Oschadbank and Ukreximbank again decapitalizing

Ощадбанк и Укрэксимбанк снова докапитализируют

The Cabinet for the second time since the beginning of the year increases the authorized capital of banks.

The Ukrainian government decided to capitalize the state-owned Oschadbank and Ukreximbank 5.4 billion and 4.7 billion respectively. The decision was taken at a closed meeting of the Cabinet on March 6, according to the government website.

The increase of the authorized capital of banks will occur by issuing bonds of internal state loan in exchange for Bank shares. For the capital increase will be issued t-bills with a maturity of up to 15 years with a rate of return of 9% per annum.

“This decision will ensure further stable functioning and development of state banks, which is key to the protection of the rights of its depositors and other creditors of the Bank”, – stated in the explanatory note to the decision of the Cabinet.

Note, this is the second recapitalization of the two banks this year. In the result the authorized capital of Oschadbank needs to reach 43.7 billion hryvnia, and Ukreximbank – 38.7 billion hryvnia.

We will remind, on February 1 this year, the government has already taken a decision on capital increase Oschadbank and Ukreximbank, respectively, 3.5 billion and 3 billion respectively. However, if this scheme were involved in the 10-year t-bills with the indexed value (pegged to the dollar) and the rate of 6% per annum.