The European Bank for Reconstruction and Development EBRD is strongly supportive of the decision of the Ukrainian government to nationalise PrivatBank and to protect the bank’s depositors, both individuals and businesses.

EBRD President Sir Suma Chakrabarti said: “The long-term stability of PrivatBank, the largest bank in Ukraine, is crucial to the country’s economic health. We believe the decision to nationalise it is the right one and have offered our expertise to the authorities whenever it is needed.

“We strongly support the National Bank’s continuing efforts to reform the banking system in Ukraine and ensure good governance across the industry.”

The nationalisation which took place with the cooperation of existing shareholders will be combined with adequate recapitalisation and liquidity back-up provided by the authorities to ensure the bank’s stable financial position and operation.

Francis Malige, EBRD Managing Director for Eastern Europe and the Caucasus, said: “A systemic bank of this magnitude could not be allowed to fail. Nationalisation of systemic banks allowed many developed countries protect their economies during the global financial crisis and it is the right way forward for Ukraine now.”

The EBRD is the largest institutional investor in Ukraine and has provided debt and capital financing for several Ukrainian banks during the crisis to support stability of the banking system. The EBRD has also advised the government and the National Bank of Ukraine on a number of policy and regulation issues relating to banking system reform, including legislation on related party lending.

In the case of Privatbank, a respected Western firm that is well known to the EBRD will be advising the Ukrainian authorities in the bank’s management and transformation.

Source: EBRD statement