5 Oct 2009 15:19

Ukrainian banking sector to experience wave of mergers and acquisitions - NBU

KYIV. Oct 5 (Interfax) - Ukraine's banking sector expects a wave of mergers and acquisitions that would reduce the number of banks operating in the country, said Pyotr Poroshenko, the head of the Council of National Bank of Ukraine (NBU).

"The crisis has shown that the Ukrainian banking system is not prepared for such challenges. Therefore, the banking sector expects a wave of mergers and acquisitions, [leading to] a decrease in the number of banks," Poroshenko said in an article published in Ukraine's Investgazeta.

He said that harsh measures were necessary to restore the banking system such as liquidating toxic assets.

According to Poroshenko's estimates, the bulk of Ukraine's battle with the main fallout of the crisis remains ahead.

"We have delayed [dealing with a] series of problems into the future, unfortunately, the near future, by not wanting and not having the opportunities to solve them in the here and now," he stressed.

At the start of September, a total of 184 banks, including 51 financial institutions with foreign capital, were in operation in Ukraine. At the start of October, temporary administration from the NBU had been instituted at 15 banks. These measures delay payment of debts over a period of two weeks, in order to restore these banks' ability to meet their obligations.