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final say on interest rates. He’s named two appointees since taking the top job and can cast two votes in the event of a tie. Shevchenko said in an interview this month that he’d defend the bank’s independence.
Ukraine’s State Export-Import Bank Ukreximbank is in talks with the central bank and Finance Ministry on a possible capital increase of about UAH10bn, the bank’s CEO Yevhen Metzger told Interfax-Ukraine in an interview published on August 27. He explained that additional equity is needed to cover loss provisions on the bank’s old loans, as well as for the bank’s expansion. Talking about the bank’s NPLs, Metzger said that the actual number of non-performing loans in the bank is higher than the bank has reported (57% of all loans, or UAH75.0bn as of August 1). In particular, he said that there is a risk that some of earlier restructured loans will turn to non-performing. Metzger also confirmed a commitment by the bank to decrease the share of NPLs to 32% in three years. Recall, the bank’s CEO announced a possible need to increase its equity in April. In 2014-2017, the government contributed UAH22bn into Ukreximbank’s equity.
The Council of the National Bank of Ukraine (NBU) approved on August 7 the nomination of Oleksiy Shaban as NBU deputy governor, the regulator’s website reported the same day.
Before his appointment to the position, Shaban was working as head of NBU’s payment systems department. Before that, he was working for Privatbank, which is recognized as the most efficient in Ukraine in terms of IT and payment systems.
One out of the five positions of deputy NBU head became vacant last week after the NBU Council dismissed deputy NBU governor Serhiy Kholod at his request.
The NBU approves all its decisions with a simple majority vote of its six executive board members (five deputy NBU governors and the governor, whose vote is tie-breaking). After the new NBU governor, Kyrylo Shevchenko, was appointed in mid-July, two deputy NBU heads have been replaced, meaning the three new NBU board members now form a majority.
"Now that Shevchenko has gained his majority on the NBU board, he can pursue his own policy for the central bank, which may or may not differ from the policy implemented before his appointment (which was considered by Ukraine’s international partners to be independent from politics)," Alexander Paraschiy, an analyst at the Kyiv-based Concorde Capital brokerage, said in a research note.
"The key indicators of Shevchenko’s “independence” will be in monetary policy: how fast the NBU’s key rate will react to expected intensification of inflationary pressure, and whether the NBU will take a role in financing the state budget deficit," he added. "Firm conclusions about the upholding of NBU policies and its unchanged independent status can be reached only in 3-6 months, in our view, while the grounds for the opposite conclusions can surface much faster."
Oschadbank plans to auction off non-performing loan portfolios starting in autumn 2020, reports Interfax Ukraine. In the first half of this year this state
52 UKRAINE Country Report September 2020 www.intellinews.com
