Ukraine on Sunday nationalized the nation’s biggest bank in a bid to avert a financial meltdown in the war-scarred country.
The government took over PrivatBank after months of rumors that the lender was heavily burdened by bad debts.
PrivatBank controls one-third of Ukraine’s deposits and has branches in the Baltic states.
The Ukrainian government said in a statement that it was now the “100 percent owner of PrivatBank and guarantees the uninterrupted functioning of the institution and the safety of its clients’ money.”
Kiev’s decision falls in line with the IMF’s demand for Ukraine to clean up and stabilize its murky financial sector to achieve sustainable growth.
The bank was owned by Igor Kolomoyskiy — a politically influential billionaire who became an early target of Ukrainian President Petro Poroshenko’s uphill fight against corruption.
The bank has also been the subject of local media reports suggesting it issued loans to select insiders that might never be repaid.
That talk alone saw the value of PrivatBank’s bonds fall by about 50 percent late last month.
Ukraine’s central bank had asked Kolomoyskiy to refinance his bank with billions of US dollars if he wanted to keep it.
However, the money never emerged and Kiev’s patience snapped on Sunday.
Oleksandr Savchenko, head of Kiev’s International Institute of Business, told the English-language weekly Kyiv Post that Ukraine’s banking system would have been left in tatters if PrivatBank were to close.
“Other banks would not be getting their loans back from PrivatBank, a series of bankruptcies would begin and there would be panic,” Savchenko was quoted as saying. “Relaunching the system would take about one or two months; the loss to GDP would be about 2 to 3 percent.”
Dragon Capital economist Sergiy Fursa said that “80 to 90 percent of PrivatBank’s loans were to institutions” controlled by Kolomoyskiy himself.
“This was insider lending — in other words, money was withdrawn by its owners from the bank,” Fursa said.
PrivatBank called the government’s decision a consequence of “media attacks” led by political insiders who opposed Kolomoyskiy.
“The decision to voluntarily and peacefully hand over the bank to the government was taken at the very moment that we understood that these media attacks — which we could survive — could endanger our clients,” the bank’s IT director wrote on Facebook.
PrivatBank deputy chief executive officer Oleg Gorokhovskiy said the most important thing was that Ukrainians’ money was still safe.
“The bank will continue working, just as it did before,” Gorokhovskiy said.
Kolomoyskiy was not immediately available for comments.
Anna Bhobho, a 31-year-old housewife from rural Zimbabwe, was once a silent observer in her home, excluded from financial and family decisionmaking in the deeply patriarchal society. Today, she is a driver of change in her village, thanks to an electric tricycle she owns. In many parts of rural sub-Saharan Africa, women have long been excluded from mainstream economic activities such as operating public transportation. However, three-wheelers powered by green energy are reversing that trend, offering financial opportunities and a newfound sense of importance. “My husband now looks up to me to take care of a large chunk of expenses,
SECTOR LEADER: TSMC can increase capacity by as much as 20 percent or more in the advanced node part of the foundry market by 2030, an analyst said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to lead its peers in the advanced 2-nanometer process technology, despite competition from Samsung Electronics Co and Intel Corp, TrendForce Corp analyst Joanne Chiao (喬安) said. TSMC’s sophisticated products and its large production scale are expected to allow the company to continue dominating the global 2-nanometer process market this year, Chiao said. The world’s largest contract chipmaker is scheduled to begin mass production of chips made on the 2-nanometer process in its Hsinchu fab in the second half of this year. It would also hold a ceremony on Monday next week to
TECH CLUSTER: The US company’s new office is in the Shalun Smart Green Energy Science City, a new AI industry base and cybersecurity hub in southern Taiwan US chip designer Advanced Micro Devices Inc (AMD) yesterday launched an office in Tainan’s Gueiren District (歸仁), marking a significant milestone in the development of southern Taiwan’s artificial intelligence (AI) industry, the Tainan City Government said in a statement. AMD Taiwan general manager Vincent Chern (陳民皓) presided over the opening ceremony for the company’s new office at the Shalun Smart Green Energy Science City (沙崙智慧綠能科學城), a new AI industry base and cybersecurity hub in southern Taiwan. Facilities in the new office include an information processing center, and a research and development (R&D) center, the Tainan Economic Development Bureau said. The Ministry
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
RSS