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Ukraine to save some deposits of Ukrprombank

Published 10/22/2009, 10:03 AM
Updated 10/22/2009, 10:06 AM
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KIEV, Oct 22 (Reuters) - Ukraine's government will transfer the majority of consumers' deposits from troubled Ukrprombank to the newly nationalised Rodovid Bank, which will then have to be recapitalised further, the central bank said on Thursday.

The government has been mulling its options on Ukrprombank, the country's 28th largest, and Nadra Bank, 11th largest, since the start of the year, when they were placed under temporary administration.

In July, Prime Minister Yulia Tymoshenko said the government could not afford to save Ukrprombank and would instead transfer its liabilities and allow it to be liquidated. [ID:nLV75369] "Rodovid Bank will be given deposits worth 5.6 billion hryvnias ($700 million)," Central Bank Spokesman Serhiy Kruglik said.

"This means that the bank must receive either assets or capital of the same amount. The government must review its assets. If Ukrprombank does not have enough liquid assets, then financial support for Rodovid must be provided.

"The government can do this through recapitalisation," he said.

One analyst calculated from central bank figures that the government wants to transfer all consumers' deposits that are worth no more than 150,000 hryvnias -- the maximum amount that is protected by a government guarantee.

It is not yet clear what the government will do with the other 20 percent of consumer deposits, nor company deposits, and whether it planned to further recapitalise Rodovid.

Ukrprombank's total liabilities amount to 12 billion hryvnias ($1.5 billion).

Earlier, Deputy Finance Minister Oleksander Savchenko said Nadra could be nationalised briefly within a month and then sold off by next year to Russian investors. [ID:nLM84228]

The government spent a total of $1.26 billion nationalising Rodovid, 23rd largest bank, Ukrgazbank, 17th largest, and Bank Kyiv, 40th. (Reporting by Natalya ZInets; writing by Sabina Zawadzki; Editing by Rupert Winchester)

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