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You're reading: Arbuzov: Government-controlled Bank Kyiv to be divided

Bank Kyiv which is under control of the government, will be divided between other banks recapitalized using budget funds, indicating the effective collapse of attempts to rehabilitate the bank via money injections by the state. 

“The non-working part of assets of the bank [Bank Kyiv] will be transferred to the bank of bad assets for state banks created on the basis of Rodovid [Bank]. The living part of business will be joined to Ukrgasbank,” National Bank of Ukraine (NBU) Governor Serhiy Arbuzov said in an interview with the Dzerkalo Tyzhnia Ukraine weekly newspaper.

Bank Kyiv was founded in 1993. The government obtained control over the financial institution during the realization of an anti-crisis program on recapitalization of banks: the government spent UAH 3.565 billion to replenish its capital. As of early April 2102, the Finance Ministry held a 99.9369% stake in the bank.

Arbuzov also said that over the seven months ending July 31, 2012, the banks wrote off Hr 43 billion in bad credits.

He expressed alarm at the situation with the court enforcement actions.

“We’re also alarmed at the situation in the court enforcement action area. It’s rather unsatisfactory, as banks lose up to 50% of the collateral value after the forced sales of property seized under court rulings, and banks are left with unpaid credits and clients with unpaid debts,” Arbuzov said.

“A realistic measure to improve the system is ensuring the punishment of judges for not observing proper procedure when hearing a case, and for issuing unjust rulings,” he added. 

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