Ukraine central bank loans Prominvestbank $1 bln

15:54, 30 September 2008
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A shareholder dispute caused a panicked mood amongst depositors

Ukraine`s central bank said on Tuesday it loaned Prominvestbank 5 billion hryvnias ($1.03 billion), raising the amount from 1 billion hryvnia which a top official announced the day before.

The central bank said it had decided to loan the country`s sixth largest bank the cash because a shareholder dispute had caused people to withdraw large amounts of deposits.

"The raiders attack on the bank caused a panicked mood amongst depositors and a withdrawal of people`s deposits, which caused difficulties with making payments," the bank said in a statement.

"In connection to that, the bank`s authorities took the situation into account and decided to refinance the bank`s liquidity through a sum of 5 billion hryvnias."

A "raider attack" is a commonly used expression in Ukraine to mean any unconventional way of gaining control of a firm or undermining it.

The bank did not explain why the loan was increased from the 1 billion which had been announced by first deputy chairman Anatoly Shapovalov on Monday. Shapovalov said the loan was good for 6 months, but the statement made no reference to a period.

Reuters via Guardian

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