Bakhmatyuk’s second bank recognized insolvent

The council of the National Bank of Ukraine (NBU) declared insolvent the bank Finansova Initsiatyva, according to the regulator’s June 24 release. The bank was fully owned by Oleg Bakhmatyuk, the biggest shareholder of Ukrlandfarming (ULF, UKRLAN) and Avangardco (AVGR LI, AVINPU). Following the decision, the bank will be managed by a three-month external administration that will be appointed by the State Deposit Guarantee Fund. The fund will repay guaranteed amounts of deposits to retail clients (no more than UAH 0.2 mln) in a total amount of UAH 3.7 bln, the NBU reported. 92% of retail clients will receive their deposits in full.

The total amount of the bank’s retail deposits was UAH 5.2 bln (+14% YTD) and all its deposits amounted to UAH 6.7 bln (+23% YTD) as of end-1Q15.

The bank failed to bring its activity in line with NBU regulations over the prescribed half-year period that expired on June 23, the NBU reported. During this period, the bank’s shareholder completed an UAH 0.84 bln capital increase (from UAH 2.0 bln) in February 2015 and contributed another UAH 0.8 bln in May of the total UAH 1.0 bln initiated capital increase. These efforts were not helpful in stabilizing the bank’s liquidity and restoring its solvency, according the NBU release.

Finansova Initsiatyva was 16th biggest bank by assets in Ukraine, as of end-1Q15. It is the second and the last bank owned by Bakhmatyuk that has been declared insolvent, after VAB Bank (then ranked 15th by assets) gained status of insolvent in November 2014.

Alexander Paraschiy: This news can’t be treated positively by investors in other Bakhmatyuk’s assets, ULF and Avangardco. At the same time, we do not expect this event will affect significantly the solvency and liquidity of the owner’s farming assets. ULF and its subsidiaries agreed not to hold term deposits with the bank (based on the ULF Eurobond prospectus of 2013), while they are likely to be able to minimize their current accounts at Finansova Initsiatyva before it is declared insolvent. Moreover, now that Bakhmatyuk has practically lost his latest bank, he might be better able to concentrate all his resources on solving the problems of his agricultural holdings.

Источник: Конкорд Капитал