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Ukraine's Deposit Guarantee Fund seeks to remove insolvent Finbank from market

Ukraine's Deposit Guarantee Fund seeks to remove insolvent Finbank from marketThe Individuals Deposit Guarantee Fund has started searching for authorised persons interested in participating in the removal of insolvent Finbank (Odesa) from the market, the fund has reported on its website.

Preliminarily the authorized persons would have the following ways to remove the bank from the market: liquidation of the bank, selling its assets and liabilities to the accepting bank; the creation of a transition bank and its transfer to the investor with assets and liabilities and further liquidation of the insolvent bank; and the sale of the insolvent bank.

The fund synchronously is holding a tender to select the accepting bank if the fund's top managers decide that the removal of Finbank via its liquidation and refunding of deposits is expensive.

Bids can be submitted until April 27, 2017. The fund will study the bids before May 4, 2017. The terms could be expanded.

The authorised persons are to submit the guarantee fee of UAH 20-40 million depending on the way of removing the bank from the market before April 27, 2017.

The funds that can be refunded by the fund totalled UAH 3.1 million as of April 1, 2017.

The fund said that 99% of all depositors of the bank will receive their deposits in full amount, as their size does not exceed the sum guaranteed by the Deposit Guarantee Fund (UAH 200,000).

As reported, the NBU on April 7, 2017, declared Finbank insolvent.

The National Bank noted that following the results of examination of Finbank, held on April 1, 2016, the NBU board in October 2016 approved the necessary amount of capitalization for the financial institution. Finbank, in turn, submitted a program of capitalization to the regulator. However, as of April 1, 2017, these measures had not been implemented.

In addition, Finbank has not submitted a plan of measures in due time to bring the bank's activity in line with the requirements of the legislation and NBU regulations on transactions with related entities.

According to the NBU, the majority shareholder in the bank is Ukrainian businessman Oleksandr Hranovsky (79.66%).
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