Business news from Ukraine

SEVENTH PACKAGE OF EU SANCTIONS WILL INCLUDE RUSSIAN GAS AND BANKS – HEAD OF OFFICE OF PRESIDENT YERMAK

The seventh package of EU sanctions will include Russian gas and an expanded list of banks, head of the Office of the President of Ukraine Andriy Yermak said.
“The seventh package of sanctions against Russia is our priority. The EU has already begun work on it. New restrictions should apply to Russian gas and expand the list of banks that will be disconnected from SWIFT, in particular, Gazprombank,” he wrote on his Telegram channel. on Saturday evening with reference to the Deputy Foreign Minister of Poland, Pavel Yablonsky.

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UKRAINIAN BANKS PROVIDE UAH 5.43 BLN TO FARMERS FOR SOWING CAMPAIGN DURING WAR

For the period from mid-March to April 13, Ukrainian banking institutions provided loans to farmers under the state program to support the sowing campaign-2022 for a total of UAH 5.43 billion, including loans and portfolio guarantees for the week of March 6-13. UAH 3.64 billion
The relevant data on the financing of the sowing campaign in the context of the Russian military invasion of Ukraine was published on the website of the Ministry of Agrarian Policy and Food of Ukraine on Thursday.
“In fact, over a week, loans were issued for more than UAH 3.6 billion for more than a thousand farmers. Banks took a rather fast pace to cover the needs of our agricultural producers, who are now undergoing a sowing campaign. Today, agricultural loans can be issued by 22 Bank, and the goal of the state is to increase lending to the agricultural sector up to UAH 40 billion, that is, almost eight times more,” the department quotes its head, Mykola Solsky.
It is specified that 80% (UAH 4.41 billion) of the provided borrowed funds were portfolio guarantees, while 2.08 thousand agricultural producers received access to financing in total (1.18 thousand in the last week).
Most of the loans for the sowing campaign were attracted by the agrarians of Kirovohrad region – UAH 1.81 billion (+UAH 1.4 billion for the week), Vinnitsa region – UAH 944 million (+UAH 579 million), Dnepropetrovsk region – UAH 738 million (+UAH 471 million), Odesa – UAH 549 million (+UAH 388 million) and Lviv – UAH 348 million (+UAH 189 million) regions.
According to the Ministry of Agrarian Policy, loans up to UAH 60 million under this program are issued at 0% per annum (under the state financial support program “Affordable loans 5-7-9%”). The term of such lending is up to six months, and after its completion, the interest rate for borrowers will be 5% per annum. Agrarians falling under the definition of an agricultural producer can use the loan.
“Ukraine understands its defining role as a guarantor of the food security of the world, so we must harvest to feed ourselves, and also prevent food shortages and hunger in the world,” Solsky summed up in the message of the Ministry of Agrarian Policy.
The agency recalled that the government program to support the sowing campaign is being implemented by the Cabinet of Ministers, the Ministry of Agrarian Policy, the Ministry of Finance, the Ministry of Economy, the National Bank and the banking sector.
As reported, at the end of March, the Cabinet of Ministers of Ukraine expanded the procedure for issuing guarantees for agricultural producers on loans on a portfolio basis for the purchase of the resources they need for the sowing campaign in 2022, since due to the Russian military invasion of Ukraine, part of the farmers lost working capital for carrying out spring work.
Thus, within the framework of portfolio lending to agricultural producers, they will be able to obtain loans for the purchase of fertilizers, plant protection products, pesticides and agrochemicals, fuel, spare parts for agricultural equipment, as well as for replenishment of fixed assets and intangible assets, wages, rent of real estate and movable property, works and services for its operations.
The total budget of this program to support the 2022 sowing season is UAH 50 billion.

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PRESIDENT OF UKRAINE: STATE MUST GUARANTEE 100% OF DEPOSITS IN BANKS

President of Ukraine Volodymyr Zelensky said that he instructed the National Bank, deputies and officials to find an opportunity to guarantee 100% of deposits of Ukrainians in banks.
“This is a special task for the National Bank of Ukraine, for people’s deputies and our officials. I instructed to find such a legislative opportunity that the state would guarantee 100% of deposits in banks. 100%. Not part, as it is now, as usual, but in full. The entire deposit. In any bank of our state. So that people do not lose money and are not afraid of it under any circumstances. So I am waiting for specifics. A draft decision. And I hope that the Verkhovna Rada will not be slow in providing support. Because Ukrainians need it. Ukraine needs it,” he said in a video message on the night of Thursday.
In addition, according to him, “the Cabinet of Ministers will vote tomorrow for a large-scale reduction in regulations.”
“There were more than 600 permits and licenses for business, and about 20 remain mandatory. Only those that simply cannot be cancelled. Like, for example, the management of radioactive waste,” Zelensky said.
According to him, the government has already prepared a decision to expand the lending program for entrepreneurs on the basis of the Affordable Loans 5-7-9% program.
“Any business will be able to get a loan at 0% during martial law plus one month after the war. Then there will be a minimum rate of 5%. And the total amount of the loan can be up to UAH 60 million. To widen the circle of those businesses that can use our program “, the president said.

