Regulator designates Misto as insolvent bank

The National Bank of Ukraine (NBU) says its Board has decided to designate JSC Misto Bank as an insolvent bank over a 50% decrease in its capital ratios against the minimum established level.

The decision was made to protect the interests of the bank's depositors and creditors, the regulator's press service said on its website on December 14.

Read alsoNBU revokes Arcada bank's licenseThe financial institution faced capital challenges over the loss of one of its major assets, namely a soybean processing plant in Kherson region. The book value of the real estate property exceeded UAH 271 million, or US$9.7 million, (almost 17% of the bank's total assets), which made the bank's capital shrink below the regulatory level.

"Due to the lack of measures taken to improve the bank's condition and the fact that JSC Misto Bank's activities failed to meet the requirements of banking legislation and the National Bank's regulations, today, the NBU Board decided to declare the bank as insolvent," the press service said.

The move does not affect the Ukrainian banking sector's stability, as the financial institution's share is a mere 0.1% of the solvent banks' net assets, the report said.

"Despite the situation with Misto Bank, our banking sector is in the best condition in [Ukraine's] history. Banks have enough capital today. There are enough funds to meet customers' needs. We're always ready to support banks if any bank's financial condition is to be adjusted," the press service quoted NBU Governor Kyrylo Shevchenko as saying.

Read alsoUkrainian banks post lower profits over quarantine – NBUThe regulator assures that 78% of Misto Bank's depositors (2,282 people) will have their deposits back in full. The amount of their deposits does not exceed UAH 200,000 (US$7,176) per deposit, secured by the Deposit Guarantee Fund (DGF). Clients with larger deposits will receive their money back within the amount guaranteed by the DGF. In general, the possible payments of the guaranteed amount to depositors as of November 1, 2020, stood at UAH 307.8 million, or US$11 million, which accounted for 60% of individuals' total deposits.

According to the NBU, Ivan Hennadiiovych Fursin controls Misto Bank, as he collectively (directly and indirectly) is the owner of a 97.18% stake in the bank.

Access to insolvent banks' register

• On July 23, 2020, the Deposit Guarantee Fund jointly with the ProZorro public e-procurement system opened access to the register of the country's insolvent banks. The register shows the status of assets that will be put up for sale in the near future, including the right to claim loans, property, etc.
• On September 7, 2020, the country's Financial Stability Council approved the Fund's debt restructuring mechanism.