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 Privatbank becomes 100-percent state-owned, - Cabinet of Ministers

The Cabinet of Ministers of Ukraine has made a decision to nationalize Privatbank. The government intends to issue 30-year domestic government loan notes worth of 150 billion hryvnia and become a 100-percent owner of the bank.

Censor.NET reports citing the press service of the Cabinet of Ministers.

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"The Cabinet of Ministers of Ukraine at its meeting on Sunday considered the matter of securing stability in the financial system of the state. Taking into account the results of the National Security and Defense Council's meeting, the Government has supported the proposal of the National Bank and the Financial Stability Council about transferring Privatbank OJSC into 100-percent state ownership. It is stipulated that the state in the name of the Finance Ministry will own Privatbank OJSC 100 percent and guarantee unimpeded operating of the institution and preservation of money of its clients," the message reads.

"These step are taken in coordination with international financial organizations and with their support. Head of the NBU Valeriia Hontarieva, who was present at the Cabinet meeting, and Finance Minister Oleksandr Danyliuk informed Cabinet members that private shareholders of Privatbank proposed the state to become the bank's owner in the interests of its clients. The transition period starts on Dec. 19. The state will provide for a smooth transition and stable operation of this institution in its regular mode," the Cabinet stressed.

The Cabinet says the decision they have made will save both Privatbank and the entire banking system of Ukraine. Separate announcements related to the transition are expected Monday from Finance Minister Oleksandr Danyliuk, National Bank of Ukraine Head Valeriia Hontarieva, President of Ukraine Petro Poroshenko and Prime Minister of Ukraine Volodymyr Hroisman.

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Sources of Ukrainski Novyny news agency informed that in the evening Sunday, after 9 p.m., a meeting of the National Security and Defense Council took place, with members of the Cabinet being present. The invitees arrived to the meeting through back doors and were not available for the press. Later, Ukrainski Novyny reported that NSDC decided on the need to nationalize Privatbank. Subsequently, the members of the Cabinet approved the decision.

The Cabinet's ruling stipulates that the state is becoming a 100-percent owner of the bank. The Cabinet will issue 30-year domestic government loan notes worth of 150 billion hryvnia ($5.56 billion). The terms and volumes of the issuance are not yet disclosed. The notes will be acquired by the National Bank, and the hryvnias received will be 'pumped' into Privatbank's capital.

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Temporary administration will be introduced in the bank. It is kept secret who will head the bank, but news agencies say former Finance Minister Oleksandr Shlapak has been chosen for the post by international finance organizations.

 
 
 
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