The National Bank of Ukraine (NBU) has applied a measure of influence in the form of temporary suspension of licenses to non-life insurer “European Insurance Group” (EIG, Kharkiv) in connection with non-submission of reports since the end of last year.
As reported by the central bank on Tuesday, the Committee for Supervision and Regulation of Non-banking Financial Services Markets has set a deadline for the insurer to eliminate violations until September 26, 2023.
According to the National Bank, for the first nine months of 2022, the insurer received 2542.2 thousand UAH of insurance premiums and made 39.4 thousand UAH of insurance payments, while the company’s market share for the period amounted to 0.01%.
As reported, on October 8, 2021 the NBU has agreed to Ivan Volkov indirect ownership of 99,998% of shares of ALC “European Insurance Group”. Earlier, on July 6, 2021, a trustee was appointed to this company to manage 99.998% of the insurer’s shares, the ownership of which was indirectly through LLC “Victori-21”.
UGG was registered by the National Commission for Financial Services in August 2016. The authorized capital of the company amounts to UAH 30 mln.
On September 7, the National Bank of Ukraine (NBU) revoked the licenses of Gestalt Group Insurance Company and INTO Insurance Company (both based in Kyiv) to conduct financial services business.
According to the regulator’s website, the decision was made with respect to Gestalt Group due to the fact that the insurer’s ownership structure does not meet the requirements of Ukrainian legislation, and with respect to INTO for failure to comply with the National Bank’s decisions to eliminate violations of license conditions.
According to the latest financial statements submitted by Gestalt Group Insurance Company, as of June 30, 2023, the company’s insurance premiums amounted to UAH 5,971 million, assets amounted to UAH 81,642 million, and insurance reserves amounted to UAH 1,952 million. The company’s market share in terms of insurance premiums amounted to 0.03%.
According to the latest reports submitted by INTO Insurance Company, the volume of insurance premiums amounted to UAH 28.767 million, the value of assets – UAH 139.178 million, insurance reserves – UAH 18.028 million. The company’s market share in terms of insurance premiums amounted to -0.2%.
The NBU emphasizes that the decisions come into force on September 8. In the event of license revocation, a financial services representative must fulfill its obligations under contracts with clients for the type of financial services specified in the decision, concluded before the date of entry into force of the decision to revoke the license.
The National Bank of Ukraine (NBU) has categorized Ukrainian Construction and Investment Bank (Ukrbudinvestbank, Kyiv) as insolvent due to the lack of effective measures to improve its financial situation, the regulator said on its website.
“Since Ukrbudinvestbank was classified as a problem bank on August 4, its financial position has deteriorated significantly, and the management and owners of significant participation have not taken appropriate measures to prevent insolvency,” the NBU said.
He specified that the reason for recognizing the bank as a problem was its failure to comply with the National Bank’s decision to restrict certain types of transactions without reasonable cause.
The regulator noted that the share of the financial institution amounted to 0.04% of the assets of the country’s solvent banks as of September 1, 2023, so its classification as insolvent does not affect the stability of the Ukrainian banking sector.
The NBU reminded that during the martial law, each depositor of Ukrbudinvestbank will receive compensation from the Deposit Guarantee Fund in the full amount of the deposit, including interest accrued as of the end of the day preceding the day of the start of the bank’s withdrawal from the market. As of September 1, 2023, the total possible amount of guaranteed repayments to depositors of this financial institution was UAH 606 million, the press release said.
It is specified that Ukrbudinvestbank is classified as insolvent in accordance with the decision of the NBU Board of September 7, No. 310-rsh/BT.
Ukrbudinvestbank was founded in 2004. According to the NBU, as of July 1, 2023, it ranked 45th among 65 operating Ukrainian banks in terms of total assets (UAH 2.47 billion). Its net profit for the first half of this year amounted to UAH 19.07 million.
According to the financial institution’s website, its largest shareholders are Svetlana Demyanenko (74.93%), Yulia Podgornits and Lyudmila Minevich (9.90% each), and Natalia Shishova (5.27%).
At the end of July this year, Vadym Kachurovsky, who had held the position for almost 11 years, resigned as chairman of the board of Ukrbudinvestbank. His deputy, Natalia Vorobey, was appointed interim CEO until August 2.
The National Bank of Ukraine (NBU) has revoked the licenses of Financial Company No. 1 LLC, which ranked 97th in terms of market revenue in the first half of this year.
