Page 50 - UKRRptMar19

“The data suggest that Oschadbank made the most progress among the four state banks in dealing with bad loans. Its share of the total amount of reduced overdue loans was 61%, while its share in total bad loan restructuring was 77%. The bank’s balance sheet remains far from being perfect, but its progress promises it will be able to restructure or get repaid some portion of its bad loans this year as well (recall that in recent months, it announced another deal to restructure UAH4.4bn in debt to Ukrlandfarming). That allows us to remain bullish on OSCHAD Eurobonds,” Alexander Paraschiy of Concorde Capital said in a note.
8.1.2 Bank news
Russia’s retail banking powerhouse Sberbank increased the authorized capital of its Ukrainian subsidiary bank by UAH3.3bn ($122mn), or by 15.9%, to UAH24.065bn, the bank said on February 12. As a result of the increase in the authorized capital, the bank has formed additional reserves for loans, as well as increased capital adequacy, the bank said. Sberbank last year returned a loss of UAH7.6bn, after it was sanctioned by the National Bank of Ukraine (NBU). In January, the NBU fined the Ukrainian daughter bank UAH94.737mn for “risky activities.” Sberbank is appealing the penalty in court. Sberbank established a subsidiary bank in Ukraine in 2001. According to the Ukrainian regulator, as of December 1 of last year, the bank held 11th place in the Ukrainian banking system in terms of net assets of UAH31.824bn.
Ukraine's state-owned Privatbank has secured a partial award in its favour in the Permanent Court of Arbitration at the Hague, where the lender is challenging Russia's expropriation of the bank's investments in Ukraine's Crimea.
Specifically, the arbitral tribunal found that it has jurisdiction over all of PrivatBank’s claims against Russia, that Moscow breached its obligations under the Ukraine-Russia bi-lateral investment treaty by unlawfully expropriating PrivatBank’s investments in Crimea, and that PrivatBank is entitled to full compensation for that expropriation, the bank said in a statement e-mailed to bne IntelliNews on February 15.
The arbitral tribunal reserved for the next phase of the arbitration the question of how much compensation is due to PrivatBank for Russia's "unlawful actions". PrivatBank seeks compensation in excess of $1bn.
In 2018, the International Court of Arbitration in Paris has ruled that the Russian government should pay compensation of $1.3bn for losses caused by the illegal military annexation of Crimea in 2014 to Ukraine’s second biggest lender Oschadbank. Oschadbank filed a lawsuit in August 2016 with claims for the recovery of lost assets and remuneration for the lost of business and payable interest caused by Russia’s take over of the peninsula.
Russia refuses to recognise the ruling, as it believes the court had no authority to consider Oschadbank’s claim against Russia.
The move followed another Oschadbank lawsuit worth UAH15bn ($589mn) filed in 2015. Earlier, the Ukrainian leadership urged all Ukrainian state-owned companies to follow the example of Oschadbank and recover damages for the annexation of Crimea and the loss of Ukrainian property.
50 UKRAINE Country Report March 2019 www.intellinews.com