State-owned Oschadbank (Kyiv), with financial support from the German government, is implementing the second phase of the project “Access to finance and sustainability support for MSMEs in Ukraine II”, which will finance more than 500 enterprises for EUR4.2 million, the bank’s press service said on Friday.
“German Sparkassenstiftung for International Cooperation is honored to have the opportunity to continue its support for Ukrainian businesses, which is very important for the development of the Ukrainian economy, especially during the difficult economic circumstances caused by the war. … Thanks to the second phase of the Project, more than 500 more companies will be able to receive financial support for the realization of their own business ideas,” said Eduard Schmitt, head of the representative office of the federal company Deutsche Gesellschaft für Internationale Zusammenarbeit (DSIK).
According to the state bank, under the project, internally displaced enterprises and businesses from the de-occupied territories will be able to receive compensation in the amount of 30% of the cost of the investment project, but not more than EUR30 thousand in hryvnia equivalent.
“For all other enterprises, the maximum amount of grant support is 20%, but not more than EUR20 thousand in hryvnia equivalent,” the report says.
According to the terms of the program, the participants can be enterprises with a positive credit history, with up to 250 employees and annual income up to EUR10 million, which have not received international technical assistance since February 1, 2022 and do not have debts to the state budget. Applications for participation are accepted in the branches of Oschad until January 31, 2024.
The press service recalled that the state Bank had a successful experience in the implementation of the first phase of the project during 2023.
“According to its results, the Bank’s clients received approval of grants from the German government for a total amount of more than UAH 52 million. According to this indicator, Oschad ranks first among all participants of the program. More than 62% of grantees are registered and carry out their activities in war-affected areas or in de-occupied territories”, – stated in the release of the financial institution.
It is specified that this project is implemented by Oschadbank within the framework of the international cooperation project ReACT4UA (“Application and Implementation of the Association Agreement between the European Union and Ukraine in the field of trade”) to provide grant support to MSME enterprises involved in economically important business areas for Ukraine: agriculture, food supply and processing, textile industry, processing industry, etc.
The project is financed by the German authorities and implemented by the German federal company Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH in cooperation with Deutsche Sparkassenstiftung für international Kooperation (DSIK) and the Entrepreneurship Development Fund (EDF).
According to the National Bank of Ukraine, as of November 1, 2023, Oschadbank ranked 2nd in terms of assets (UAH 346.85 billion) among 63 banks operating in the country and 1st second in terms of the number of branches (1182).
Access to finance and sustainability support for MSMEs in Ukraine II, OSCHADBANK, upport from the German government
Astarta Agroholding, Ukraine’s largest sugar producer, has raised up to $60m in a loan from state-owned Oschadbank for the construction of a soybean processing plant in the Poltava region.
“The raised funds will be used to finance an investment project to build a new soybean processing plant in Globino (Poltava region) to produce soy protein concentrate,” the company said on its website on Tuesday.
It is specified that the credit limit of $60 mln is granted to the agricultural holding for seven years.
As reported, the director of business development and investor relations of the group of companies Julia Bereshchenko at the conference-call with investors and analysts on the results of the company’s work for the first nine months of 2023 informed that investments for the construction of the plant will be distributed for three years – the current and two subsequent years. “Astarta intends to finance the project primarily through free cash flow. The Globino plant is expected to produce up to 100,000 tons of concentrated soy protein per year.
“Astarta” announced the start of construction of this line in mid-September 2021. The GPP itself was commissioned in early 2014, with a design processing capacity of 230 thousand tons per year. The plant is capable of producing about 160,000 tons of high-protein soybean meal, 40,000 tons of soybean oil and 9,000 tons of pelletized shell annually. The plant also includes finished product storage facilities and a 42,000-ton elevator and the necessary utilities, roads and railroads. Before the war, more than 80% of the GPP’s production was supplied to the EU, Middle and Far East countries. The main part of soybeans for processing is grown by agrofirms of the agroholding.
In the fall of 2021, Bereshchenko pointed out that the construction of an additional soybean deep processing line at GPP will double EBITDA in the soybean segment, as well as increase revenue.
“Astarta is a vertically integrated agro-industrial holding company operating in eight regions of Ukraine. It includes six sugar mills, agricultural farms with a land bank of 220,000 hectares and dairy farms with 22,000 cattle, an oil extraction plant in Globino (Poltava region), seven elevators and a biogas complex.
The agroholding earned EUR1.24 mln of net profit in the third quarter of 2023, which is 27.7 times less than in the same period of 2022. Astarta’s revenue decreased by 14.4% to EUR104.75m, gross profit decreased by 2.7 times to EUR26.96m, operating profit decreased by 7.6 times to EUR6.79m, and EBITDA decreased by 42.7% to EUR97.25m.
