Assets of liquidated Ukrainian banks were sold for only 23% of their estimated value – audit data
3 December 2024 11:35
The Deposit Guarantee Fund and its authorized persons sold the assets of insolvent and liquidated banks at a significantly lower price compared to their book value and even their appraised value. This was stated by the Head of the State Audit Service of Ukraine, Alla Basalaeva, based on the results of an audit conducted at the Deposit Guarantee Fund, "Komersant Ukrainian" reports.
According to her, this situation has led to a shortfall of tens of billions of hryvnias in full receipt by depositors and other bank creditors.
What state auditors found
As of early April 2024, 54 insolvent banks were in the process of liquidation. The sale of property (assets) by the liquidators of banking institutions was carried out at open tenders (auctions) through the electronic trading system Prozorro.Sale and foreign electronic platforms.
The carrying value of the assets of insolvent banks sold amounted to UAH 631.2 billion. However, their estimated value was determined at UAH 92.3 billion.
However, as Alla Basalaeva noted, “even with such funds, the liquidators were unable to sell the banks’ assets. In fact, they received only UAH 21.2 billion. That is, the sale price of banking assets amounted to only 3.4% of their book value and 23% of their estimated value.”
Why assets are sold so cheaply
The State Audit Service emphasizes that one of the main problems in the sale of assets is the depreciation of their value.
For example, a pool of assets of three banks was sold for only UAH 124.6 million, while the estimated value of only one business center in the regional center was UAH 228 million.
“Such a sale of assets of insolvent banks resulted in the banks’ inability to repay the full amount of funds to legal entities, including the Deposit Guarantee Fund. This, in turn, resulted in the DGF writing off UAH 47.5 billion of receivables from banks that had terminated their registration as legal entities. Thus, a significant amount of bank debt and the current trend of its write-off deprives the DGF of the opportunity to fully repay its obligations,” the Head of the State Audit Service emphasized.
At the same time, the State Audit Service reminded that according to the law, the main task of the DGF is to guarantee the return of deposits to each depositor in the event of a bank liquidation. It is for this purpose that the assets (property) of insolvent and liquidated banks are sold.
The audit materials were submitted to law enforcement agencies.
