Another Ukrainian bank goes bankrupt

Monday, May 23, 2016 - 22:55 (EEST) Section: Latest news

Bank Mykhailivsky has been declared insolvent due to risky deals, according to the National Bank of Ukraine (NBU).
The NBU board says it has decided to declare Kyiv-based Bank Mykhailivsky as insolvent because it conducted dubious operations with individual deposits.
As the NBU said on its website, Mykhailivsky was designated as a problem bank on December 23, 2015, due to risky deals; since that time, the regulator had been working with the bank`s shareholder and management to settle the situation.
On May 20, Mykhailivsky Governor Ihor Doroshenko announced his resignation, and on the same day the bank reported that its Operation Bank Day system did not work for technical reasons. The NBU`s supervisor got access to the system late on May 20 and saw that a large number of transactions had been effected to transfer individual deposits from a bank-affiliated financial company to the bank, which increased load on the Deposit Guarantee Fund to UAH 2.6 billion from UAH 1.6 billion.
The NBU said that under the Ukrainian law on banks and banking, the regulator should announce a bank`s bankruptcy if such activity has been revealed.
What is more, on May 23, the NBU said that Mykhailivsky prevented the NBU`s supervisor from getting to the bank`s information system. Thus, the bank`s insolvency was declared late in the evening.
Upon the NBU`s notification, Deposit Guarantee Fund representatives arrived at the bank on Monday morning for additional supervision. During that period of time, the bank`s correspondent account was blocked, making it impossible to bring funds outside the bank, however, the supervisor was notified about a number of internal clearing operations, which is now being verified.
The NBU says that after the verification, it plans to file a claim at law-enforcement agencies on charges of forcing the bank`s into bankruptcy. And the additional load worth UAH 1 billion on the Deposit Guarantee Fund will be challenged.
What is more, the NBU announces it has not received any documents that Mykhailivsky was merged with another bank.
Mykhailivsky has been working on the Ukrainian market since 2013. Ukrainian businessman Viktor Polischuk, who owns the Eldorado consumer electronics retail chain, is a major stockholder in the bank.