National Bank of Ukraine Declares CB KHRESCHATYK PJSC Insolvent

On 5 April 2016, pursuant to Article 76 of the Law of Ukraine On Banks and Banking, the Board of the National Bank of Ukraine issued Resolution No. 234 on declaring CB KHRESCHATYK  PJSC insolvent.

The National Bank of Ukraine emphasizes that 98.7% (304 thousand individuals) of all the depositors of CB KHRESCHATYK  PJSC  will be paid out in full, as amounts held in their deposit accounts fall within the insured deposit amount of UAH 200 thousand, which is covered by the Deposit Guarantee Fund (hereinafter – the Fund).    Customers with larger deposits (above the insured deposit amount) will be reimbursed up to the compensation limit guaranteed by the Fund.

“At the end of last week the bank's liquidity position deteriorated sharply.  Due to the shortage of liquidity the bank began put payments on hold and required financial support from its shareholders emerge from the turmoil.  The NBU was engaged in talks with the bank’s shareholders. However, the talks have ended without making any substantial progress.  In view of the above and given CB KHRESCHATYK  PJSC’s failure to comply with liquidity and capital ratios, the NBU Board has declared this bank insolvent,” said NBU Deputy Governor, Ms Kateryna Rozhkova.

She reminded that the Kyiv City State Administration approved a decision to inject UAH 150 million into the bank's capital. However, this amountshould have been injected into the bank's capital following similar measures taken the bank’s majority shareholders who have failed to meet their commitments. 

It should be stressed that the NBU’s efforts resulted in the  recognition of the bank’s ownership structure as transparent. The bank's beneficial owners are Mr Andrii Ivanov (holding a 37.44% stake),  the Kyiv territorial community  represented by the  Kyiv City State Administration (a 25% stake), Mr Mykola Soldatenko (holding a 24.24% stake), and a number of minority shareholders.

Pursuant to Article 76 of the Law of Ukraine On Banks and Banking, the NBU is obliged to take a decision to declare a bank insolvent if the bank’s regulatory capital, or capital ratios, have decreased to one third of the minimum amount stipulated by the applicable law, and/or NBU regulations.

 In early February the NBU granted a short-term of UAH 190 million to CB KHRESCHATYK  PJSC against the collateral of domestic sovereign bonds to support the bank’s liquidity. This is the only outstanding debt owed by the bank to the regulator.

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