Off the wire
• U.S. stocks open higher ahead of Yellen's speech  • 1st LD Writethru: Security Council adopts resolution to send UN observers to war-torn Aleppo  • UN peacekeeper killed in DR Congo militiaman attack  • Roundup: Refugees start hunger strike on Chios island in protest of living conditions  • Xinhua world news summary at 1530 GMT, Dec. 19  • Roundup: China's top legislature convenes bimonthly session  • South Sudan hopes to settle border and oil issues with Sudan  • Russia to issue federal loan bonds in BRICS, SCO currencies  • Croatia brings stars of top national league to China Cup  • China issues five-year plan to revive northeast  
You are here: 　 Home

Ukraine nationalizes largest bank over threat to financial stability

Xinhua, December 19, 2016 Adjust font size:

The Ukrainian government said Monday it has nationalized the country's largest financial institution, the Privatbank, due to its huge capital shortage which threatened to hinder stability of Ukraine's financial system.

"Given the systemic importance of the country's largest bank, it was decided to transfer the Privatbank under the control of the state. This move will make it possible to protect deposits and rescue the domestic financial system," Oleksandr Danyliuk, Ukraine's finance minister was quoted as saying by the government press service.

According to the National Bank of Ukraine (NBU), the Privatbank which serves about 20 million consumers, has failed to meet the government capitalization target.

The Privatbank's capital shortage was estimated by the NBU at 5.6 billion U.S. dollars.

To inject fresh capital into the bank, the finance ministry said it will issue domestic bonds. According to Danyliuk, the government targets to attract some 1.63 billion dollars at the first stage of bond issuing.

Ukrainian President Petro Poroshenko has welcomed the nationalization of the bank, saying it was a vital move to maintain the country's financial stability.

"This decision has saved both -- the bank itself and the banking system," Poroshenko said in a video address to the nation.

Meanwhile, Oleg Gorokhovsky, first deputy chairman of the Privatbank, said that the nationalization was a result of an "information attack" against the financial institution, which forced customers to withdraw their deposits and left the bank without enough funds.

"The decision on a voluntary and peaceful transfer of the bank to the state ownership was adopted when we realized that we cannot survive this information attack," Gorokhovsky wrote on Facebook.

Established in 1992, the Privatbank, based in Dnipro city in central Ukraine, operates 21.6 percent of Ukraine's banking assets and serves nearly half of adult population of the East European country.

The financial institution operates some 2,500 offices in Ukraine and has several overseas branches in European countries, particularly in Latvia and Italy. Endi