The legal merger of Alfa-Bank Ukraine and Ukrsotsbank (Kyiv) will be completed in H1 2019, Alfa Group CEO in Ukraine and Board Chairman of Ukrsotsbank Ivan Svitek has said.
“The legal merger is scheduled for the first half of the next year, but before the merger of the two giants as Alfa and Ukrsotsbank, and there have not yet been such mergers in the Ukrainian market, we need to do a lot of preparatory work. We are now trying to transfer all active clients of Ukrsotsbank to the Alfa platform. Our goal, to which we are systematically moving, is the transfer of 75% of all active clients, including in business volumes, to Alfa Bank’s balance sheet by the end of 2018,” Svitek said in a joint interview with Board Chairperson of Alfa Bank Ukraine Victoria Mykhailo with Interfax-Ukraine.
According to Mykhailo, during the preparation for migration, a soft format “2 in 1” was developed, when branches of two banks – Ukrsotsbank and Alfa-Bank are located on the Ukrsotsbank platform.
“Using this format, we can immediately tell Ukrsotsbank’ clients, while they use the usual service in the convenient branch, about all the benefits of switching to Alfa-Bank. The main argument, of course, is Alfa’s technological effectiveness. We took a lot of cool ideas and projects of Ukrsotsbank, including, for example, the Carbon card loved by customers, so clients in the 2-in-1 offices in a convenient format transfer liabilities from Ukrsotsbank to Alfa with a bonus and get more premium cards and products,” she said.
Mykhailo added that often for a client nothing changes in the current work with the bank: it is served by the same managers as before, but now employed in Alfa Bank.
Commenting on the optimization of the regional network, Mykhailo said that currently two banks are entering the final wave of migration, in which from 301 branches of Alfa-Bank and Ukrsotsbank as of the beginning of this year only 241 branches of Alfa-Bank and 8 hubs in different regions, which will work in the “2 in 1” format will remain by the end of the year.
The net profit of Raiffeisen Bank Aval (Kyiv) in January-June 2018 totaled UAH 2.72 billion, which is 0.5% more than a year ago (UAH 2.738 billion).
According to a financial report on the bank’s website, net profit in Q2 2018 accounted for UAH 1.371 billion, which is 6.4% more than in Q2 2017.
Net interest-bearing income in H1 2018 grew by 24.3%, to UAH 3.404 billion.
The loan profit of the bank fell by 48.2%, to UAH 510.006 million, and non-interest income – by 15.3%, to UAH 233.123 million.
Non-interest expenses grew by 12.7%, to UAH 1.927 billion.
The bank’s assets rose by 3.2% in H1 2018, reaching UAH 68.411 billion, including loans issued to clients rose by 12.3%, to UAH 41.393 billion.
The charter capital decreased 0.02%, to UAH 6.153 billion and net worth – by 14.9%, to UAH 9.285 billion.
Raiffeisen Bank Aval was founded in 1992. According to its data, as of January 1, 2018 Raiffeisen Bank International owned 68.28% of the charter capital of the financial institution, the European Bank for Reconstruction and Development (EBRD) some 30%.
Raiffeisen Bank Aval ranked fifth among 84 operating banks in terms of assets as of June 1, 2018 (UAH 69.317 billion), according to the National Bank of Ukraine.
The growth of Ukraine’s gross domestic product (GDP) in the second quarter of 2018 slightly accelerated, to 3.2% from 3.1% in the first quarter, the National Bank of Ukraine said.
The National Bank of Ukraine (NBU) has worsened expectations as of the growth of the Ukrainian economy in 2019 and predicts a slowdown to 2.5%.
Ukraine’s Cabinet of Ministers has approved a list of another 288 investment programs and projects for regional development to the tune of over UAH 1.8 billion, which will be financed by the State Fund for Regional Development in 2018.
The amount of money transfers from abroad to Ukraine in the first quarter of 2018 increased by 34.2% compared to the first quarter of 2017, to $2.614 billion, or 10.2% of gross domestic product (GDP.
The total amount of wage arrears in Ukraine in May 2018 increased by 3.5%, and as of June 1, 2018 amounted to UAH 2.561 billion. Real wages in Ukraine in May 2018 compared to April increased by 2.9%, compared to 2018 May 2017 by 14.1%.
