Business news from Ukraine


The National Bank of Ukraine (NBU) expects a significant deterioration in trade indicators in 2022, but with a current account deficit near zero at the end of the year, Deputy Head of the Central Bank Serhiy Nikolaychuk said during a discussion organized by the Center for Economic Strategy (CES).

“So far, given our basic assumptions, we expect the current account deficit to be close to zero throughout this year. But in the memo, take into account that the outflow from the current financial account will be quite significant,” he said.

The deputy head of the National Bank noted that he had questions about the statistics recently published by the Ministry of Economy, in which imports in March fell significantly more than exports. “Based on the payments that we see, we do not see such a sharp reduction in imports and do not see that exports feel much better than imports,” Nikolaychuk stated.

According to him, an important component is the expansion of expenses of Ukrainian citizens abroad, which are not visible in the statistics for imports, but are visible in the payments of Ukrainian banks in foreign currency for Visa and Mastercard settlements. “In the balance of payments, this is an operation that leads to an expansion of the current account deficit,” the deputy head of the NBU explained.

He also clarified that now, when analyzing the current account, it is necessary to take into account that for a month and a half a significant part of imports came as humanitarian or military aid.

“We will see an increase in the trade deficit, but this will be offset by transfers to the secondary income account. That is, free humanitarian aid leads to a neutral impact on the current account,” the deputy head of the National Bank said.

It is also important to keep track of income from IT services, the dynamics of transfers, as there are different scenarios and different opportunities and risks, Nikolaychuk added.

In his opinion, imports will remain suppressed for a sufficiently long period, so the situation with the payment account will not be so bad. “But at the next stage, when we talk about the restoration of the Ukrainian economy after the war, we can count on a greater expansion and current account deficit. But let’s hope for financing from different sources,” the deputy head of the National Bank emphasized.

As reported, the World Bank, in its strongly deteriorated forecast for Ukraine, released this week, expects a current account deficit of 6.8% of GDP this year and its expansion to 16.8% of GDP in 2023.


On February 24, 2022, the National Bank of Ukraine (NBU) transferred part of the profit before distribution in the amount of UAH 19 billion to the state budget of Ukraine to financially support the functioning of the state under martial law, according to the website of the central bank.
“The National Bank promptly transferred part of the profit before distribution at the end of 2021 to the state budget of Ukraine. This amount is UAH 19 billion. This is a step that our state, its Armed Forces and every Ukrainian needs,” Governor of the NBU Kyrylo Shevchenko said.
The decision to transfer part of the profits was made by the Board of the National Bank of Ukraine on February 24, 2022.
As reported, the National Bank opened a special multi-currency account to raise funds for the needs of the Ukrainian army in connection with the introduction of martial law in Ukraine, the armed aggression of the Russian Federation and the danger to the state independence of Ukraine, its territorial integrity.



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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Ukraine intends to increase the inflow of foreign direct investment (FDI) by 2025 to $15 billion per year, while at the end of 2020 their outflow amounted to $420 million, and in 2021 the National Bank predicts a recovery in FDI inflows at the level of $3 billion.
The targets are enshrined in the National Economic Strategy 2030 posted on the government’s website.
According to it, Ukraine should at least double its real gross domestic product (GDP) in 10 years.
Target indicators are also the following: an increase in exports to $150 billion compared to $49 billion in 2020, an increase in labor productivity by at least 1.7 times, and a decrease in the unemployment rate from 8.6% to 6% in 2030.
As indicated in the strategy, the share of the public sector of the country’s banking system by 2030 should be reduced to 25% from the current 54%.
At the same time, the document contains the intention of the Ukrainian government to keep the state budget deficit at the level of 2-3% of GDP, and the ratio of public debt to GDP at 30-40%.
As for the trade priorities of the state until 2030, here the document sets out plans to increase the share of small and medium-sized businesses of total exports to 40%.
International trade should also be facilitated by the reduction of the time for passing customs procedures to average European indicators, as well as the synchronization of the work of the customs authorities.
In addition, the National Strategy provides for an increase in the share of investment imports by at least 30% by 2030.



The National Bank of Ukraine (NBU) has for the first time defined the list of critical infrastructure facilities in the banking system, which includes 13 banks, the press service of the regulator said on Friday.
The list includes PrivatBank, Oschadbank, Ukrgasbank, Ukreximbank, Raiffeisen Bank Aval, FUIB, Alfa Bank, OTP Bank, TAScombank, Universal Bank, UkrSibbank (all are based in Kyiv), Pivdenny Bank (Odesa) and A-Bank (Dnipro).
The list was approved by NBU Board decision No. 148 dated April 20, 2021 on critical infrastructure facilities in the banking system of Ukraine.
The facilities of critical infrastructure include banks, the stable operation of which ensures the stability of the banking system, it is essential for the economy and security of the state, the functioning of society, and which are of significant public interest. In particular, these are banks that are included in the list of systemically important banks, and banks in which the state directly or indirectly owns more than 75% of their charter capital.



The Ukrainian government has allowed the Ministry of Justice to engage a legal advisor to defend the state in an Oleh Zhukovsky’s $300 million lawsuit filed on January 4 this year against the National Bank of Ukraine with the United States District Court for the Southern District of Florida. According to an explanatory note to the document, the National Bank received a statement of claim on February 5 this year, after which it turned to the Ministry of Justice for help. On March 11, an interdepartmental working group was created to protect the interests of the state in this case, which considered it necessary to involve the advisor.
According to the lawsuit, Zhukovsky is seeking to recover $102.2 million of the principal amount of the debt and the interest, penalties and fines on deposits in Brokbusinessbank, invested by companies ZUKK Trading Limited, Intertransgroup LLC and ex-MP from the Yulia Tymoshenko Bloc Mykola Kovzel and his assistant Vitaliy Didylivsky in 2012-2013. They transferred the rights to compensation for losses to Zhukovsky, who engaged Shutts & Bower in the lawsuit.
It claims that the officials of the National Bank were “accomplices” of the scheme for allegedly withdrawing money from Brokbusinessbank by business man Serhiy Kurchenko, and after a part of the funds in the amount of $172 million was returned as a result of special confiscation in 2017, they sent them to pay interest on eurobonds of Ukraine to American mutual funds including Franklin Templeton Investments, T. Rowe Price and TCW.
According to the lawsuit, criminal cases of embezzlement related to the case are being investigated in Ukraine and the United States, which corroborates the plaintiff’s charges. In addition to Brokbusinessbank and Kurchenko, who bought it in 2013 without the permission of the Antimonopoly Committee of Ukraine and his Real Bank, the plaintiff also accuses ex-Governor of the National Bank Serhiy Arbuzov, who allegedly assisted them and Ihor Sorkin, who replaced him, as well as Viktor Yanukovych, who was then President of Ukraine. The list of those involved also included Valeriya Gontareva, who became governor of the NBU after the escape of Yanukovych, under whom the deposits in Brokbusinessbank could not be returned.
In addition, the list of those involved contains ex-owners of PrivatBank Ihor Kolomoisky and Hennadiy Boholiubov, their American partners Mordechai Korf and Uriel Laber, companies from the Optima group, as well as Ukrnafta and PrivatBank. The lawsuit alleges that the ex-owners of PrivatBank were involved in laundering Kurchenko’s money and buying real estate in the United States using this money.