Business news from Ukraine


KYIV. Oct 26 (Interfax-Ukraine) – Net interest-bearing income of Raiffeisen Bank Aval (Kyiv) grew by 20.8% in January-September 2015 year-over-year, to UAH 4.271 billion.

The bank said in a quarterly report that its loss totaled UAH 2.064 billion in January-September 2015, which is 50.8% up year-over-year (UAH 1.369 billion).

In Q3 2015, the loss amounted to UAH 71.376 million, which is 80.4% down year-over-year (UAH 365.908 million).

Total assets grew by 12.8%, to UAH 52.639 billion.

Credits and debts of clients decreased by 13.2%, to UAH 25.961 billion.

Reserves for overdue credits reached 85.9% of the total sum of credits and clients’ debts as of early October, while as of early 2015 they were 46.7%.

The charter capital of the bank remained UAH 3.003 billion and net worth fell by 35.4%, to UAH 3.843 billion.

The bank said that the loss was seen due to hryvnia devaluation, the bank also formed additional reserves and revised the currency position. The bank saw loss also due to the stoppage of operation in the Anti-Terrorist Operation (ATO) zone and due to the worsening of the economic situation in Donbas.

However, the operating profit was large.

“These improved results allowed the bank to see total operating profit of UAH 3.3 billion in Q3 2015, which is a clear evidence of the efficiency and proper development of the institution,” the bank said in the report.

Capital adequacy coefficient of the bank is 13.23% with the requirement of at least 10%.

Raiffeisen Bank Aval was founded in 1992. As of late September 2015, Raiffeisen Bank International held 96.5% of shares in the Ukrainian bank.

RBA ranked sixth among 127 banks operating in the country on July 1, 2015 by total assets (UAH 52.414 billion), according to the National Bank of Ukraine.


KYIV. Oct 26 (Interfax-Ukraine) – Public joint-stock company Ukrtelecom saw UAH 493 million in net profit in January-September 2015, while a year ago its loss stood at UAH 21.7 million, Ukrtelecom Head Yuriy Kurmaz said at a meeting with reporters on Friday.

The company’s net revenue over the period grew by 0.7%, to UAH 4.766 billion.

This year revenue from fixed communications continued falling, which reflected the trend of replacing fixed communications services by mobile communications services, Kurmaz said. In Q1-Q3 2015, revenue stood at UAH 2.388 billion, which is 8.1% down year-over-year. The operator serviced 7.2 million subscribers on this market as of late Q3 2015.

Revenue from broadband Internet access services showed growth – a rise of 6.5% year-over-year, to UAH 984 million. As of October 1, 2015, Ukrtelecom serviced over 1.6 million subscribers.

According to the presentation published at the meeting, the revenue structure of the operator over the period was distributed in the following way: UAH 2.733 billion was received from B2C (business-to-consumer), UAH 940 million – B2O (business-to-operator) and UAH 892 million – B2B (business-to- business).

Ukrtelecom paid UAH 1.47 billion to the national budget in the past three quarters.

In October 2013, 100% of UA Тelecominvest Limited which holds 100% in ESU LLC, which in turn, held 92.79% of shares in Ukrtelecom, was bought by Ukrainian businessman Rinat Akhmetov’s SCM holding.


KYIV. Oct 26 (Interfax-Ukraine) – Ukrainian Prime Minister Arseniy Yatseniuk has announced five areas of cooperation with Germany, summing up the Ukrainian-German Economic Forum held in Berlin.

In the TV program “Ten minutes with the prime minister” Yatseniuk said that the key fields of investment in Ukraine for German businesses are transport infrastructure, agriculture, energy, and energy efficiency.

He noted that together with German Chancellor Angela Merkel on October 23 he opened the first powerful conference in the history between Ukrainian and German businesses.

“The German business over the past year and a half has not left Ukraine but, on the contrary, is willing to continue investment in the Ukrainian economy,” Yatseniuk said.

According to him, German business representatives say that Ukraine “has done a lot but more should be done so that German investment come to Ukraine, create new enterprises, new jobs and bring new technologies here.”

The key field of German investment in the Ukrainian economy, according to the premier, is primarily transport infrastructure. He said the government has started negotiations with Germany’s Siemens to upgrade the rolling stock of Ukrainian railways and perform their modernization.


KYIV. Oct 23 (Interfax-Ukraine) – The Cabinet of Ministers has approved the draft law on amendments to some legislative acts concerning copyrightprotection and related rights on the Internet, the Ministry of Economic Development and Trade has announced.

According to the report, the bill will be submitted to the Verkhovna Rada as soon as possible.