The deficit of Ukraine’s foreign trade in goods in January-May 2018 increased by 1.4 times compared with January-May 2017 and amounted to $2.055 billion.
Consumer prices in Ukraine in June 2018 remained zero for the second consecutive month, their growth since the beginning of the year was 4.4%, the State.
The National Bank of Ukraine (NBU) has left unchanged the forecast for inflation at the end of 2018 at 8.9%.
Revenue of Ukraine’s national budget in the first half of 2018 amounted to UAH 463.18 billion, lagging behind the planned figures by 3.1% (against 0.6% below the target in the first five months and 1.8% in the first four months).
The assets of the National Bank of Ukraine (NBU) as of July 1, 2018, amounted to UAH 942.724 billion, which was 8.2% less than at the beginning of the year.
Money supply in Ukraine increased by 1% in June 2018, to UAH 1.210 trillion, according to a preliminary statistics report by the National Bank of Ukraine (NBU) released on its website.
Ukraine’s international reserves in June 2018 shrank by 1.1%, to $17.978 billion.
Industrial production in Ukraine in June 2018 increased by 2.2% compared to June 2017, while in May this figure was 2.5%, in April 3%.
Ukraine’s retail trade in January-June 2018 increased by 6.2% in comparable prices compared to January-June 2017.
President of Ukraine Petro Poroshenko has signed the law on basic principles and requirements for organic production, circulation and labeling of organic products, the presidential press service has said. According to the report, the implementation of the norms of the law will ensure the improvement and harmonization of the Ukrainian legislation with the legislation of the European Union in the sphere of production and circulation of organic goods and will help create transparent business conditions, reduce unfair competition, increase the competitiveness of domestic organic products and expand foreign markets for its sale.
The law establishes the basic principles and requirements for organic production, circulation and labeling of organic products, the basis for the legal regulation of organic production, the circulation of organic products and the functioning of the market of such goods. The legal basis for the activity of central executive authorities, the subjects of the organic products market and the direction of state policy in these areas are also defined.
As reported, the Verkhovna Rada on July 10 at second reading and as a whole adopted law No. 5448-d on basic principles and requirements for organic production, circulation and labeling of organic products. Some 237 people’s deputies voted for the document with the quorum being 226 votes.
The introduction of an exit capital tax, envisaged by the draft law on amendments to the Tax Code of Ukraine regarding the tax on exit capital (No. 8557), will draw the attention of tax authorities to companies carrying out foreign economic operations, expert for transfer pricing at Evris law firm Yekateryna Kuzmina has told Interfax-Ukraine. “Companies that carry out foreign economic operations will be under a special attention of tax authorities in case this tax is introduced. In view of the fact that the exit capital tax is focused on foreign economic transactions, the controlling authorities will pay closer attention to compliance with transfer pricing rules, since this will be one of the main instruments to ensure new tax payment,” she said.
The expert noted that since the exit capital tax will have to be paid for each specific operation, the controlling bodies will no longer need to conduct long-term tax inspections as to the correctness of determining the financial result, in theory it will be enough for them to analyze bank statements and contracts.
“Thus, it is likely that the controlling bodies will concentrate their entire attention on initiating and conducting inspections,” Kuzmina believes.
She noted a number of changes in transfer pricing that will occur after the alleged adoption of the exit capital tax, in particular, small businesses will be required to prepare reporting on transfer pricing, the accumulated losses or other costs will not be able to compensate for the need to pay the exit capital tax to the budget, in addition, control over compliance with transfer pricing rules will be tightened.
Kuzmina noted that the practice of the exit capital tax is unpopular in the world – such taxes exist only in Estonia (since 2000), Georgia (since 2017), and Latvia (since 2018). It is assumed that the introduction of this tax will stimulate Ukrainian companies to invest in the development, building up business or production.
“This is due to the fact that if companies reinvest the earned funds in the development and do not withdraw resources from the enterprise by paying dividends, irrevocable financial assistance, free transfer of goods, labor and services, royalties, interest and other operations that lead to withdrawal of capital from the company, there will be no object for exit capital tax and the companies will not pay the tax. Thus, the importance of transfer pricing rules that regulate foreign economic operations rises significantly,” the expert summed up.
