NBU doesn't expect bankruptcy of Russian state banks' Ukrainian subsidiaries

First Deputy Governor of the National Bank of Ukraine (NBU) Kateryna Rozhkova says the regulator does not expect bankruptcy of Russian state banks' Ukrainian subsidiaries, namely Sberbank and Prominvestbank.

"Today, their liquidity is sufficient to continue work for reducing their balance sheets. We hope these banks will exit the market in another way," she told journalists on December 17, answering a question whether it is possible that the said banks would repeat the scenario of another Russian state bank's Ukrainian subsidiary VTB Bank, recognized by the regulator as insolvent.

Read alsoNational Bank recognizes Russian VTB's Ukrainian subsidiary insolvent

Rozhkova recalled that two large banks with Russian state-owned capital remained in the Ukrainian market, these are Sberbank and Prominvestbank.

Speaking about the possibility of foreclosure of the banks' assets by decisions of international courts against Russia's actions with regard to Ukrainian assets in Crimea, Rozhkova said that not all assets belonged to the owners of the banks, but assets without liabilities and depositors' funds.

"This is how the banking sector operates. Therefore, if we don't touch the legal side of the issue, but refer to economic terms, we cannot block the banks' assets, because they are not the assets of the owner. I hope that the court will be aware of this. By blocking assets, they simply paralyze [the banks'] operations, which can lead to negative consequences," Rozhkova added.

UNIAN memo. The sanctions imposed on Russian state banks' Ukrainian subsidiaries, including Sberbank, Prominvestbank, VTB Bank, and BM Bank, have been in effect since March 2017. They ban the withdrawal of capital in favor of the parent structures.

The National Bank on November 6 revoked the banking license of BM Bank, which decided to voluntarily terminate its banking activities.

The Deposit Guarantee Fund on November 28 introduced temporary administration at VTB Bank after the National Bank had designated the bank as insolvent.