The government plans to sell a 7% stake in PrivatBank through “Diyu”: what economists are saying
3 February 18:17
ЕКСКЛЮЗИВ
The Ukrainian government is preparing to sell a 7% stake in the state-owned PrivatBank to Ukrainians via the “Diya” app. According to preliminary details, the plan is to offer 51.5 million shares for sale at a starting price of 300 UAH per share. The expected proceeds are approximately 18 billion UAH.
In a comment to "Komersant Ukrainian", economist Oleg Getman views the initiative as a step toward the bank’s full privatization.
“I haven’t seen such practices in Ukraine before. Is it worth buying PrivatBank shares? Probably yes. This is a step toward PrivatBank being fully privatized. These plans have been in place for several years. So, in principle, selling even 7% is a step in the right direction,” he noted.
“One of the most profitable banks”
According to Getman, despite being state-owned, PrivatBank maintains a strong financial position.
“It remains one of the most profitable banks, despite state management. It has sufficiently high-quality corporate governance, so it generates profits and will continue to generate significant profits, and it accounts for nearly 50% of the entire banking sector. It is the largest bank in Ukraine. So, perhaps—yes, it’s worth buying, it’s worth selling,” the economist added.
State-owned banks and obligations to partners
Economist Oleg Pendzin emphasizes that the Ukrainian banking sector remains excessively state-controlled.
“At present, the state’s presence in the banking sector exceeds 60%. The largest banking institutions today are state-owned. This is unacceptable. It is, by and large, the only sector that currently has such a high presence of state capital,” he stated.
He also recalled Ukraine’s international commitments regarding the privatization of state-owned banks.
“We have certain obligations to our partners regarding privatization in this sector. Issues regarding the corporatization and sale of shares in Oschadbank were considered, and there were discussions about Exim. But during wartime, it is difficult to expect serious investors,” the economist noted.
Minority stake and troubled assets
According to Pendzin, the sale of a 7% stake does not give buyers any real influence over the bank’s operations.
“7% represents minority shareholders who will certainly have no influence whatsoever. The bank has a pile of non-performing loans and assets that are a huge burden on the balance sheet. At the same time, you won’t find a detailed balance sheet for PrivatBank anywhere,” he said.
He also mentioned the court ruling in the case against the bank’s former owners.
“In the High Court of London, Kolomoisky was ultimately ordered to pay PrivatBank approximately $3 billion. But that money has been siphoned off; the bank has effectively lost that amount, and there is no hope of getting it back,” the economist noted.
Comparison with deposits and government bonds
Pendzin emphasizes that a potential investor should evaluate PrivatBank’s shares through the lens of alternative investments.
“There are deposits and government bonds that are not subject to personal income tax or the military levy and have high liquidity. The state will honor them in any case,” he explained.
The key issue, according to Pendzin, remains expected returns.
“I invested 300 hryvnias—what exactly do I get in a year? I have no influence over the bank’s management, and I don’t receive any benefits as a client. This raises the question: why would I do this? Until PrivatBank explains why investing in its shares is more profitable than investing in government bonds through the same bank, I don’t think anyone will buy them,” the economist concluded.
