Ukraine’s Cabinet of Ministers has approved of the additional capitalization of the state-run Oschadbank (Savings Bank of Ukraine) to the tune of UAH 5.750 billion.
According to the cabinet decision, the bank will additionally issue 4,957 shares with the existing face value of UAH 1.16 million.
As reported, the National Bank of Ukraine (NBU) on December 18 reported on the deterioration in the quality of loan portfolios of Oschadbank and Ukreximbank and was studying the need for additional capitalization of the financial institutions. According to the central bank, first of all, the quality of loans granted to large business groups decreased and collateral for such loans depreciated.
The Ministry of Finance the next day confirmed the relevant information and informed that the amount of necessary capitalization would be determined after consultations with the NBU.
According to the NBU, the issue of government domestic loan bonds for capitalization of state-owned banks remains the main component of the quasi-fiscal deficit. According to its data, for the 11 months of 2017 some UAH 48.9 billion, or 1.7% of GDP, was spent on this purpose.
In general, according to the central bank, in the first nine months of 2017 the charter capital of the banking sector increased by UAH 57 billion, or by 13.7%. The main factor was the additional capitalization of state-owned banks by UAH 44 billion. (Interfax-Ukraine/Business World Magazine)