NBU: Strategic investor for Oschadbank, Ukreximbank should be attracted as quickly as possible
A strategic investor for State Saving Bank of Ukraine (Oschadbank) and State Export-Import Bank (Ukreximbank) should be attracted as quickly as possible, the National Bank of Ukraine (NBU) has said.
"[Banks] will face strengthening of their specialization and a switch to operations based only on the principles of boosting return on invested capital. A strategic investor for Oschadbank and Ukreximbank should be attracted as soon as possible. The state should withdraw from all other banks in the shortest terms," the central bank said in its first financial stability report posted on its website.
According to the document, stress tests conducted by the NBU in 2015 showed that Oschadbank and Ukreximbank would require additional capital in 2017 if no measures aimed at improving profit-making are taken: in late January 2016. The government has additionally capitalized the two banks for the total amount of almost UAH 14.3 billion from the national budget.
The central bank said that by April 2016 six banks with a large state-owned stake in capital were operating in Ukraine (over 85%): Oschadbank, Ukreximbank, Ukrgasbank, Clearing Center, State Land Bank and Ukrainian Bank for Reconstruction and Development.
"Total expenses on additional capitalization of state-run banks in 2008 through Q1 2016 reached UAH 88.5 billion [$8.7 billion at the historic exchange rate]. In addition, spending on servicing government domestic loan bonds used to capitalize the banks reached UAH 37 billion as of late March 2016," the NBU said.
According to the report, plans regarding largest state-run banks declared by the government envisage sale of at least 20% of shares in Oschadbank to an investor by the middle of 2018 and the decision on terms and conditions of gradual joining the bank to the Individuals' Deposit Guarantee Fund starting from 2017.
The government also intends to sell at least 20% of shares in Ukreximbank to an investor by the middle of 2018, sell a state-owned stake in Ukrgasbank by the end of 2017 and withdraw from capital of other banks in 2016.