Nationalized PrivatBank is waiting for 117 billion recapitalization

The Cabinet of Ministers of Ukraine has instructed the Ministry of Finance to issue 15-year government domestic bonds worth UAH 116.8 billion at 10.5% per annum to pay for shares of the Ukraine’s largest bank, PrivatBank, nationalized by the government decision of December 18, UNIAN informed.

Government Decree No.961 says: "The Ministry of Finance shall provide a transparent, controlled, continuous operation of information technology system and information processing, as well as an agreement with the National Bank of PJSC PrivatBank’s liquidity support plan." The decree also obliges the finance ministry “to carry out the issue of government domestic bonds worth up to UAH 116.8 billion with a 15-year maturity and the annual interest rate of income at the level of no more than 10.5%, followed by their introduction in the name of the State as payment for the additional shares of PJSC CB PrivatBank. Within a three-months term [the finance ministry] shall submit proposals on the need for recapitalization of PJSC CB PrivatBank on the results of the evaluation of the bank’s financial condition by an international auditor."

As UNIAN reported earlier, the Cabinet of Ministers at its extraordinary meeting on Sunday, December 18, decided to transfer PrivatBank to 100% state ownership. The decision was made based on the results of the meeting of the National Security and Defense Council on the proposal of the National Bank of Ukraine. Minister of Finance Oleksandr Danyliuk pointed out that PrivatBank would continue its operations as usual, and the new management team will be formed in the coming days. At the same time, he noted that the bank's capital increase will take place in several stages. The maximum amount of capital increase will be UAH 148 billion, while the minimum amount will be no less than UAH 116 billion.

Also, Deputy Head of the NBU Yakov Smoliy said that the decision to nationalize PrivatBank had not affected the banking system and posed no significant threats to the financial stability of the State. Earlier, both the President of the European Bank for Reconstruction and Development, Suma Chakrabarti, and Chief of the International Monetary Fund Christine Lagarde expressed support for PrivatBank nationalization

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