Kyiv-based state-owned bank Savings Bank of Ukraine (Oschadbank) and the European Bank for Reconstruction and Development (EBRD) have signed a Memorandum of Understanding (MoU) to support reforms at the bank and an agreement providing guarantees of up to EUR 50 million to the bank under the Trade Facilitation Programme (TFP).

Oschadbank said in a press release that Ukrainian Finance Minister Oleksandr Danyliuk, Oschadbank Board Chairman Andriy Pyshny and EBRD Managing Director for Eastern Europe and the Caucasus Francis Malige signed the memo.

Under the memo Oschadbank would receive a comprehensive package of technical assistance from the EBRD at the first stage aimed at developing crediting of micro, small and medium-sized enterprises, centralization and optimization of its network's departments, risk management and compliance.

The Finance Ministry said that this would help to increase the bank's value and its attractiveness for investors.

"One of the key elements of the state-owned banks reform is partial privatization of Oschadbank and Ukreximbank by the middle of 2018: after selling 20% of shares the state would retain a controlling stake of 80% and receive more transparent and effective management," the ministry said.

As reported, the EBRD Board on October 4 decided to provide a facility of up to EUR 50 million under the Trade Facilitation Programme for Oschadbank.

The project is undertaken within a broader effort aimed at facilitating Oschadbank's commercialization and preparation for eventual privatization in the context of the state-owned bank reform program that is developed and being implemented by the government of Ukraine.

This effort will include several stages of financing and Technical Cooperation over a period of up to five years, beginning with the TFP facility and an associated Technical Cooperation Project. The subsequent stages of a broader cooperation in preparation for the privatization are linked to and conditional upon the progress in improvement of corporate governance; commercialization of operations, and operational overhaul of Oschadbank.

Oschadbank was founded in 1991. Its sole owner is the state.

Oschadbank ranked second among 108 operating banks in the country on October 1, 2016 by total assets (UAH 191.585 billion), according to the National Bank of Ukraine.