Thanks to a significantly better performance in the first half of this year compared to the first half of last year, for the first nine months of 2023 as a whole, net profit decreased by 9.8% to EUR55.97m on revenue growth of 14.8% to EUR392.00m. The company’s gross profit increased by 3.0% to EUR151.91m, while operating profit decreased by 15.9% to EUR79.91m and EBITDA by 10.8% to EUR116.63m.
Volodymyr Lavrenchuk, Head of the Ukrainian office of NEQSOL Holding, who headed Ukraine’s largest foreign bank, Raiffeisen Bank, in 2005-2019, has become the head of the Supervisory Board of state-owned Oschadbank (Kyiv), where he became an independent member in July this year following a government decision three months earlier.
“The renewed Supervisory Board of Oschadbank has started its work. At its first meeting, it elected Volodymyr Lavrenchuk as chairman,” the bank said in a statement on Tuesday.
It is specified that Lavrenchuk has 36 years of experience in the banking sector, including 27 years in the top management of Oschadbank and Raiffeisen Bank, and since 2020 he has been the head of the Ukrainian office of NEQSOL Holding with a focus on investment and portfolio management and a member of the Supervisory Board of Vodafone Ukraine.
According to the release, Lavrenchuk also chaired the Nomination and Remuneration Committee, while the Risk and Compliance Committee was chaired by independent Supervisory Board member Elizabeth Nelson, who was Vice President of Risk Management and Compliance, Chief Risk Officer at the European Bank for Reconstruction and Development in 2012-2019.
Her colleague Juan Enrique Pérez Calota chaired the Audit Committee, while Oleksandr Rodnyansky, a member of the Supervisory Board and representative of the President of Ukraine, became the chairman of the Strategy and Transformation Committee.
Oschad reminded that as a result of the renewal of the Supervisory Board’s composition among independent members provided for by the current legislation, four financial market experts – Michal Krupinski, Lavrenchuk, Nelson and Philip Heasley – joined the Supervisory Board, while Perez Kalota and Anton Pyatigin retained their seats on the Supervisory Board.
In addition, the Supervisory Board also includes three government representatives – Yulia Pashko from the Verkhovna Rada Committee, Rosa Tapanova from the Cabinet of Ministers, and Rodnyansky from the President of Ukraine.
According to the National Bank of Ukraine, as of September 1, 2023, Oschadbank ranked second in terms of total assets (UAH 337.99 billion) among the 64 operating banks in the country and first in terms of the number of branches – 1182.
The net profit of the state-owned Oschadbank (Kyiv) in January-September 2023 amounted to UAH 14.18 billion, which is 6 times higher than the same period in 2022, according to the bank’s interim condensed report for the third quarter.
According to the report, the state-owned bank’s net profit for the third quarter amounted to UAH 7.34 billion, which is UAH 3.04 billion more than in the second quarter of this year and UAH 0.56 billion more than in the third quarter of last year.
According to the report, Oschadbank’s net interest income increased by 32.2% year-on-year to UAH 13.89 billion in January-September 2023, including a 24.4% increase to UAH 4.95 billion in the third quarter, which is UAH 0.75 billion more than in the second quarter of this year.
Net fee and commission income for the first nine months of this year increased by 24.8% to UAH 5.07 billion, including 0.3% to UAH 1.75 billion in Q3. Meanwhile, in April-June this year, this figure was equal to UAH 1.65 billion.
A significant contribution to the improvement of the bank’s financial result was made by the dissolution of provisions for expected credit losses on assets: for the first 9 months of this year, it amounted to UAH 1.4 billion, including UAH 0.16 billion in the third quarter, while for the same period last year, Oschadbank formed additional provisions of UAH 9.61 billion and UAH 4.20 billion, respectively.
The state-owned bank also reports that its total profit for January-September this year reached UAH 14.23 billion, 6.7 times higher than in the comparable period of 2022. In the third quarter of 2023, total profit increased by 9.2% compared to the third quarter of last year and by 69.1% compared to the second quarter of this year.
According to the report, in 9M2023, the bank’s assets increased by 16.9%, reaching UAH 314.78 billion by September 30. This growth is attributed to the increase in cash, correspondent accounts and funds with the NBU from UAH 28.36 billion to UAH 62.56 billion. In addition, according to the report, the volume of investments increased by UAH 10.07 billion to UAH 153.45 billion.