The document was previously posted on the ministry’s website for public discussion.

The bill proposes the introduction of penalties in the amount of 500 to 1,000 non-taxable minimum incomes if a website owner’s fails to fulfill the requirements for the removal or prevention of access to information in violation of copyright on the Internet. The same penalty is expected for the failure of the website owner or the hosting provider to give information that identifies the user who posted illegal information. Actions taken under this article are to be punished by a fine of 1,000 to 2,000 untaxed minimum incomes.

At the same time, it is proposed to punish for untrue requirements for limiting access to resources. If the complaint contains false information onthe copyright of a person bringing the complaint, the fine will be 1,000 to 2,000 untaxed minimum incomes. The same penalty may be imposed onpersons for unfair requirements on the resumption of access to information violating copyright or related rights.


KYIV. Oct 23 (Interfax-Ukraine) – Rent rates for high-quality warehouses and logistics premises in Kyiv and its suburbs would not considerablychange by the end of the year, while primary vacancy rate in the segment would remain around 10% due to low developers’ activity and small demand of leasers, according to the survey for Q3 2015 published by DTZ international consulting company in Ukraine.

DTZ said that as of late September 2015, the vacancy rate in the warehouse segment in Kyiv and its suburbs was 12%, which was 6 percentagepoints more year-over-year.

The company said that in January-September 2015, rent rates in the segment almost did not change, and were $3-5 per square meter a month forclass A premises and around $2-3 per square meter a month for class B premises. As of late 2014, the smallest rent rates were $7.5 per square meter a month.

In January-September 2015, around 124,000 square meters of warehouses and logistics premises were leased in Kyiv and its suburbs. This is around 80% of the figure as of late Q3 2014 and 64% down on Q3 2013,” reads the survey.

The company said that supply of modern warehouses in Kyiv and its suburbs totaled around 1.778 million square meters of gross lettable area (GLA) as of late September 2015, including 340,140 square meters of cold-storage warehouses, chemical and pharmaceutical warehouses.

DTZ said in Q4 2015, three warehouse complexes with a total GLA of 38,800 square meters would be commissioned in Kyiv‘s suburbs.

DTZ was founded by Chesshire Gibson, which began operations in Birmingham (Britain) in 1784.


KYIV. Oct 23 (Interfax-Ukraine) – Foreign students inject $504 million a year into the Ukrainian economy, with each of the 63,000 foreign studentsin the country paying on average at least around $2,000 for education every year, Deputy Education and Science Minister of Ukraine Oleh Derevianko said at the 3rd Business and Universities national forum on Thursday.

“Under todays exchange rate, this is around UAH 11 billion, and this is almost the whole sum of the financing of public higher education in Ukraine,” he said.

The deputy minister said that in general, the state provides UAH 16 billion a year to finance higher education.

However, revenue from foreign students could be higher: according to the assessment of the Center for Corporate Social Responsibility (CSR) Development, the number of foreign students in Ukraine in 2013-2014 totaled almost 70,000 or 4.1% of the total number of students (1.724 million).

At the forum organized by the Center for CSR Development the role of partnerships between businesses and universities in developing innovations was discussed at a panel.

Derevianko said that education could be considered as an economic category and a sector that has an export potential. The attraction of a large number of foreign students could bring more funds to the countrys economy directly, not only via the training or development of human capital.

Deputy Finance Minister of Ukraine Oksana Markarova said that the Finance Ministry is ready to promote the development of education. The ministry has started decentralization reform in the sector: the Education and Science Ministry and universities could be more autonomous and responsible for their funds. She said that this would separate good universities from bad ones and would provide financial aid to the former.

Derevianko said that the rapid development of universities would start with the change of their status from budget-funded institutions to profit-making organizations, which would introduce new principles of financing.

He said that the number of universities in the country should be cut to no more than 60-70 educational institutions (today 317) which would focus on research. In addition, the creation of a three-level 12-year high school and the increase of prestige of high occupational education are among the top-priorities. Some UAH 100 million has been allocated to the development of schools.

According to the Center for CSR Development, Ukraine is 74th in terms of cooperation between universities and businesses on research, 29th in the number of scientists and engineers, and 50th in the number of applications under the Patent Cooperation Treaty (PCT) procedure (3.6 applications per million of population). Ukraine is 33rd in the 2015 Bloomberg innovative countries ranking.

Ukraine is 79th in the competitiveness index in 2015-2016 (out of 140 countries), and 64th in the Global Innovation Index (out of 141 countries) in 2015.

Expenses on education in Ukraine totaled 6.7% of the countrys GDP, and expenses on research work – 0.8% of GDP.