Almost 80% of assets of banks under liquidation exist only in paper
Almost 80% of the cost of assets of banks under liquidation exist only in paper, according to reports of independent appraisers, the Individuals Deposit Guarantee Fund has reported.
"Assets of 70 banks under liquidation, where the revision of the assets that can be sold is finished, were appraised by independent experts at only UAH 94 billion, while in paper their cost exceeded UAH 418 billion," the fund said, adding that appraisers first paid attention to the quality and the market price of collateral for credits.
The share of credits of total insolvent banks' assets is 80%. Almost entire credit portfolio of insolvent banks (90%) is bad and it is not serviced. The fund said that less than 5% of borrowers continue meeting its commitments to banks after they are declared insolvent.
"Almost a half of the credit portfolio of all insolvent banks (almost UAH 180 billion) were issued to 600 large business groups, and a half of them are persons affiliated with bank who do not carry out their commitments," the fund said.
The fund said that some borrower and facilities used as collateral at banks are located in Crimea and ATO zone. Assets worth over UAH 50 billion are located in the areas not under control of the Ukrainian government.
In addition, over 10% of the total credit portfolio of banks (UAH 37 billion) is credits where junk securities were used as collateral.
Hryvnia devaluation also affects the quality of assets, as well as artificial bankruptcy of borrowers, removal of funds via placing them at correspondent accounts in foreign banks, poor protection of rights of creditors and imperfect judicial system.
The fund said that only at seven banks, in particular, Tavrika, VAB, Delta Bank, bank Forum and Finance and Credit Bank, borrowers with credits of almost UAH 40 billion became bankrupt. Some $748 million and EUR 75 million (near UAH 21 billion) were removed from 14 banks via placing the money on the correspondent accounts at Meinl Bank AG (Austria), Bank Frick and Co.AG (Lichtenstein), East-West United S.A. and Bank Winter & Co.AC.
The fund as of early 2017 had submitted 3,651 applications to law enforcement agencies reporting crimes committed at banks seeking to collect UAH 277 billion, including 396 applications against owners and heads of banks (UAH 178 billion).
Over UAH 3 billion was received from selling banks' assets last year. Since February 2016 sales of all assets of insolvent banks were transferred to the ProZorro.Sales system.