The National Bank of Ukraine started the New Year by closing another bank, declaring Platinum Bank insolvent on Jan. 10. At one time it was Ukraine’s 22nd largest bank in assets.
The central bank reported that Platinum Bank had failed to meet recapitalization requirements reached in June. The Deposit Guarantee Fund is obliged to pay out Hr 4.8 billion to the 97 percent of Platinum Bank depositors whose deposits do not exceed Hr 200,000 (approximately $8,000.)
“The money should be paid back by associated people, not by taxpayers – but for that the NBU has to do work to identify the associated people,” former director of the department of registration and licenses at the NBU, Oleksandr Zavadetskiy, told the Kyiv Post on Jan. 11.
According to Zavadetskiy, he lost his job at the central bank in October for refusing to sign documents related to Platinum Bank. He said that the NBU’s deputy head, Kateryna Rozhkova, was aware that Platinum was failing to pass its stress tests, but that she still helped the bank to continue to attract deposits for six months after the terrible financial condition became known.
Rozhkova had not replied to a request for comment by the time this story went to press.
The problems in Platinum Bank became public in June when it was requested an injection of capital from the NBU. The bank’s ownership was called opaque, after which Odesa businessman Boris Kaufman (also the owner of Focus media) and Hryhoriy Hurtoviy said they owned 75 percent of the institution.
In December, the bank complained it was being subjected to an information attack in the media. To demonstrate its solvency, it increased its capital by Hr 203 million in 2016, according to a statement from the bank. It also stressed that the capitalization plan would run until 2019. As a part of the capitalization program, the NBU provided the bank with Hr 120 million in recapitalization funds in December.
Besides having an opaque ownership structure, the bank has connections to staff at the NBU. In recordings published online in November, Rozhkova can be heard discussing with the head of Platinum Bank, Dmytro Zynkov, the possibility of rescinding the bank’s problematic status in order to allow it to continue to accept deposits. Rozhkova headed Platinum Bank before joining the NBU in June 2015. She took up her position at the NBU in December 2015.
Rozhkova later admitted that the recording was authentic, though stressing that similar conversations are conducted with every problematic bank. Central bank governor Valeria Gontareva has defended Rozhkova, calling the release of the recordings a “manipulation” in an interview with Ukrainian television’s ICTV Channel on Dec. 19.
Today, Zavadetskiy said that the biggest question is why taxpayers should fund the deposit paybacks, rather than the persons identified as being associated with the bank, as required by law. According to the legislation, before declaring a bank insolvent, the NBU should determine the associated actors and then seize their assets to cover deposits.
Based on the released recording, Rozhkova is one of these associated persons, Zavadetskiy said. According to him, the NBU has never identified associated people to cover returns of deposits in cases of a bank being declared insolvent.
Over the past two years, the NBU has closed 84 out of the country’s 180 banks. Besides declaring banks as insolvent, the regulator in December nationalized Ukraine’s biggest bank, PrivatBank, placing it under the ownership of the Ministry of Finance.
