Page 47 - UKRRptNov21

and retail high rise complex on Kyiv’s Peremoha Avenue, near the rail station. With 223,000 square meters, bids on Sky Towers loans start at $272 million.“The process of selling NPL claims involves several English and Dutch auctions with a gradual reduction in price,” reports SETAM, the government agency handling the sales. “At the first auction, the rights of claim are set at a price equal to the amount of the borrower's debt to the Bank.”
International rating agency Fitch lifts the rating of Ukrainian state banks ratings to "B" (interfax). Fitch confirmed Ukreximbank's resilience rating to "B-", and the long-term issuer default ratings (IDRs) of the state-owned PrivatBank, Oschadbank, Ukreximbank, and Ukrgasbank at "B" with a positive outlook. As reported by the agency on Wednesday, the stability rating (VR) of Ukreximbank was raised to "b-" from "ccc +", while Oschadbank and Ukrgasbank were confirmed at "b-", and PrivatBank - "b". In addition, Fitch upgraded Ukreximbank's Eurobond rating from "CCC-" to "CCC".
Court of Appeal has set a dangerous precedent in the Ukrzaliznitsya -VR Global Partners case that would reduce the ability of Ukrainian banks to manage their bad loans exposure. In September, a Court of Appeal upheld Ukrzaliznytsia’s bid to invalidate an agreement by which the US-based fund, VR Global Partners LP, purchased a block of loans to UZ from Prominvestbank 2.5 years ago. The court ruled that the purchase of loans at a discount was a “factoring” transaction that can only be performed by a licensed factoring company in Ukraine. VR claims that the decision of the court was politically motivated, citing administrative pressure on courts in its press release and notes that the decision was made without the court reviewing its written submissions and after two minutes of deliberations. The case is now on appeal to the Supreme Court. Its outcome may have wider implications on the Ukrainian banking system, especially in the NPL's market.
8.2 Central Bank policy rate
As expected, the central bank decided on October 21 to keep the prime interest rate at 8.5%. Earlier this year, the National Bank raised rates four times this year as inflation jumped to 11%. Yesterday’s rate freeze seems to go against the IMF’s advice on Wednesday that “monetary policy should become less accommodative.” Looking ahead, Kyrylo Shevchenko, the bank’s governor, predicts that interest rate reductions will be more gradual than previously forecast. He told reporters: “It is expected that by the end of next year it will be 7.5%, against 6.5% in the previous forecast.”
The NBU discount rate of 8.5% was supported by 7 members of the NBU committee. Three were in favor of raising it to 9%. The discounted rate was announced on the NBU telegram channel. During the meeting, the committee members noted that the current inflationary development is close to the trajectory envisaged in the July macroeconomic forecast of the NBU. Consumer and core inflation accelerated to 11% and 7.4%, respectively.
47 UKRAINE Country Report November 2021 www.intellinews.com