Cyprus Mail
Cyprus

PrivatBank’s Cyprus unit caught in mother company’s turmoil

The decision of Ukrainian authorities on Sunday to declare PrivatBank insolvent, may have more effects on its operations in Cyprus, after the Central Bank of Cyprus decided on Wednesday to restrict its operations on the island.

The Cyprus Business Mail understands that the Central Bank of Cyprus continues to monitor the situation with PrivatBank which operates a branch in Cyprus.

Ihor Igor kolomoyskyy PrivatBankUkraine’s largest bank, mainly owned by Igor Kolomoyskyy (alternatively Ihor Kolomoisky), known for financing in 2014 a militia with private funds to fight rebels supported by Russia’s ruler Vladimir Putin, failed to raise its capital as it had been previously instructed by the National Bank of Ukraine, prompting the authorities’ decision to nationalise it.

The Cyprus branch of PrivatBank, which was fined in November €1.5m for violating Cyprus’s anti-money laundering and terrorist financing legislation, did not respond to requests for a comment. The fine is likely to have exceeded the branch’s balance sheet.

The branch, officially known as Public Joint-Stock Company Commercial Bank Privatbank, had in December 2015 a loan portfolio worth €880,662, with non-performing loans amounting to €501,009, or 57 per cent, according to a statement on its website. The statement provides no information about deposits in 2015.

In 2014, in which PrivatBank Cyprus generated a mere €579 in net profit, total customer deposits stood at €897,322.

The Central Bank of Cyprus said on Wednesday that it decided to restrict PrivatBank’s operations in Cyprus to the repayment or withdrawal of existing deposits, acceptance of payments towards existing credit facilities and repayment of administrative expenses related to the bank’s operations.

In May 2010, the council of ministers under former president Demetris Christofias, decided to grant Kolomoyskyy and Gennadiy Bogolyubov, co-owner in PrivatBank, the Cypriot citizenship. They are each worth $1.3bn according to Forbes.

The clean-up of Ukraine’s banking sector is part of the East European country’s $17.5bn bailout agreement with the International Monetary Fund.
Fitch Ratings estimated the Ukrainian bank’s non-performing loan ratio in June at 40 per cent of its total portfolio.

Related posts

Giving the lifeblood

Annette Chrysostomou

No more illegal camping in the Akamas, village leader declares

Staff Reporter

Paphos animal welfare charities feature in new UK documentary

Bejay Browne

The bikes are back in town

Annette Chrysostomou

Fatal crash leaves motorcyclist, 24, dead

Lizzy Ioannidou

Two arrested for improvised explosive device

Lizzy Ioannidou