State-owned Ukreximbank (Kyiv) is considering a scenario to repurchase its eurobonds from the market with their replacement with cheaper and longer-term resources, chairman of the financial institution Yevhen Metsger has said.
“As one of the working scenarios, the repurchase of our eurobonds from the market is considered, the rate at which is about 10% in dollars, and replacing them with cheaper and longer-term resources from the International Monetary Fund, he said.
In addition, Metsger said that the bank is holding a dialogue on additional capitalization with the Finance Ministry as a representative of the owner and with the National Bank of Ukraine (NBU).
“Formally, the management will first discuss the situation and forecast of activities with the supervisory board, then ask it to apply for additional capitalization to the government. For the entire cycle, we assume that it will take us time until the end of the second quarter,” he said.
The chairman of the board of Ukreximbank said that the bank needs additional capital to enable it to develop.
He said that without additional capital, the bank will also not be able to provide the necessary support during a pandemic to a number of clients and key sectors of the economy.
“To rely on itself, make a profit, then invest it in net worth is a long way to go, given that the bank’s financial results for 2019 do not allow to reinvest profits in capital. Our former management declared over UAH 600 million of income. However, in reality, I am afraid that we will get a much more modest figure,” the banker said.
According to him, the bank now has quite negative dynamics in operating income, resulting in, there is no way to quickly accumulate financial results to cover one-time effects, and it will take time for the new management team to reproduce the working business model and reverse the trend.