PrivatBank (Kyiv) has issued the first refinancing loan under the Affordable Loans 5-7-9% program at 0% per annum until the end of March 2021, the Ministry of Economic Development, Trade and Agriculture said on its website on Tuesday, June 9.
“Under the Affordable loans 5-7-9% updated program, state-owned PrivatBank refinanced a loan to an entrepreneur in the amount of UAH 1.1 million at 0% until the end of March 2021. Partner banks continue to accept applications for new program tools, which were introduced by the government during lockdown measures,” the ministry said in the press release.
However, the demand for loans under such conditions amounted to about UAH 390 million over a week, the Economy Ministry said.
Applications for participation in the program from Credit Agricole Bank and Agroprosperis Bank are being considered, the ministry said.
State-owned PrivatBank (Kyiv) plans to receive UAH 17.5 billion in net profit in 2020, which is 47.4% less than in 2019 (UAH 32.6 billion), the financial institution said in its annual statements on the website on Thursday, May 21.
“The management monitors the current situation with the spread of coronavirus [COVID-19] and lockdown and takes measures, if necessary, to minimize any negative consequences as far as possible. Further negative developments and macroeconomic conditions can affect the financial situation and performance of the bank in such a way, which cannot be determined yet,” the bank said in the document.
The bank said in the financial statements that the objectives of PrivatBank for 2021 are the following: to achieve profitability indicator in accordance with its business strategy and to maintain a leading position in the Ukrainian banking market.
However, the bank’s analysts expect that the spread of COVID-19 pandemic, which began in 2020, will lead to a recession in the global economy and a significant slowdown in economic activity in the country.
They believe that the introduction of lockdown restrictions by the government in March, combined with a significant reduction in global demand and an overestimation of the risks of developing countries by investors, may affect the performance of Ukraine’s economy and foreign trade, as well as complicate fundraising, affect the country’s banking system and lead to further devaluation of the national currency.
On Wednesday, May 13, Visa Token Service added 28 new international partners to enhance the security of digital payments, including Portmone payment system and state-owned PrivatBank.
“These new partners will contribute to make digital transactions safer using tokens of both one-time and recurring payments based on Visa accounting data. Tokenization replaces the 16-digit Visa cardholder account number with a token, which just Visa can unlock, protecting the main card number from defrauders,” Business Wire said.
State-owned PrivatBank intends to involve an adviser in the preparation and sale of the financial institution’s shares in Bukovel, the largest ski resort in Ukraine, Deputy Head of PrivatBank Halyna Pakhachuk has said. “The bank owns two-thirds of the complex, which consists of 64 facilities, one-third is Skorzonera LLC,” she said.
Pakhachuk reported that this list of objects is not an integral property complex; in addition to the hotel, it includes 104 hectares of land and part of the lifts.
According to the deputy head of PrivatBank, when these objects were initially put on the bank’s balance sheet, their value was estimated at UAH 12.6 billion, including the Radisson Blu Bukovel hotel (Zirka Bukovelia) at UAH 1.62 billion, but their real market value differs from these indicators.
Pakhachuk also said that in recent years the bank has been renting its facilities in Bukovel to the Parktur LLC resort operator (Polianytsia, Yaremche, Ivano-Frankivsk region). In 2019, the rent amounted to UAH 110.5 million, including UAH 47.5 million per hotel, and in 2020 it will increase to UAH 117.5 million, including UAH 50.5 million per hotel.
The deputy head of the bank reminded that these facilities are non-core for the financial institution, and according to the standards introduced by the National Bank in the future, they will have to be taken into account at zero cost.
Radisson Blu Bukovel hotel increased its net income by 9.1%, to UAH 221 million, and the net loss decreased by 36.7%, to UAH 39.33 million in 2018. According to the state register, the beneficiaries of this enterprise are former owners of PrivatBank Ihor Kolomoisky and Hennadiy Boholiubov.
The revenue of Parktur LLC increased by 71.9%, to UAH 425.35 million, net profit increased by 6.2 times, to UAH 86.14 million in 2018, the owner is Vitaliy Kovalchuk, registered in Kolomyia (Ivano-Frankivsk region).
From February 14, state-owned PrivatBank (Kyiv) has cut basic interest rates for all programs for financing entrepreneurs and small businesses by 2-3 percentage points (p.p.), according to the bank’s press release issued on February 17.
The press service of the bank told Interfax-Ukraine that the interest rate under the KUB (Country of Successful Business) program was cut by 2 p.p. to 18% per annum, rates on the Entrepreneurial and the Credit Line on the Account credit lines – by 3 p.p. to 27% and 18%, respectively.
In addition, rates on business mortgage were cut by 3 p.p. (to 16% per annum), on loans secured by deposits (to 13% per annum) and on investment credits (to 16% per annum).
The rates were cut by 3 p.p. to 16% per annum on the Agroseason credit line and on loans for the purchase of agricultural equipment under state programs.
As reported, PrivatBank plans to allocate at least UAH 10 billion for financing programs for Ukrainian entrepreneurs in 2020.
On December 18, 2016, the government of Ukraine, referring to the proposal of the National Bank of Ukraine (NBU) and the former shareholders of PrivatBank, decided to nationalize the largest financial institution on the Ukrainian market and pumped more than UAH 155 billion into its capital.
PrivatBank ranked first among 75 banks in terms of total assets (UAH 552.058 billion) on January 1, 2020, according to the NBU
