The European Bank for Reconstruction and Development (EBRD) plans to provide EUR140 million in guarantee financing to state-owned PrivatBank (Kyiv), which will cover up to 50% of the credit risk on new loans of EUR400 million in equivalent.
According to information on the bank’s website on Thursday, its board of directors intends to consider this project on July 24, 2024.
It is specified that the guarantee funding will be provided to PrivatBank in two equal tranches, each of which will provide partial coverage of risks under new loans worth EUR 200 million, while only one tranche has been agreed upon so far.
The project also provides for a sub-limit of up to EUR 60 million to finance long-term investments by micro, small and medium-sized enterprises (MSMEs) to modernize technologies and equipment in accordance with EU standards, including investments in sustainable and green technologies (70% of the sub-limit), thereby increasing the competitiveness of enterprises.
It is noted that eligible sub-borrowers will also receive EU-funded technical assistance and grant support in the form of investment incentives after the completion of investment projects.
According to the EBRD website, the financing is intended primarily to support Ukrainian companies in primary and secondary agriculture, as well as other critical sectors necessary to ensure the country’s energy security.
“At the same time, priority will be given to MSMEs and corporate borrowers investing in projects that increase energy security and efficiency in Ukraine,” the release says.
As reported, EBRD Vice President Matteo Patrone and PrivatBank CEO Gerhard Bösch signed a letter of intent to start working on a risk-sharing agreement during the Ukraine Recovery Conference in Berlin on June 11-12.
According to the National Bank of Ukraine, as of May 1, 2024, PrivatBank ranked 1st in terms of assets (UAH 857.00 billion) among 63 banks operating in the country. The financial institution’s net profit last year amounted to UAH 37.8 billion. The EBRD notes that the state-owned bank’s network currently includes 1,200 branches across the country, 6,800 ATMs and 1,040 terminals.
State-owned PrivatBank, Oschadbank and Ukreximbank have purchased the largest amount of domestic government bonds since the beginning of Russia’s full-scale invasion and have become market leaders in terms of government bonds with UAH 316 billion, UAH 154.2 billion and UAH 130.5 billion, respectively.
“PrivatBank’s clients mainly invest in hryvnia domestic government bonds (64.5%) and US dollar bonds (33.7%). At the same time, 80% of clients reinvest in securities of the Ministry of Finance when redeeming government bonds,” the financial institution’s press service said.
PrivatBank noted that every third hryvnia of the 1 trillion hryvnia raised in government bonds since the beginning of the full-scale invasion of Russia was invested by the bank or its clients.
In its turn, Oschadbank clarified that UAH 154.23 billion in equivalent of the total portfolio of domestic government bonds, UAH 26.6 billion, was purchased since the beginning of 2024, UAH 65.29 billion in 2023, and UAH 62.34 billion in 2022.
The top three are followed by the state-owned Ukrgasbank, which purchased the equivalent of UAH 89.3 billion of domestic government bonds in the primary market.
Among the top ten banks in the country in terms of assets, FUIB and Sens Bank also published data on investments in domestic government bonds.
Thus, according to the information on FUIB’s website, the amount of investments of more than 2 thousand clients of the bank (both individuals and legal entities) in government bonds since the beginning of the full-scale invasion has reached 1.6 billion in national currency, while foreign currency portfolios amounted to more than $50.5 million and EUR10.5 million, respectively.
The press service of Sens Bank indicates that as of today, the financial institution’s portfolio of government bonds held by individual investors is over UAH 8.1 billion, which “corresponds to about 13% of the total portfolio of government bonds held by individual investors in the country.”
“(…) our bank’s clients, both individuals and business representatives, continue to actively invest in securities. Thus, in April this year alone, our clients purchased government bonds worth UAH 1.87 billion, of which UAH 1.6 billion were military bonds,” the bank noted.
Sens emphasized that clients prefer hryvnia bonds, as the bank’s information shows that in April this year, 53% of consumers preferred them.
