The majority shareholder of VAB Bank (Kyiv), Oleh Bakhmatiuk, has said that he is ready to finance a project transferring part of the bank’s assets and liabilities to the state bank Ukrgasbank, as it will minimize negative consequences for creditors and depositors.
“We’re working not on a nationalization scheme, but the actual transfer of assets from VAB Bank to state bank Ukrgasbank, so that we give comfort to depositors, the [Individuals’ Deposit] Guarantee Fund, and so the market has a positive signal,” he told Interfax-Ukraine on the sidelines of an investment conference in London.
Bakhmatiuk said that he is ready to discuss the possibility of providing a subordinated loan of around Hr 3 billion for a seven to 10 year period to Ukrgasbank. He stated that he planned to support VAB Bank using funds from a project jointly ran with the state on the preservation of the bank, although the National Bank of Ukraine (NBU) rejected the idea, despite support for the project from the Ukrainian president and prime minister.
The businessman added that companies affiliated with him owe some Hr 3 billion to VAB Bank out of its Hr 17 billion credit portfolio, and the funds, which will be returned, could be used to pay more than the guaranteed sum of deposits refunded to eurobond holders and individual depositors.
Bakhmatiuk also said that he is ready to become an investor in VAB Bank after temporary administration has been introduced, as he predicts that if the bank were to be liquidated, the value of its assets will be too low, due to market and other factors, including the desire of market members to buy them at a low price.
Commenting on accusations alleging that the bank’s debts were written off before the introduction of temporary administration, Bakhmatiuk stated that the cancellation was carried out as requested by auditors and the NBU, while the assets were not in fact withdrawn from the bank.
“The bank wrote off so-called bad assets. We did not move them from the bank, they were left in the bank. This was a technical regulating transaction,” the businessman said.
VAB Bank has been operating in the Ukrainian financial market since 1992. Oleh Bakhmatiuk owns a 86.778 percent stake in the bank.
In terms of total assets as of Oct. 1, 2014 (Hr 23.973 billion), the bank ranked 16th out of 173 Ukrainian banks.
Temporary administration at VAB Bank was introduced from Nov. 21, 2014 to Feb. 20, 2015.
