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Tuesday, January 23, 2018

Care of the savings Bank will make Ukraine even poorer

Ukrainian nationalists put the Kiev authorities another ultimatum, this time they need to expel from the country the Russian Sberbank. The occasion was the message about the service Bank clients with passports of DNR AND LNR. It is unlikely that the nationalists could even imagine the enormous damage that will be caused to Ukraine in the implementation of this scenario.

The Ukrainian government seriously came up with the idea to expel from the country subsidiaries of Russian banks. The occasion was the message that Russian Sberbank started to serve customers in the passports of the DNI and the LC – and supposedly not just in Russia but also in Ukraine.

“And so we all fall apart, because nobody thinks about the future. And when you do not think about the future, you can continue to ruin everything”

Earlier, on 7 March, Sberbank and Gazprombank announced that it has started to serve clients on passports of DNR and LNR. They began to act on the basis of the presidential decree on the recognition of these documents. However, two of the largest Russian Bank has made it only two weeks after the decree, and only in Russia. In Ukraine, some have decided that their example was followed by the Ukrainian branch.

Interior Minister of Ukraine Arsen Avakov on Tuesday urged the government to initiate the NBU and the national security Council the issue of imposing sanctions against Sberbank. “The Bank operates in Ukraine, earning profits and invests in the separatist Republic. This is unacceptable,” – said the Minister.

This question, taken up by nationalists, were very quickly put to the highest level. Prime Minister of Ukraine Volodymyr Groysman discussed the issue with the President and the NBU. According to him, now being studied, whether there corresponds to reality information that the Ukrainian “daughter” of Sberbank serve customers with passports of DNR and LNR. And he immediately threatened to give Sberbank an “adequate response” if the information is confirmed.

Meanwhile, nationalists staged a rally near the national Bank of Ukraine with a demand to stop work of the “daughters” of Russian banks in the country. It was attended by about 150 members of the Ukrainian party “national body”, created on the basis natsbatalona “Azov”. In response, the national Bank was forced to assure that initiates sanctions against all Russian banks operating in the country. But again with the caveat – if these banks serve citizens with passports of DNR and LNR.

Meanwhile, the nationalists have already started to put a new ultimatum to the Ukrainian authorities. If after two weeks the Cabinet of Ministers of Ukraine decides on the closure of offices of the Ukrainian subsidiary of Russian Sberbank, the supporters of the blockade of Donbass will do it themselves, said one of the organizers of the blockade Anatoly Vinogrodsky. He urged all depositors of savings Bank of Ukraine to withdraw from the Bank your money, because two weeks later, they “still closed” branches of the credit institution, reports RIA “Novosti”.

Meanwhile the “daughter” of the Russian Sberbank said earlier that there were not served and do not intend to serve the citizens of the DNI and the LC, because, “as the Ukrainian commercial Bank, in carrying out its activities under the license of the NBU (the Bank) strictly adheres to the norms of Ukrainian legislation and serves clients exclusively on the basis of documents identifying them in accordance with the requirements of Ukrainian legislation”.

But the Ukrainian authorities do not believe Sberbank and threatened with death. Kiev can implement their threats, do not rule out Ukrainian economists – just because Ukrainian politicians have repeatedly harmed their own economy according to their ideological preferences.

“Theoretically, you can close it. We and everything is falling apart, because nobody thinks about the future, – said the newspaper LOOK the head of the Ukrainian analytical center Alexander Okhrimenko. And when you’re not thinking about the future, you can continue to ruin everything”.

If Kiev decides to stop working “daughters” of Russian banks, in particular Sberbank, the consequences for the Ukrainian economy will be disastrous.

First, the withdrawal of Russian banks in Ukraine face a crisis of financial-banking system, the collapse of the national currency and increasing probability of default, says Ukrainian economist Oleksandr Koltunovich. After all, the Ukrainian “daughter” of Sberbank ranks sixth by assets in the country. In General, the “daughter” of Russian banks are also included in the ten largest banks. According to Okhrimenko, the assets of the Ukrainian “daughter” of Sberbank 4% of the entire banking system, the volume of funds of legal entities – 2%, individuals – 3%, and the volume of loan funds – 7%. The Bank serves over 1 million private and corporate customers. By the end of 2016, the contributions of Ukrainians in Russian banks amounted to almost $ 1.4 billion and the loan portfolio was estimated 4.82 billion.

“Politics Jingo will lead to the fact that thousands of borrowers and depositors of Russian banks at risk of losing their money. Will the state compensate Ukrainians through the Deposit guarantee Fund their losses? Practice shows that there is,” says Koltunovich. Has long been payouts to Bank customers who have selected a license, lie on the shoulders of the Ukrainian budget with a huge gaping hole. Expenses from the departure as major players in the banking market, the country’s budget simply will not pull.

In addition, dozens, if not hundreds of thousands of employees of branches of Russian banks in Ukraine – and this is also Ukraine’s citizens will simply find themselves without work. So, in Ukraine there are 104 branches of Sberbank, almost 140 branches of VTB, about 300 branches of Prominvestbank and nearly 50 branch offices of BM Bank.

Finally, Ukraine’s economy will lose huge financial resources. After all, the same Sberbank is constantly capitalize its Ukrainian “daughter”, but it is not that other, as direct investment in financial sector of Ukraine. Largely thanks to the infusion of Russian banks in the Ukrainian branch of Russia at the end of last year it became the main investor in Ukraine. Russia invested nearly $ 1.7 billion is 38% of the total amount of investments into the economy of the country over the last year.

No influx of European or American direct investment, who promised on the Maidan, did not happen. Still such a risk to invest in Ukraine – is capable of almost exclusively Russian entrepreneurs.

One more important fact. Russian banks allow to simplify the already complex trade transactions between the two countries. And again, in spite of the slogans of European integration and anti-Russian sanctions, that trade with Russia brings Ukraine a significant part of foreign exchange earnings. Moreover, according to the Ukrainian customs statistics, in January – February this year Ukraine increased exports to Russia by as much as 54%.

“At a time when Ukraine needs more financial resources, the government should not stop the activities of international financial institutions, but rather to establish mechanisms to encourage and attract foreign capital in the Ukrainian economy”, – sums up Alexander Koltunovich.


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