not be the case. And the recommendations of the IMF sometimes sound the need to sell state-owned banks. The privatization process was scheduled for 2024. Now the sale of Privat, Oschad, Ukrexim and Ukrgasbank is out of the question. But “Sens Bank” can very quickly return to private ownership.

Interestingly, the law allowing the nationalization of Sens Bank is spelled out in such a way that Fridman will receive damage only if Russia compensates Ukraine for the damage caused as a result of an aggressive war. So far, no one can guarantee the voluntary payment of reparations following the results of the war. Therefore, there are no guarantees that Friedman will be able to get at least something for his bank.

What will happen to bank customers

Sens Bank assets amount to UAH 97.65 billion, while about 2.9 million clients have placed their funds in a financial institution. The bank is among the ten largest and is systemic. That is, it cannot be closed just like that: in this case, there is a threat to the financial stability of the entire market.

For a long time, Sens Bank did not touch. And its owner, Mikhail Fridman, tried by all means to convince both the Ukrainian and European authorities of his anti-war position. Despite this, Fridman continues to do business in the Russian Federation. And a recent investigation revealed that his company insures the trucks of the National Guard.

Now the main task of both the NBU and the Deposit Guarantee Fund of individuals and the Ministry of Finance: to make sure that nationalization goes unnoticed by clients. Perhaps this is how it will happen. The bank does not need urgent “rescue”, it complies with the National Bank’s standards. There are no economic reasons for liquidation. Therefore, the state will not spend a lot of money on nationalization. And if the bank can be quickly sold, the state can still earn.

Danilo Getmantsev, chairman of the Council Committee on Finance, Tax and Customs Policy, explains that the purpose of the new law is to stability of the banking system under martial law. It is also a priority to protect the rights and interests of depositors and other creditors of banks. Like, no laws are written for a specific bank.

Although in fact we are talking about economically successful system banks. There is only one in Ukraine. Previously, in order for the National Bank to start the nationalization procedure (first liquidation is initiated, and then the Cabinet of Ministers is offered to nationalize), the bank had to violate economic standards. That is, there should be a threat that the bank will burst – and depositors will lose their money. Now, even without such a threat, a bank owned by a businessman under sanctions can be carried away.

In a conversation with GLOBAL HAPPENINGS, the financial committee explained: there really is logic in this. It’s not just about a political decision. If the bank needs additional capitalization, this should be at the expense of the owner. If the owner’s accounts are blocked, he is under sanctions, in the future it will be extremely difficult for such a bank to recapitalize.

Despite the full-scale war, Ukrainian banks continue to operate and show operating profits. The banking system, like the country, showed amazing resilience in the face of war.