The Cabinet of Ministers has authorized Minister of Finance Serhiy Marchenko to agree on a mandate letter between Oschadbank and the European Bank for Reconstruction and Development (EBRD) regarding the start of work on a project to attract a long-term loan of up to EUR 100 million.

The decision was made by the government at a meeting on Wednesday.

According to an explanatory note to the draft order, the signing of the mandate letter will allow the bank to attract a loan on terms of subordinated debt in the amount of up to EUR 100 million in equivalent with the option of converting into bank shares.

As Board Chairman of Oschadbank Serhiy Naumov said, this decision is a significant progress in enhancing cooperation between the bank and the EBRD.

"Firstly, this is another significant step towards the privatization of Oschadbank, which the government has identified as a strategic goal. Secondly, this is a future investment in Oschadbank, and therefore in the Ukrainian economy. The bank plans to use these funds to support domestic business," Naumov said on Facebook on Wednesday.

In 2020, the Cabinet of Ministers updated the Fundamentals of Strategic Reform of the State Banking Sector, setting one of the priorities to reduce the state's share in the banking sector of Ukraine. And in 2016, the government, the EBRD and Oschadbank signed a Memorandum of Understanding, which provides for the provision of support to Oschadbank from the EBRD in the development and implementation of a comprehensive transformation program in order to commercialize it and prepare for privatization.

According to the preliminary roadmap for the potential entry of the EBRD into the capital of Oschadbank, one of the conditions is the approval of the Strategy by the Cabinet of Ministers and the signing of the mandate letter between the bank and the EBRD, according to the explanatory note to the draft order.

Oschadbank was founded in 1991. Its sole owner is the state. According to the statistics of the National Bank, as of March 1, 2021, Oschadbank ranked second in terms of total assets (UAH 279.702 billion) among 73 banks operating in the country.