The liquidation of Delta Bank (Kyiv) and large-scale payments to its depositors by the Individuals' Deposit Guarantee Fund is the worst case scenario, Director-Manager of the Fund Kostiantyn Vorushylin has said.

"The worst option is the liquidation of the bank. According to tentative calculations, UAH 16.7 billion is to be paid via the fund. The figure is large," he told reporters on Thursday.

Vorushylin said that the major part of the bank's assets has been used as collateral two of three times, including UAH 9.3 billion under National Bank of Ukraine (NBU) refinancing credits, and that no one has learnt the real state of affairs at the bank yet.

"New and new "snowdrops" appear," he said.

As reported, temporary administration at Delta Bank was introduced on March 3, 2015. Its largest shareholders as of early 2015 were Mykola Lahun (70.6059%) and Cargill Financial Services International, Inc. (29.3941%).

According to the Vorushylin, along with the funds of state enterprises, state enterprises assets worth UAH 8.4 billion are blocked at Delta Bank: UAH 3.5 billion of the State Mortgage Institution, UAH 1.6 billion of Ukreximbank, and UAH 3.3 billion of Oschadbank.

He said that there are two options for settling the situation: the formation of a transition bank or assigning an accepting bank.

"The option [of the formation of the transition bank] is working. However we should understand that it should have a large charter capital: ideally UAH 10 billion… This is not the restructuring of old debts, but injecting "live" money," he said.

"There is no solution to the issue – it is under discussion… I clearly understand: unfortunately, it would be impossible to create this bank without state participation," Vorushylin added.

He said that only state-run Oschadbank could act as an accepting bank for Delta Bank.

Vorushylin also said that PrivatBank, the largest bank in Ukraine, has shown an interest in the retail portfolio of Delta Bank.

He said that additional consultations and agreement with the World Bank and the International Monetary Fund (IMF) over any action taken would be required.

Vorushylin also said that the NBU supported the nationalization of Delta Bank, while the Finance Ministry opposed it.

He said that the transfer of Delta Bank to the Deposit Guarantee Fund would require an increase of the fund's financing: the UAH 20 billion foreseen in the budget is not enough to settle payments to depositors.

He said that the largest fund financing could reach UAH 50 billion.

He also said that the cost of loans made by the fund is being discussed.

"We're fighting for having lower credit rates and longer terms… The credit rates on credits we’ve taken reached the level of payments we receive from banks during one year," he said.

Vorushylin said that five-year borrowing does not suit the fund; it requires 10-12 year securities.

According to his information, the IMF insists that the fund borrows the money under market conditions, and that no understanding on the issue has been yet reached.

When commenting on the prospect of introducing temporary administrations to other banks, he said that the situation could rapidly change, which makes it difficult to forecast.

He said that only the top managers and owners of banks know the real state of affairs at their banks.