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Ukrainian bank nationalization won't disrupt Latvian operation: regulator

Xinhua, December 20, 2016 Adjust font size:

Latvia's PrivatBank was operating as usual on Monday after an announcement that its key shareholder, Ukraine's PrivatBank, is being nationalized, the Latvian banking regulator said in a statement.

Clients of Latvia's PrivatBank have been contacting their bank, inquiring about the situation, the Latvian Financial and Capital Market Commission said.

The regulator indicated that although it has the same name as the troubled Ukrainian bank, Latvia's PrivatBank is not its subsidiary, but a separate legal entity operating in accordance with EU standards.

Ukraine's PrivatBank, however, owns a 46.5-percent stake in the Latvian bank of the same name. The rest of the Latvian bank's shares belongs to minority shareholders.

"The Ukrainian government's decision to nationalize PrivatBank has indirectly changed its key shareholder. The Ukrainian state has now become the owner of PrivatBank, which owns the 46.5 percent stake in Latvia's PrivatBank," the Latvian regulator said.

The commission also stressed that Latvia's PrivatBank is complying with all regulatory requirements effective in Latvia.

The management of Latvia's PrivatBank also issued assurances that the bank's namesake in Latvia was operating as usual and without any restrictions on Monday.

The Ukrainian government said last Sunday it was nationalizing PrivatBank, a systemic player in the Ukrainian banking sector with a 20-percent market share, to prevent its financial meltdown.

The government said it decided to take over 100 percent of PrivatBank shares to stabilize the bank and protect its clients' interests. The Ukrainian government promised to ensure a smooth takeover and keep the bank stable. Endit