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Ukrainian lender declared insolvent

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Ukrainian lender declared insolvent

TheNational Bank ofUkraine said April 5 that it declared insolvent and put the lender under the provisional administration of theUkrainian Deposit Guarantee Fund until May 4.

Theregulator said the bank's liquidity situation deteriorated recently and that thelender started delaying payments. Talks with its shareholders, which includethe city of Kiev, failed to yield results, the central bank added.

Centralbank Deputy Governor Kateryna Rozhkova said a number of companies owned by thebank's shareholders transferred funds from Khreschatyk to other banks, whichworsened its liquidity situation, Delo.ua reported April 5.Authorities in Kievrecently agreed to increase the lender's capital by 150 million Ukrainianhryvnia, subject to a matching capital injection promised by other shareholders,which failed to materialize, the central bank said.

Almost99% of the bank's deposit holders will qualify for compensation, as the valueof their deposits was below the 200,000 Ukrainian hryvnia level guaranteed bythe state, the regulator said. The initial value of compensation to be paid outis estimated at 2.8 billion hryvnia, Delo.ua noted.

Inaddition to the city of Kiev, which holds a 25% stake in the bank,Khreschatyk's shareholders also include Andriy Ivanov, with a 37.44% stake, MykolaSoldatenko with a 24.24% stake and a number of minority shareholders.

Khreschatykis one of the 20 largest lenders operating in Ukraine.

As of April 5, US$1 wasequivalent to 26.04 Ukrainian hryvnia.