Privatbank requires an UAH8.0bn capital injection per early estimates

Privatbank requires an UAH8.0bn capital injection per early estimates



7 жовтня 2015 года
ICU

In his response to the results of its 2015 stress test, Privatbank's CEO Mr. Dubilet contests the increase to UAH8.0bn (+35.2% compared to 2Q15 UAS report) in regulatory capital required, claiming that there was a material overstatement of this amount. He stated that the NBU insists on an additional provisioning of UAH7.1bn to cover corporate loans (+4.5% according to according to the 2Q15 IFRS report) and UAH0.9bn for retail loans (+3.5 %). Ukraine's largest bank was also the latest of the solvent banks to complete the previous year's recapitalization plan. The bank's shareholders have committed to replace US$150m of Tier 2 capital (subordinated bonds) due in January 2016 with their own funds. As of today, however, only US$70m of subordinated debt has been issued. In our opinion, Privatbank might exercise its market power and bargain for a lower amount. In our opinion, the bank's loan portfolio, at least 40% of which is related third party loans, is significantly under-provided. As of 2Q15, the bank has formed reserves for corporate borrowers of only 10.3% of the gross portfolio and 19.0% for retail loans.

Источник: ICU

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