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Report: VEB mulls closure of Ukrainian unit

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Report: VEB mulls closure of Ukrainian unit

Vnesheconombank has abandoned its plan to sell its Ukrainian unit PSC Prominvestbank and is leaning towards closing the subsidiary down, Kommersant reported Aug. 13, citing sources close to both banks.

VEB terminated sale talks with Ukrainian and Russian businessman Pavlo Fuks, as he was unable to obtain approval for the deal from the Ukrainian central bank.

With the sale blocked by the regulator, Prominvestbank has been curbing its operations, having stopped offering new loans and attracting new deposits. A final decision regarding the closure of the Ukrainian unit will be taken by the Russian parent in November, Kommersant said.

Experts cited by the newspaper estimate that VEB's losses from a Prominvestbank closure could amount to around 13 billion Russian rubles.

Vnesheconombank, PAO Sberbank of Russia and VTB Bank (PJSC) have been trying to divest their Ukrainian subsidiaries after authorities in that country imposed sanctions on the units of Russian state-owned banks in 2017. VTB also has not been able to divest its Ukrainian units PJSC BM Bank and JSC VTB BANK, and has been gradually closing the banks down.

Sberbank is still trying to sell its Ukrainian unit Sberbank JSC, with Ukrainian businessman Oleksandr Yaroslavsky interested in purchasing the subsidiary.

In addition, Belarusian lender OJSC Paritetbank, whose first request to buy Sberbank Ukraine was rejected by the Ukrainian central bank in March, submitted another request with the regulator in June to purchase the lender.

But the deputy head of the central bank, Kateryna Rozhkova, said the regulator sees no possibility of approving the transaction because Paritetbank does not meet regulatory requirements for a deal, Interfax Ukraine reported Aug. 9.

Rozhkova was also cited as saying that the central bank does not currently see a potential buyer for Sberbank.

As of Aug. 10, US$1 was equivalent to 67.51 Russian rubles.