The United States has added Alfa Bank’s co-owners to the sanctions list.
Thus, Pyotr Aven, Mikhail Fridman, German Khan and Alexei Kuzmichev have fallen under the restrictions.
Olena Zubchenko, Oleksiy Shklyaruk, Inna Tyutyun and Andriy Sokolov have become board members of Sence Bank (Kyiv, formerly Alfa-Bank) after its nationalization at the recommendation of the Ministry of Finance, according to the information on the website of the financial institution.
More detailed information about them is not yet available, but it is known that Zubchenko headed the Department of Financial Policy of the Ministry of Finance.
Shklyaruk, according to information in LinkedIn, since 2016 has served as a member of the board of Agroprosperis Bank and was responsible for the direction of risk management, before that he worked in Credit Agriclole – also in the field of risk management.
Sokolov, according to data in LinkedIn, has worked at Pivdennyi Bank since late 2017, including as head of the corporate business department since April 2020.
Tyutyun, according to information in LinkedIn, since June 2018 was deputy head of the board of the Ukrainian Association of Fintech and Innovation Companies, and previously deputy head of the board of Ukrgasbank.
As reported, the new head of the Board of Sense Bank became Dmitry Kuzmin, who for about half a year time headed a bank with foreign capital Universal Bank before its sale in late 2016 to Serhiy Tihipko’s TAS group. Prior to that, he worked at Raiffeisen Bank Aval and, even earlier, at Citibank, where he was chief accountant for more than a decade. After 2020, he was an independent member of the supervisory board of AS PrivatBank.
As reported, Sense Bank ranks 11th among 65 operating banks in Ukraine in terms of assets (about 3.4% of the assets of the entire banking system). It was nationalized in the last few days under a specially adopted law as a systemically important bank with majority shareholders from Alfa Group caught up in sanctions.
The nationalization of Sense Bank (formerly Alfa Bank), launched on Thursday by the National Bank of Ukraine, will increase the share of state-owned banks in the total assets of the country’s banking system by 3.3 percentage points (p.p.) to about 56%, NBU head Andriy Pyshnyy said.
“This is not a critical indicator,” he said at a briefing on Thursday.
According to Pyshnyy, nationalization of Sense Bank will not be a problem in relations with the International Monetary Fund, which opposes increasing the share of state banks in the market, as the National Bank took such a step in order to ensure financial stability.
The head of the National Bank also said that the question about the possible future sale of Sense Bank should be asked to its future owner – the state represented by the Ministry of Finance.
“Of course, they will have to decide on its further strategy, given that Ukraine has committed to reducing the state’s share in the banking system. We believe that this issue will be relevant, as, in fact, in relation to any other state-owned bank”, – said Pyshnyy.
Last week, Deputy Economy Minister Sergei Sobolev said it was necessary to create a mechanism that would allow nationalized banks to quickly return to the private market in shares or as a whole.
Currently, four state-owned banks – Privat, Oschad, Ukrexim and Ukrgas – are among the top five largest banks in the market in terms of total assets. Their combined market share by this indicator amounted to 52.5% at the beginning of June, and in absolute terms – UAH 1.501 trillion.
In terms of total assets at the beginning of June – UAH 96.64 bln, or 3.4% of the total volume – Sense Bank ranked 11th in the market among 65 operating banks.
ABH Holdings S.A.’s (ABHH) non-binding agreement with an international investor to sell 75.6% of Sense Bank (Kiev, formerly Alfa-Bank) implies a sale price of $1.
“The proposed transaction value in acquiring all 75.6% of Sense Bank is a nominal amount equivalent to $1,” the holding said on its website Monday.
ABHH reiterates that the proposed sale of the Ukrainian bank to an international investor does not include any payments to sanctioned shareholders.
“On April 26, 2022, the Board of Directors of ABHH decided not to declare, pay or provide any dividends, distributions or any other funds to its sanctioned shareholders,” the release states.
According to it, the main purpose of the search for an investor to whom control of Sense Bank could be transferred is to reduce the share of the sanctioned ultimate beneficial owners to a level that would meet the requirements of Ukraine.
ABHH recalls that in the autumn of 2022 a shareholders’ letter was sent to the National Bank of Ukraine stating its willingness to transfer the bank to state ownership free of charge and voluntarily in case of such a decision by the regulators, but since no response to this letter was received, ABHH continued its search for an experienced and reliable investor.
As of the beginning of May this year Sense Bank ranked 10th among 65 operating banks in Ukraine with assets of 97.19 bln hryvnia.
