REUTERS
The problem with Ukrainian-based VTB Bank's liquidity does not affect the stability of the Ukrainian banking sector, the regulator said.
The National Bank of Ukraine (NBU) says a decrease in liquidity of VTB Bank, the Ukrainian-based subsidiary of Russian state-owned Vneshtorgbank, has been observed for a long time due to the rollback of its operations and a decision by Kyiv's Economic Court of Appeals on September 5 to freeze the subsidiary's assets.
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"On November 5, the [VTB] Bank was forced to introduce preventive restrictive measures to limit the outflow of customers' funds, namely commission and limitations on cash withdrawals," the NBU said in a statement on November 5.
The problem with Ukrainian-based VTB Bank's liquidity does not affect the stability of the Ukrainian banking sector, since it accounts for a mere 0.6% of the Ukrainian solvent banks' net assets.
The NBU says the court ruling effectively deprived VTB Bank of the ability to replenish its liquidity through the sale of collateral property and assets acquired during their recovery.
The National Bank has extensively been monitoring the situation and, if necessary, will take measures within its authority provided for by the current legislation, the report said.
UNIAN memo. VTB Bank has been operating in Ukraine since 1992. It is among the 20 largest banks in terms of assets. Russian Vneshtorgbank's stake in the Ukrainian subsidiary has been more than 99.9% of shares since 2006. VTB Bank posted UAH 4.112 billion ($146.2 million) in losses in 2017.
The sanctions imposed on Russian state banks' Ukrainian subsidiaries, including Sberbank, VS Bank, Prominvestbank, VTB Bank, and BM Bank, have been in effect since March 2017. They ban the withdrawal of capital in favor of the parent structures.
Kyiv's Economic Court of Appeals has ruled to seize the shares of Russian state banks' Ukrainian subsidiaries, namely Prominvestbank, Sberbank, and VTB Bank.