Ukrainian bank on the verge of collapse: Cominvestbank declared insolvent
6 December 2024 06:24
The Board of the National Bank of Ukraine has decided to classify Commercial Investment Bank JSC as insolvent. This was reported by "Komersant Ukrainian" with reference to the NBU press service.
The decision was made in connection with the failure of Cominvestbank to bring its activities in line with the requirements of the law, including the regulations of the National Bank, the report said.
In August, the NBU classified Cominvestbank as a problem bank due to its risky activities that threatened the interests of depositors and creditors. At that time, the NBU identified a number of problems, including manipulation of financial statements to conceal the bank’s real financial position.
According to the NBU, Cominvestbank’s assets amounted to UAH 1.3 billion (highly liquid assets – UAH 890 million), capital – UAH 349 million, and liabilities – UAH 980 million. The bank’s market share amounted to 0.04% of all assets of solvent banks as of November 1, 2024, and its classification as insolvent will not affect the stability of the Ukrainian banking sector, the NBU said.
The main shareholder of Cominvestbank is Volodymyr Hisem, who runs the Uzhhorod Cognac Factory and, according to public registers, is its beneficial owner.
According to YouControl, 42% of the bank’s shares are owned by the Uzhhorod Cognac Factory (the company is in a state of liquidation), Latut LLC, and Plodovoch-Uzh LLC.
What will happen to the bank’s depositors?
The regulator noted that each depositor of Cominvestbank will receive compensation from the Deposit Guarantee Fund in the full amount of the deposit, including interest accrued as of the end of the day preceding the day of the start of the bank’s withdrawal from the market, except as provided for in part four of Article 26 of the Law of Ukraine “On the System of Guaranteeing Individual Deposits”.
As of November 21, 2024, the total possible amount of the guaranteed amount to be paid to the depositors of Cominvestbank is UAH 432 million.
As of December 4, 2024, the bank’s highly liquid assets, including government bonds and certificates of deposit, amounted to UAH 890 million.
It is worth noting that the assets of insolvent banks are sold by the Deposit Guarantee Fund at auctions at prices that are significantly lower than their book value and even their appraised value. As of early April 2024, 54 insolvent banks were in the process of liquidation.
The carrying value of the assets sold by insolvent banks amounted to UAH 631.2 billion. However, their estimated value was determined at UAH 92.3 billion.