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NATIONAL BANK OF UKRAINE DECIDES TO LIQUIDATE ONE MORE BANK

The National Bank of Ukraine (NBU) on September 9 made a decision to revoke the banking license and liquidate Bank Zemelny Capital (Dnipro) belonged to former Coal Industry Minister Viktor Topolov (94.4% of shares), the regulator has said on its website.
“At the suggestion of the Deposit Guarantee Fund, the NBU made decision No. 469-rsh dated September 9, 2021 to revoke the banking license and liquidate Bank Zemelny Capital,” the NBU said.
As reported, the NBU on August 11 classified Bank Zemelny Capital as insolvent due to the failure to meet its obligations to depositors and other creditors due to insufficient funds within the term established by the agreement or determined by the legislation of Ukraine.
Bank Zemelny Capital was founded in 1994. According to the NBU data as of January 1, 2021, the owner of the bank’s substantial participation is former Minister of the Coal Industry Viktor Topolov (94.4% of the shares).
According to the NBU, as of June 1, 2021, Bank Zemelny Capital ranked 63rd in terms of total assets (UAH 909.983 million) among 73 banks operating in the country.

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6 UKRAINIAN BANKS VIOLATE REQUIREMENTS

The single counterparty exposure limit (H7, shall be no more than 25%) as of August 1, was violated by Prominvestbank (96.59%) and Industrialbank (46.75%), according to the website of the National Bank of Ukraine (NBU).
According to the regulator, the related party transactions exposure limit (H9, shall not exceed 25%) was violated by First Investment Bank (36.3%).
The limit on bank total long open FX position (L13-1, shall be no more than 10%) was violated by Oschadbank (140.725%), Prominvestbank (128.25%), PrivatBank (85.83%) and Industrialbank (18.65%).
The limit on bank total short open FX position (L13-2, shall be no more than 10%) was violated by Prominvestbank (137.27%).
The newly introduced net stable funding ratio (NSFR, shall be more than 80%) was violated by Prominvestbank (27.43%).
Bank Zemelny Capital violated six standards, namely: minimum regulatory capital H1 (UAH 102.942 million, shall be at least UAH 200 million), short-term liquidity ratio H6 (48.71%, shall be more than 60%), N7 standard (37.27%, shall be no more than 25%), the related party transactions exposure limit H9 (30.11%, shall not exceed 25%), the liquidity coverage ratio LCR for all currencies (15.31%, shall be at least 100%), as well as net stable funding ratio NSFR (69.8%, shall be more than 80%).

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NATIONAL BANK DECLARES BANK ZEMELNY KAPITAL INSOLVENT

The National Bank of Ukraine (NBU) has declared insolvent Bank Zemelny Kapital (Land Capital, Dnipro) of former Minister of the Coal Industry Viktor Topolov (94.4% of shares), which as of June 1, 2021 ranked 63rd in terms of total assets (UAH 909.983 million) among 73 banks operating in the country, the press service of the central bank said.
The corresponding decision was approved by NBU decree No. 400-RSh/BT dated August 11, 2021.
“The board of the NBU decided to declare Bank Zemelny Kapital insolvent due to failure to fulfill its obligations to depositors and other creditors because of insufficient funds in the period established by the agreement or determined by the legislation of Ukraine,” the report says.
The NBU noted that the share of the financial institution amounted to 0.04% of the net assets of solvent banks, therefore the classification of the bank as insolvent will not affect the stability of the banking sector of Ukraine, which is stable today.
It is indicated that since the bank on July 1 was classified as a problematic due to the violation of liquidity standards, the financial condition and indicators of the bank deteriorated, the volume of highly liquid assets decreased to a critical level, which led to the emergence of outstanding customer payments.
It is noted that the only owner of the bank, Viktor Topolov, did not provide financial support to the institution, despite Article 58 of the law “on banks and banking activities, which states that the owners of substantial participation in the bank must take timely measures to prevent the occurrence of bank insolvency.
According to the report, 70% of the bank’s depositors will receive deposits in full, since their size does not exceed the amount guaranteed by the Deposit Guarantee Fund of UAH 200,000, while clients with larger amounts of deposits will receive them within the amount guaranteed by the fund.
The National Bank added that in general, the possible amount of payments of the guaranteed sum to depositors as of July 1, 2021 is UAH 435.8 million, or 92% of the total amount of individuals’ deposits.

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