“The said financial company does not comply with the legal requirements for maintaining the minimum amount of equity capital. This negatively affects its real and potential financial capabilities, in particular, the level of liquidity, solvency, financial stability, and working capital (equity),” the regulator explained its actions on its website.
According to the NBU, the decision was made by the Committee for Supervision and Regulation of Non-Banking Financial Services Markets on August 28 and came into force on August 29.
According to the NBU, Financial Company No. 1 finished the first half of this year with revenues of UAH 14.9 million and a net loss of UAH 7.96 million.
In terms of labor costs (UAH 1.23 million), FC “No. 1” was 87th in the market in the first half of the year, and 403rd in terms of assets (UAH 15.1 million).
According to OpenDataBot, Financial Company No. 1 LLC was founded in August 2013 by Andriy Stepanenko, co-owner of four IT-related companies (IT Nonstop, Finayti, IT Finance, 24. IT) with a registered capital of UAH 8 million.
On August 23, the National Bank of Ukraine (NBU) fined Kashtan Insurance Company (Kyiv) UAH 34 thousand for providing the regulator with knowingly false information, according to the regulator’s website.
The insurance company must pay the fine within seven business days from the date of receipt of the NBU’s decision to impose the fine.
Kashtan Insurance Company was registered in June 2002. It offers clients insurance services in 20 types of voluntary and compulsory insurance.
As reported, on August 17, 2021, the NBU revoked the license of Kashtan Insurance Company to provide compulsory insurance of civil liability of owners of land vehicles at the request of the company.
The National Bank of Ukraine’s net profit in the second quarter of this year amounted to UAH 17.59 billion, up 22.2% year-on-year, according to the NBU’s report on its website.
According to the report, net interest income almost halved to UAH 10.53 billion from UAH 20.70 billion, but UAH 7.69 billion of profit from transactions with financial instruments at fair value, compared to UAH 4.26 billion of loss in the second quarter of last year, improved the financial result overall.
In the first half of the year, the NBU’s net profit amounted to UAH 43.28 billion, down 37.9% compared to the first half of last year, when this result was largely due to UAH 48.82 billion of profit from operations with financial assets and liabilities in foreign currency and gold, compared to UAH 7.74 billion in the first half of this year.
According to the NBU, its consolidated assets increased by 17.1% to UAH 2.293 trillion in January-June this year. “The change in the volume of assets is primarily the result of a 37% increase in international reserves – to $39.0 billion at the end of the first half of 2023 from $28.5 billion at the end of 2022,” the central bank explained.
He specified that the volume of non-resident securities in its portfolio in the first half of 2023 increased by 23% to UAH 858.5 billion, and the volume of funds and deposits in foreign currency and precious metals almost doubled to UAH 464.4 billion.
At the same time, the lion’s share – almost 98% – of non-resident securities is denominated in US dollars, including 92.8% of US issuers, while at the beginning of the year these figures were 95.3% and 84.0%, respectively.
During the reporting period, the NBU, in particular, got rid of securities denominated in euros, which amounted to 1.5% of the portfolio at the beginning of the year.
At the same time, the NBU notes that the volume of its loan portfolio decreased by 4.7 times to UAH 8.6 billion due to the repayment of long-term debt on operating loans by banks.
As of the end of the first half of 2023, the NBU’s liabilities amounted to UAH 1.921 trillion (83.8% of assets), up 17.8% over the half-year.
In particular, banks’ funds increased by 2.3 times to UAH 203.8 billion, funds of state and other institutions increased almost sixfold to UAH 311 billion, while liabilities on loans received from the IMF decreased by 21.5%, and in August the NBU repaid another SDR98.5 million.
As a result, the NBU’s equity increased by 13% to UAH 371 billion in the first half of 2023, due to the accumulation of this year’s profit.
The NBU indicated that its expenses related to the production of banknotes, coins and other products, administrative expenses, and staff costs in the first half of 2023 remained at the same level as in the corresponding period of 2022 and amounted to UAH 3 billion.
In particular, staff salaries decreased by 7.7% year-on-year to UAH 1.227 billion in the first half of this year, including an 8.9% decrease to UAH 612 million in the second quarter.
At the same time, payments to the management increased by 11.1% to UAH 36.01 million, including 10.5% to UAH 13.54 million for members of the NBU Council.