As for loans to customers, they grew by 3.1% to UAH 83.03 billion in the third quarter, but still remain below the figure of UAH 83.22 billion in July-September last year. Of this amount, UAH 62.07 billion was granted to corporate entities, UAH 7.54 billion to government and local authorities, and UAH 4.55 billion in mortgage loans.
Over the first nine months of 2023, Oschadbank’s customer accounts increased from UAH 233.94 billion to UAH 268.89 billion, while banks’ accounts decreased from UAH 0.54 billion to UAH 0.24 billion.
The equity of the financial institution increased by UAH 14.04 billion to UAH 36.2 billion in the first nine months of this year.
According to the National Bank of Ukraine, as of September 1, 2023, Oschadbank ranked second in terms of total assets (UAH 337.99 billion) among 64 operating banks in the country and first in terms of the number of branches – 1182.
The number of structural units of Ukrainian banks in the third quarter of 2023 decreased by another 55 to 5,098 due to the closure of branches of the liquidated Concordbank and Ukrbudinvestbank, according to information published on the NBU website.
According to the information, the second largest state-owned Oschadbank by assets in the third quarter reduced the number of branches by one to 1182, retaining its first place among all banks in the country by this indicator.
PrivatBank, the largest bank by assets, kept the number of branches at the same level in July-September – 1131.
Raiffeisen Bank rounds out the top three, adding five branches to its 324 operating branches, becoming the leader in terms of branch growth in the third quarter of this year, while at the beginning of the year its network shrank by 27 branches to 323.
The fourth-ranked Ukrsibbank significantly reduced its network in July-September, from 230 to 222, and now FUIB, which closes the top five and whose network remained the same in the reporting period, is only one point behind it.
Two other banks have more than 200 branches: Ukrgasbank (218, minus one for the quarter) and A-Bank (202, no changes).
Sense Bank, which was nationalized in July, reduced its network by two branches to 138, making it one of the top ten banks with the largest networks in the market, followed by Accordbank (147) and Credit Agricole Bank (141).
OTP Bank (down to 71), Metabank (down to 25) and Piraeus Bank (down to 13) each had one less branch.
At the same time, RadaBank opened three branches in July-September and increased its network to 28 outlets, while Asvio Bank opened two outlets and its network reached 30 branches across the country.
TAScombank, Cominbank, MTB Bank, RBC Bank and Unex Bank each opened one outlet in the third quarter, expanding their networks to 94, 54, 43, 21 and 19 outlets, respectively.
In general, the rate of decline in the number of bank branches in the third quarter of this year accelerated to 1.1% from 0.8%, which is, however, lower than the 2.7% in the first quarter, as in the fourth quarter of last year it was 3.3%, in the third quarter – 7.9% and in the second quarter – 8.1%.
In February of this year, the National Bank proposed to the Ministry of Finance, as the owner of state-owned banks, to impose a moratorium on the reduction of their branch network during the war.
According to the updated data, since the beginning of 2022, the number of branches has decreased by 420 at Oschadbank, 366 at PrivatBank, 50 at Ukrgasbank, and 5 at Ukreximbank, to 48.
As of the beginning of October 2023, state-owned banks accounted for 53.3% of all bank branches in Ukraine.
As reported, the number of structural units of Ukrainian banks in 2022 decreased by 20.2%, or by 1349 branches, to 5,336 thousand.
State-owned Oschadbank quadrupled its net profit in January-August this year compared to the same period in 2022 – from UAH 2.3 billion to more than UAH 9.4 billion, including a net profit of UAH 1.2 billion in August.
“The final financial result was also affected by the revaluation of financial instruments in the securities portfolio: it added about UAH 1.5 billion to the total profit,” the press service of the financial institution told Interfax-Ukraine on Monday.
The state-owned bank notes an improvement in all key financial indicators. In particular, its net interest income increased by 39% to UAH 12.1 billion compared to the figures for 8 months of 2022, and net commission income by 30% to UAH 4.4 billion.
Operating profit amounted to UAH 7.8 billion, which is more than twice as much as in the same period last year.
In addition, as noted in the press service, Oschad has sufficient liquidity and capital at its disposal.
According to the information provided, the regulatory capital adequacy ratio of the financial institution as of September 1 this year amounted to 18.48%, while the established standard of the National Bank of Ukraine (NBU) is 10%.
At the same time, the bank has so far refrained from forecasting its financial results for this year.
According to the NBU, as of July 1, 2023, Oschadbank ranked 2nd in terms of assets (UAH 324.74 billion) among 64 banks operating in the country, and first in terms of the number of branches in the country (1183).
