REUTERS
The decision was made due to the lack of real action by the bank owners to prevent its insolvency.
The National Bank of Ukraine (NBU) has recognized VTB Bank, the Ukrainian-based subsidiary of Russian state-owned Vneshtorgbank, insolvent.
The decision was made due to the lack of real actions by owners of VTB Bank to prevent insolvency, as well as the lack of adopted and realistic measures to improve the bank's liquidity, and due to the fact that the bank's activities were in breach of the requirements of the banking legislation, according to the NBU website.
It is noted that due to the decrease in the bank's liquidity and the subsequent deterioration of its financial condition in the past month, the regulator recognized the bank as problematic on November 13 and set the deadline for adopting an action plan to bring its activities in line with the requirements of the law.
According to the NBU estimates, 97% of bank depositors will receive deposits in full, since their size does not exceed UAH 200,000 (US$7,168) guaranteed by Ukraine's Deposit Guarantee Fund. In general, the latter will provide UAH 942.7 million ($33.8 million) in payments to bank depositors.
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The regulator stressed that the recognition of VTB Bank as insolvent would in no way affect the stability of Ukraine's banking sector, since the financial institution accounts for a mere 0.6% of the solvent banks' net assets.
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.
In early November, VTB Bank, experiencing liquidity problems, announced the availability of the necessary resources and managerial experience to continue its operation and stabilize the situation.
The financial institution recalled that Kyiv's Economic Court of Appeals on September 5 imposed a ban on the alienation of bank assets, and announced the consideration of an appeal against this decision.
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.