16 Jun 2023 16:14

Ukraine passes law allowing nationalization of Sense Bank

MOSCOW. June 16 (Interfax) - Ukrainian President Vladimir Zelensky has signed a law to remove sanctioned banks from the market.

According to a filing on parliament's website regarding the law on amendments to some laws on improving the procedure for withdrawing a bank from the market under martial law, the document was returned to parliament with the president's signature on Friday.

Ukrainian media quoted Ukrainian MP Yaroslav Zheleznyak as saying on Telegram that once the law has been enacted, the National Bank of Ukraine will be "obliged to launch a procedure for the nationalization of one bank, that is, ex-Alfa [now Sense Bank]."

The law makes it possible to remove a systemically important bank from the market (nationalization) in the absence of signs of insolvency (when blocking sanctions of Ukraine are applied to the bank or the owner of a significant stake in it).

The parliament passed the law at its final reading on May 29.

Daniil Getmantsev, head of the parliamentary committee on finance, tax and customs policy, has said the bill is directed mainly at Sense Bank, since its controlling stake is owned by the Russian businessmen Andrei Kosogov, Mikhail Fridman and PyotrAven, who are sanctioned in Ukraine, although in there are also indirect shareholders in the Italian Unicredit s.p.a. and the Mark Foundation for Cancer Research.

Sense Bank was the 10th largest of the 65 banks operating in the country as of the beginning of April bank by assets, which were UAH 97.65 billion.

The law will also affect the sanctioned co-owner of Motor-Bank and ex-president of the Motor Sich Corporation Vyacheslav Boguslayev, who the National Bank denied the right to vote with 100% of the shares of the financial institution in November 2022. At the beginning of April of this year, Motor-Bank ranked 52nd among Ukrainian banks by assets, while at the beginning of September last year it was 45th. Its net loss for Q1 of this year was UAH 25.4 million, and for last year UAH 9.7 million.

First Investment Bank (PINbank), in which 88.890583% was owned by Russian citizen Yevgeny Giner included in the Ukrainian sanctions lists, has already been effectively nationalized after the Appeals Chamber of Ukraine's High Anti-Corruption Court in mid-March this year upheld a ruling to expropriate this block of shares.

The parliament in 2022 passed a law on a simplified procedure for the nationalization of systemically important banks, which allows this to be carried out without recapitalization by the state; the only condition for nationalization was the loss of liquidity by the bank. A number of deputies and experts argued that this law should apply to Sense Bank, but at present its financial results do not give any grounds for this.

The majority owner of Sense Bank, ABH Holdings S.A., has reached an agreement with an international investor to sell 75.6% of the bank's shares for a symbolic $1.

Ukraine expropriated shares in subsidiaries of Sberbank and VEB back in 2022. Earlier, in 2018, it was decided to revoke the license and liquidate the Ukrainian subsidiary of VTB Bank