EU statement on PrivatBank: We support NBU efforts to reform Ukraine’s financial sector

The relevant statement of the European Union regarding PrivatBank was posted on Facebook page of the Delegation of the European Union to Ukraine.

“We continue to support the efforts of the NBU to reform Ukraine’s financial sector, including by introducing prudent corporate governance principles, and the Ministry of Finance’s efforts to reform corporate governance in state-owned banks,” reads the statement.

The EU representative office noted that it is important that the government continues efforts to recover losses from former owners and related parties of failed banks.

“Prosecution and judicial proceedings should make full use of the findings of the Kroll report, commissioned by the NBU. Ukraine’s international partners will be closely monitoring developments in this area,” reads the statement.

The EU reminded that Ukraine’s international partners in 2016 supported the decision of the government and the NBU to nationalize PrivatBank, at the request of former owners, “as the only effective method of protecting the bank’s depositors – the Ukrainian people and businesses – and the stability of the financial system.”

“While this required the injection of about UAH 160 billion in Ukrainian taxpayer funds to restore the bank’s solvency, it secured PrivatBank’s long-term viability, safeguarded the money of millions of Ukrainian citizens, and strengthened the country’s economic health,” reads the statement.

The EU representative office also added that in this regard, they welcome the reform of Privatbank’s corporate governance, led by an independent Supervisory Board, as well as “the transformation of its business model, which has already resulted in stronger performance and sustainability of the entire banking system”.

On April 18, Kyiv District Administrative Court, having considered in a court session the case on a lawsuit by Ihor Kolomoisky against the National Bank of Ukraine, the Cabinet of Ministers of Ukraine, the Deposit Guarantee Fund and the National Commission on Securities and the Stock Market, ruled illegal the decision on the nationalization of PrivatBank.

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