Page 28 - bne IntelliNews newspaper 14 July 2017

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July 14, 2017 www.intellinews.com I Page 28
bne:Banker
Ukraine injects €759mn more into stricken PrivatBank
The Ukrainian authorities have issued domestic government bonds in the amount of UAH22.5bn (€759mn) in exchange for the bank’s shares as part of the additional capitalisation of nationalised PrivatBank, the country's Finance Ministry said on July 12.
The latest injection of capital into PrivatBank will enable it to meet the 10% capital adequacy requirement, even under a conservative scenario applied by the EY audit company when performing due diligence of the bank’s balance sheet recently.
UAH22.5bn will be used to plug a capital shortfall stemming from the former management’s involvement in fraudulent operations before nationalisation, according to the National Bank of Ukraine (NBU). An additional UAH16bn will be required to cover impairment losses on fixed assets, the central bank said in June.
The Ukrainian government announced the nationalisation of PrivatBank after it had failed to fulfill a three-year recapitalisation plan. The bank was found to have a UAH148bn (€5.1bn) hole in
its balance sheet as of early December, which at the time was said to be almost entirely due to related-party financing. To cover the capital shortfall, the government injected UAH117bn (€4.1bn) and bailed-in PrivatBank’s non-deposit unsecured creditors for UAH29.4bn ($1.1bn), including bondholders for the amount of $595mn.
Following its takeover Kazkommertsbank (KKB) last week, Kazakh- stan’s second largest lender Halyk Bank announced on July 12 that it has injected KZT185bn into KKB to recapitalise it.
Halyk bought a 96.81% stake in KKB for a nominal sum of KZT2 on July 5. The recapitalisation completes yet another condition included in the takeover agreement. The agreement, signed in March, also included the condition that the government must buy up bad loans of KKB for KZT2.4tn, shifting them to the central bank-operated “bad bank”, the Problem Loans Fund (PLF).
Kazakhstan's central bank estimates that the government will provide more than KZT500bn (€1.33bn) to support the Central Asian country’s banking system between August and September. The KZT500bn amount will likely at least partly cover KKB’s recapitalisation efforts.
Halyk injects KZT185bn into KKB