The Board of the National Bank of Ukraine has decided to withdraw the systemically important Sens Bank (formerly Alfa-Bank) from the market and has submitted a proposal to the Cabinet of Ministers to have the state participate in this procedure.
According to Censor, based on the NBU’s decision, the bank will introduce a temporary administration of the Deposit Guarantee Fund on Friday, July 21, the regulator’s press service reports.
“During the temporary administration, services for individuals will operate as usual, without additional restrictions from the Deposit Guarantee Fund. Payments from legal entities will also be accepted without restrictions“, the NBU said.
They added that after the Cabinet of Ministers decides on the state’s participation in the bank’s withdrawal from the market, the temporary administration will last no more than two days.
The National Bank reminds that the owners of direct substantial participation in the bank are ABH Ukraine Limited (Cyprus) and ABH Holdings S.A. (Luxembourg), the owners of indirect substantial participation are Mikhail Fridman, a citizen of Russia and Israel, Peter Aven, a citizen of Russia and Latvia, and Andrey Kosogov, a citizen of Russia, who are the key owners of Sens Bank.
At the same time, Friedman and Aven’s ties to Russia and their support for actions and policies that threaten Ukraine’s territorial integrity, sovereignty and independence pose a significant reputational risk and have a material adverse effect on the bank’s operations.
This is evidenced by the dynamics of certain performance indicators of Sens Bank.
“The deterioration in the payment discipline of the Bank’s borrowers affected the regulatory capital of Sens Bank JSC, which decreased by 50% between March 1, 2022 and July 1, 2023, while in other systemically important banks it increased by 29%,” the NBU said.
At the same time, the NBU points out that due to the sanctions imposed on them, the owners of Sens Bank are unable to fulfill their obligations to maintain a sufficient level of capital on an ongoing basis and to take timely measures to prevent the bank’s insolvency, which poses a threat to the interests of depositors and other creditors of the bank.
“Under such conditions, in accordance with the requirements of the Law “On Banks and Banking Activities”, the National Bank is obliged to decide to withdraw the systemically important Sens Bank from the market,” the NBU added.