Other banks from the “Big Ten” by assets as of April 1 this year – Raiffeisen, Ukrsibbank, Universal Bank (mono) and Credit Agricole – did not publish information on the volume of purchases of government bonds since the beginning of February 24, 2022 on their websites at the time of the publication of this material.
At the same time, Kredobank, the 14th largest bank by assets, reported that its clients have invested more than UAH 3 billion in government bonds since the beginning of the full-scale Russian aggression, and more than 70% of this amount was invested in military bonds.
Kredobank reminded that it was one of the first banks to cancel brokerage fees for the purchase of military bonds after the war started and reduced the minimum investment amount in government securities to UAH 50 thousand.
“The main preferences of Kredobank’s customers for 2024 are short-term, up to 1 year, military government bonds in national and foreign currencies. We also observe that after the maturity of the bonds, more than 50% of customers re-invest their funds, doubling the amount,” said Serhii Kucheriavyi, Director of the Liquidity and Securities Department of the bank.
As reported, the Ministry of Finance managed to lower interest rates by another 0.1-0.27 percentage points (p.p.) at auctions for the placement of domestic government bonds on Tuesday, May 21, bringing the total decrease to 0.92-1.37 p.p. after the National Bank cut the discount rate from 14.5% to 13.5% per annum on April 26.
According to the website of the Ministry of Finance, the cut-off rate for one-year securities decreased from 15.15% to 15.05%, for two-year securities – from 16.2% to 16.08%, and for three-year securities – from 17.2% to 16.93%.
State-owned PrivatBank (Kyiv) will increase to UAH 360 million the financing of the Viliya group of agrarian enterprises to expand production, increase exports, increase the fleet of agricultural machinery and equipment, PrivatBank’s press service said on Thursday.
“The bank has decided to increase the volume of lending to the largest agribusiness in Volyn – the group of companies “Vilia”, which according to Forbes rating this year entered the TOP-20 of the most effective agro-companies in the country. The increase in the volume of financing by the bank up to UAH 360 million will allow the company in 2024 to ensure the acquisition of fixed assets to expand production and export capacity of agricultural products in the region, increase the fleet of agricultural machinery and equipment”, – said a member of the Board of Directors Yevgeniy Zagraev.
According to his information, PrivatBank since the beginning of the war has identified the financing of agro-production as a top priority and has become one of the leaders in terms of lending to agrarians.
“We continue to support agribusiness and today we expand investments in leading modern agribusinesses, such as the enterprises of SC “Vilia”, striking the dynamics of development and modernization of business,” – said Zagraev.
According to PrivatBank, since the beginning of the war SC “Vilia” has increased investments in the construction of a grain terminal, increased the volume of products processing due to the launch of a flour milling complex. During 2024, the company plans to invest more than UAH 1.5 billion in modernization of production and export capacities.
In addition, during the two years of the war “Vilia” increased the fleet of grain trucks by 25%, and the volume of grain storage in elevators – by 20%. In 2025, the agroholding plans to resume the construction of a dairy farm and is considering a project to create the latest pig farms.
The group of companies “Vilia” unites a number of enterprises of Volyn and Rivne regions, which cultivate 42 thousand hectares of land, specialize in crop production, storage of grain, oilseed and legume crops, grain trading, flour and granulated flour production, animal husbandry. Its parent company Volyn-Zerno-Product LLC began operations in 2001. Vilia Group of Companies includes seven elevators in Volyn and Rivne regions, Lutsk Feed Mill LLC, Mlynivsky Feed Mill LLC, a seed factory, a number of warehouses, and its own railroad line. The beneficiary of the company is Yevhen Dudka.
According to the National Bank of Ukraine, as of September 1, 2023, PrivatBank ranked first in terms of assets (UAH 782.31 billion) among 64 banks operating in the country and second in terms of the number of branches in the country (1131).
The amount of income tax and dividends for 2023 that state-owned PrivatBank (Kyiv) transferred to the state budget amounted to almost UAH 50 billion, Yulia Metzger, a member of the bank’s Supervisory Board, said at the International Financial Club BANKIR conference.
