Ukraine’s largest bank, PrivatBank, is no longer private. To ‘preserve stability of country’s financial system’ (hide insolvency), Ukraine Nationalizes its Largest Bank.
Ukraine’s government moved late on Sunday to nationalise PrivatBank, the war-scarred country’s largest and most systemically important commercial bank, amid concerns over the state of its balance sheet.
The government pledged to fully protect depositors and said the takeover, proposed by the central bank and approved by the nation’s national security council, was needed to “preserve stability of the country’s financial system”.
The transaction, which placed 100 per cent of the bank into state ownership, was agreed with the outspoken Igor Kolomoisky and Gennady Bogolubov, PrivatBank’s oligarch majority co-owners, the government said. The two control a diversified portfolio of assets spanning oil production, ferroalloys, media and chemicals.
In a statement last week, PrivatBank hit out at an “informational attack” and rumours of its “pseudo-nationalisation”, saying the actions were “aimed at [hurting] bank clients and amount to an attempt to politically destabilise the situation in the country”.
The bank said then there was “no legal concept or legislative way in Ukraine today to ‘nationalise’ this or that stably operating bank”.
No Legal Way
It appears there are two issues here: Legality and Stably Operating.
- Legal or or not, governments never give a damn.
- PrivatBank is not solvent.
Mike “Mish” Shedlock