Zelensky consents sell-off of Ukrainian state banks
Date
10/20/2024 5:14:52 AM
(MENAFN) Ukrainian President Vladimir Zelensky has taken a significant step towards the privatization of state-owned banks by signing a new law aimed at reducing the government's presence in the banking sector. This legislative move, which was published on the Verkhovna Rada's website on Thursday, is part of Ukraine's broader strategy to meet international financial requirements, particularly those set by the World bank and the International Monetary Fund (IMF).
The law, adopted by the Rada on September 19, is designed to facilitate the sale of state-owned banks, a condition for Ukraine to secure crucial loans from the World Bank and to unlock further tranches of its $15.6 billion IMF loan program. According to local media reports, MP Yaroslav Zheleznyak emphasized that the legislation will help attract potential investors by broadening the pool of interested parties. Notably, the new regulations allow for the sale of any state share in a bank, rather than exclusively selling 100% of the shares.
In addition to expanding the investor base, the law updates procedures for setting prices and conducting auctions, aligning them with the World Bank's recommendations. One significant change includes prohibiting the participation of former shareholders in the privatization process, ensuring a fresh start for prospective investors.
The law applies to all state-owned banks, including major institutions like PrivatBank and Ukrgasbank, as well as smaller entities such as Sense Bank, PINbank, and Motor-Bank, which were nationalized after 2022. However, two banks, Oschadbank and Ukreximbank, are reportedly exempt from this privatization initiative.
Andrey Pyshny, the Governor of the National Bank of Ukraine (NBU), indicated that Sense Bank and Ukrgasbank are priorities for the initial phase of the privatization process. A consultant will be engaged to identify the best options for these banks, marking a strategic approach to attract investment and stimulate economic growth.
This move comes as part of a larger "Privatisation-2024" project unveiled by the State Property Fund of Ukraine in July, which aims to entice strategic investors and revitalize the country's economy through the privatization of state-owned assets. As Ukraine navigates its ongoing economic challenges, this privatization initiative could prove essential in fostering growth and stability.
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