Page 50 - UKRRptMay21

Verkhovna Rada Committee on Public Health, Medical Assistance and Medical Insurance Mykhailo Radutsky said.
Rada approves bill on restructuring of old mortgage loans . Ukraine’s parliament voted on April 13 to approve a new bill on the restructuring of foreign currency mortgage loans (#4475). Based on this bill, borrowers will have three months to apply for the restructuring of foreign currency mortgage loans in the case that they have a single living premise, backed under such loan, of no more than 140 sqm size for a flat and 250 sqm for a house and have no overdue payments for that loan as of January 2014.
The bill retrospectively re-calculates interest rates on such loans based on the Ukrainian index of deposits (6.48% in $before 2012, about 8% in 2012-2016, 5.65% in 2017, about 3.6% in 2018-2019, 2.56% in 2020). The amount of interest paid on top of the retrospective rate decreases the principal value of the loan. On top of that, the loans are converted to UAHat an exchange rate which is the average between the rate as of the loan initiating (about UAH5.05/USD) and the rate of the restructuring date (UAH28.0 as of today). The loans should be payable gradually in ten years and the new interest rate should be equal to Ukrainian deposit index in UAHas of the restructuring date plus 1pp (9.42% as of today). The rate should be revised annually. The banks can offer better restructuring conditions.
Most foreign currency mortgage loans were provided by Ukrainian banks in 2005-2008. Since mid-2009, the banks have not been allowed to provide foreign currency loans to individuals. As of mid-2009, the gross amount of foreign currency individual loans provided by the banks was $34bn. As of end-January 2021, the gross amount of such loans held by the banks was $1.21bn, of which 96% classified as non-performing. The biggest holders of such loans are Alfa Bank ($0.28bn, 98% of which are non-performing) and Privatbank ($0.40bn, 99% of which are non-performing). Another big holder of such loans is the Deposit Guarantee Fund, whose foreign mortgage loans also can be restructured under the approved bill.
8.1.4 Bank news
Ukraine’s Cabinet of Ministers decided on April 2 to not approve the strategy of development for state Oschadbank, finclub.net news site reported on April 7. According to the source, the ministries of economy and of reintegration have some comments and suggestions to the strategy which have been provided by the bank’s supervisory board. The board was granted a week to refine the strategy.
By law approved in 2018, the state bank’s supervisory board has to prepare the bank’s development strategy and offer it for approval by the bank’s owner. A second refusal of the shareholder to approve the strategy allows the cabinet to dismiss the entire supervisory board of the bank. Oschadbank’s supervisory board under this law was appointed in June-November of 2019.
At this stage, it is hard to say whether some ministries indeed have valuable comments regarding the bank’s strategy, or if there is a political will to not approve the strategy and, based on this, fully replace the supervisory board of Oschadbank. The latter looks possible if the current cabinet (or president) has
50 UKRAINE Country Report May 2021 www.intellinews.com