Provisional administration introduced in Fidobank

Friday, May 20, 2016 - 21:20 (EEST) Section: Latest news

The Individual Deposits Guarantee Fund today, May 20, has decided to appoint a provisional administration to Fidobank owned by Oleksandr Adarich. Earlier this week, the bank reported problems with liquidity and outflow of funds from customer accounts.
As reported on the website of the Fund, the decision is made based on the decision of the National Bank of Ukraine of May 20 to classify Fidobank as insolvent.
According to the Fund, a provisional administration was appointed for a period of one month – until June 19, inclusive, with Oleksandr Kovalenko being appointed provisional administrator of the bank for the said period.
As explained by the National Bank of Ukraine on its website, the decision to put Fidobank into the category of the insolvent financial institutions was taken due to the fact that on May 12, an outflow of funds began in the bank from the accounts of legal entities and of other banks. At this, the National Bank notes that there was no withdrawal of assets to institutions related to a shareholder.
As a result of the outflow of customers` funds, which totaled about UAH 200 million through May 12-13, the bank on May 16 started experiencing problems with the fulfillment of obligations to customers, and as of May 20, the total amount of outstanding operations of bank`s customers exceeded UAH 500 million, or 9% of its obligations.
The National Bank stresses that Fidobank did not apply to the regulator for a recapitalization and on May 17, informed the NBU of the refusal of a potential investor to participate in recapitalization. Moreover, as the regulator stresses, on the results of a diagnostic examination conducted in 2015, the bank during four months reduced the necessary amount of recapitalization more than twofold at the expense of repayment of loans of major borrowers, reducing the amount of non-government securities, conversion of subordinated debt, capital contributions, and partial debt forgiveness by a shareholder.
According to the NBU estimates, 98%, or 97,700 depositors of Fidobank will get their deposits in full, because their size does not exceed the guaranteed amount of UAH 200,000 while the total amount of compensation will be about UAH 1.8 billion.
The regulator said that as of May 20, the ultimate owner of Fidobank is Oleksandr Adarich, who currently remains the owner of 50% of the shares of Eurobank. However, on May 18, the regulator agreed the transfer of these shares to a citizen of Kazakhstan Bolat Nazarbayev.
UNIAN memo. Fidobank (formerly – Agio bank, SEB Bank, Kyiv) has been operating on the Ukrainian market since 1991. More than 99% of shares belong to Oleksandr Adarich. Earlier this week, the Bank reported difficulties in performing customer transactions as a result of a minor liquidity gap, which was aggravated with the outflow of funds from customer accounts. The bank assured that it hoped to resolve the situation and stabilize operations.