Cyprus Mail
Business

Payment of customer deposits at PrivatBank Cyprus halted

By Stelios Orphanides

Ten days after the nationalisation of Ukraine’s PrivatBank, its Cyprus branch remains closed for business with depositors on Thursday unable to access their accounts, sources have said.

The government in Kiev, PrivatBank’s new owner, has halted the release of customer deposits in Cyprus even on small amounts.

A depositor at the bank who asked to remain anonymous said that the bank had kept its two branches shut on Monday, December 19 on “technical grounds”.

Ukraine’s government decided to nationalise the bank the weekend before citing the failure of the bank, previously mainly owned by Igor Kolomoyskyy, a holder of a Cypriot passport, to meet capital requirements.

The new owners of the bank have fired the general manager of PrivatBank Cyprus, Vladyslav Morgachov, and replaced him with Roman Skudarev, according to a source. PrivatBank Cyprus declined to comment and referred all queries to the mother company in Ukraine which did not respond to a Cyprus Business Mail emailed request for comment.

An official source in Nicosia with knowledge of the situation said that PrivatBank’s new owners are currently “in the process of carrying out audits to confirm figures in the bank’s balance sheet” before going ahead with releasing customer deposits.

“This may take a few days more,” the official said. “They may not start doing so before the end of the year”.

On December 21, the Central Bank of Cyprus said that it had modified PrivatBank’s licence, restricting it to “the repayment or renewal of existing deposits and the acceptance of payments towards existing credit facilities, and the repayment of administrative expenses relating to the operations of the branch”.

The official said that Cypriot authorities are awaiting the decision of PrivatBank’s new owners about their plans and whether consolidation measures will allow its presence to continue in Cyprus, operating with a licence of a branch of a non-European Union based bank. “We have to see what they are planning,” the official said.

The central bank’s press officer did not respond to the Cyprus Business Mail’s emailed request for a comment.

According to the bank’s December 2014 balance sheet, which is the latest published on PrivatBank Cyprus’s website, the lender had a total of €897.3m in customer deposits.

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