“Already in February this year, the Supervisory Board decided that the bank had transferred to the budget an advance payment of dividends and income tax based on the results of the previous year in the amount of almost UAH 50 billion,” she said.
According to the NBU, PrivatBank’s pre-tax profit for 2023 amounted to UAH 72.77 billion, and income tax expenses amounted to UAH 35 billion. According to the government’s decision, 80% (UAH 30.2 billion) of the remaining net profit of UAH 37.76 billion should be used to pay dividends.
As reported, on February 12, Privat transferred the amount of income tax and the first tranche of dividends for 2023 in the amount of UAH 26 billion to the state budget in advance.
PrivatBank is the largest bank in the country, with total assets of UAH 848.64 billion as of March 1, 2024, or 25.9% of the assets of all 63 banks.
State-owned PrivatBank ended 2023 with UAH 37.77 billion in net profit, which is UAH 7.57 billion, or 25%, higher than the financial result of 2022, the financial institution said in a press release on Wednesday.
Pre-tax profit increased 2.1 times, or by UAH 38.09 billion, to UAH 72.77 billion.
According to the release, PrivatBank’s assets last year, after growing by 34.9% in 2022, increased by another 26.6% to UAH 685.1 billion, ensuring its leadership in this indicator in the market.
In 2023, the bank’s net interest income increased by UAH 19.7 billion, or 49.4%, to UAH 59.6 billion, of which UAH 3 billion was due to the favorable interest rate policy of the National Bank of Ukraine (NBU) in 2023,
At the same time, net fee and commission income increased by 20% to UAH 24.4 billion.
“In the context of business growth, operating expenses grew by only 8%, remaining under close management control,” the release said.
According to the state-owned bank, the net portfolio of loans to households in 2023 increased by 39% to more than UAH 60 billion, while the volume of loans to businesses increased by 23% to more than UAH 30 billion.
PrivatBank notes a gradual improvement in the quality of the loan portfolio, which leads to significant savings in provisioning costs. In particular, according to the bank, expenses under this item in 2023 decreased by UAH 11.8 billion compared to 2022.
There has also been an increase in deposits in the state bank of both individuals and enterprises – the volume of deposits increased by 18%, or UAH 85 billion, compared to the level of 2022. According to the state-owned bank, deposits and balances on correspondent accounts of clients reached UAH 550 billion in 2023. According to the submitted materials, Privat has 18.35 million active individual clients and 875 thousand business clients.
It is noted that Privat paid UAH 26.8 billion in income tax to the state budget (including UAH 8.2 billion in prepayments in 2021-2022, together with dividends), while in 2021-2022 the financial institution paid UAH 8.5 billion.
“The majority of the bank’s net profit will be used to pay dividends, i.e. also to the state budget, according to the decision of the shareholder represented by the Ministry of Finance,” the statement emphasizes.
State-owned PrivatBank (Kyiv) offers professional market participants through the OpenMarket platform (SE SETAM) to purchase at a Dutch auction (with a price reduction) the rights to claim a loan portfolio of more than 80 thousand consumer loans at a starting price of UAH 501.4 million.
“This portfolio includes more than 80 thousand unsecured consumer loans granted to individuals, which were recognized as uncollectible and written off against provisions. The portfolio for sale excludes loans for which the debtors are mobilized servicemen – according to information available to PrivatBank,” the press service of the state bank informs.
It is noted that the rights of claim on such a portfolio include only the loan principal and accrued interest.
The sale will be carried out by gradually reducing the starting price of the lot, while the minimum selling price, according to the published terms, is 2.1% of the initial price – UAH 10.53 million.
According to the state bank, only financial institutions that have a valid license to lend money or provide factoring services and meet the bank’s requirements will be allowed to participate in the auction. Applications for participation can be submitted until February 2, and the auction itself will take place on the 23rd of the same month.
According to the National Bank of Ukraine, as of November 1, 2023, PrivatBank ranked 1st in terms of assets (UAH 804.14 billion) among 63 banks operating in the country, and 2nd in terms of the number of branches (1131).