The controlling stake in the bank is owned by sub-sanctioned Russians Andrei Kosogov, Mikhail Fridman and Pyotr Aven, although the minority shareholders in ABH Holdings S.A. are Unicredit S.p.a. – 9.9% and The Mark Foundation for Cancer Research – 3.8736%.
Back in April 2022, the NBU appointed former Bulgarian Finance Minister Simeon Dyankov as a proxy, to whom was given the right to vote on the shares indirectly owned by the sub-sanctioned owners of Sense Bank (a total of 88.2264%), as well as the right to participate in the management of the bank.
At the end of May, the Verkhovna Rada passed a law that envisages nationalization of Sense Bank as a systemic bank on the basis of the presence of subsanctioned persons among its main shareholders. The law was sent to the president for signature on June 5 and has not yet entered into force. According to ABHH, the law implies a complicated nationalization procedure and creates legal risks for future investors, while leaving the bank in private ownership by selling its shares would be a better solution.
According to the agency, the investor is one of Poland’s richest men, Zygmunt Solozh, co-owner of Grupa Polsat Plus corporation. This week, the publication Ekonomika Pravda reported that documents to the National Bank filed Cypriot Karswell Ltd, the nominal owner of 43.75% of the shares of the Polish bank Plus Bank SA.
The NBU in its communications until today did not admit the possibility of agreeing a deal on the sale of the bank.
Alfa-Bank (Ukraine) (Kiev) will change its legal name to Sense Bank JSC starting from December 1 due to abandonment of Alfa brand by the financial institution’s board because of the start of full-scale invasion of Ukraine by Russia, the bank’s press service said.
As noted, customers do not need to re-sign documents, renew contracts, order new certificates of contract status from Alfa Bank and change cards with the logo “Alfa”. All of the above will continue to be valid.
In addition, the details of the contract will remain unchanged.
As noted earlier in an interview with Interfax-Ukraine, former Bulgarian Finance Minister Simeon Dyankov, who in mid-April by agreement with the National Bank was given the right to vote on the majority stake in Alfa-Bank (Ukraine), the board of financial institutions has decided to abandon the brand “Alfa” and continue to work under a new brand. A meeting of shareholders approved the renaming on August 12.
“When the board was deciding on the new brand, the decision became obvious. For the last two years our priority is the development of digital bank Sense SuperApp”, – explained the choice of the new brand the head of the bank Alla Komisarenko.
The National Bank of Ukraine (NBU) approved the renaming on September 24, 2022.
The net loss of the bank in January-July 2022 amounted to UAH 3.52 billion. The financial results were affected by the UAH 8.357 bln allocations to reserves.
According to the NBU, by July 1, 2022, Alfa-Bank (Ukraine) took 7th place by its total assets (112.67 bln hryvnia) among 68 operating banks in the country.
Preparations for the possibility of the practical implementation of the additional capitalization of Alfa-Bank Ukraine by $1 billion by existing shareholders continue, in particular, Mikhail Fridman sent a letter to the regulatory authorities of the Principality of Monaco with a request to authorize a partial unfreezing of funds on his accounts in Monaco for this purpose.
Commenting on the latest information on possible capitalization, Roman Shpek, head of the bank’s supervisory board, told Interfax-Ukraine on Thursday that he himself is currently holding meetings in Brussels to discuss the development of a mechanism for unfreezing, additional capitalization and a system for monitoring the targeted use of funds.
“I believe that the bank will be able to implement the additional capitalization project, and this will be an important mechanism and a precedent for voluntary financing of the restoration of Ukraine,” Shpek said, pointing out that this is a difficult job, but it is being done.
Alfa-Bank Ukraine, according to the NBU, as of September 1, 2022, ranked 7th (UAH 111.16 billion) in terms of total assets among 67 banks operating in the country.
In early June, Bulgarian ex-Minister of Finance Simeon Dyankov, who is a trustee of the National Bank for Fridman’s stakes and other sanctioned shareholders, announced that he was working to obtain regulators’ permission to capitalize the bank using $1 billion in subordinated debt from shareholders’ funds blocked by sanctions. .
At the same time, on October 6, the Verkhovna Rada adopted the law “On the specifics of withdrawing from the market a systemically important bank under martial law,” which implies nationalization without additional capitalization by the state. The document also establishes that the reimbursement of the value of shares to shareholders will be possible only after compensation for damage to the state of Ukraine from the Russian Federation and exclusively at the expense of such funds. According to the definition of the NBU, there are now 14 systemically important banks in the country, however, both deputies and experts point out that we are talking about Alfa-Bank Ukraine.
