Privatisation of state-owned banks: Rada adopts the law

At its meeting on September 19, the Verkhovna Rada passed a law regulating the privatization of state-owned banks, as announced by MP Yaroslav Zheleznyak of the Holos party.

The bill was supported by 260 MPs.

The law includes a provision that allows for the sale of any state stake in a bank, not just 100% of the state’s shares. According to Ekonomichna Pravda, the law:

• Expands the range of potential investors the state is willing to consider for the sale;
• Increases the requirements for legal entities that the state can engage as financial advisers for the sale;
• Involves international donors in the selection of financial advisors and in the sale itself;
• Updates the rules for determining the price and conducting the auction, aligning with World Bank recommendations;
• Accounts for the possibility of only one potential investor participating in the auction;
• Aligns the sale and purchase agreement requirements with market practices;
• Prevents former beneficial owners or current minority shareholders from negatively influencing the sale process (e.g., halting the sale).

The law also mandates that the privatization of state-owned banks must be conducted through the Prozorro system.

State-owned Banks in Ukraine

The state of Ukraine currently owns seven banks:

• Oschadbank
• Ukreximbank
• Ukrgasbank
• PrivatBank (nationalized on December 18, 2016)
• Sens Bank (nationalized in July 2023)
• First Investment Bank (PINbank), previously owned by Russian businessman Yevgeny Giner
• Motor-Bank, previously owned by Vyacheslav Boguslaev, president of Motor Sich

According to Prime Minister Denys Shmyhal, the government currently has no strategy for the sale of Oschadbank and Ukreximbank, but it is considering allowing private investors to enter Ukrgasbank and Sens Bank.