PrivatBank has increased its regulatory capital by USD 220 mln due to a successful deal on subordinated debt maturity extension on international markets. The deal allowed PrivatBank to increase its capitalisation and improve its capital adequacy to nearly 12% (11.87%). The minimum capital adequacy ratio established by the National Bank of Ukraine (NBU) is 10%.
“Almost all investors voted for the transaction extension – declared Chairman of PrivatBank’s Board Olexandr Dubilet. – The deal is great and favourable for the bank, actually we are talking about UAH 10 bln! More than UAH 5 bln of these funds will be included in the bank’s capital.”
According to the NBU, the increase in equity due to deal with international investors will allow PrivatBank to fulfill the capitalisation program agreed with the central bank. The program is based on the results of stress tests conducted as part of agreements between Ukraine and the International Monetary Fund.
“Moreover, I can say that the bank had to inject UAH 8.2 billion following stress testing and the bank complied with this program,”- said Governor of the Board of the NBU Valeria Gontareva.
Major international partners welcomed the increase in the capitalisation of PrivatBank. They noted that it opens up new opportunities not only for the bank but also for the whole Ukrainian financial market.
“Visa has been actively cooperating with PrivatBank for almost 20 years. We are proud that we, together with PrivatBank, were the first to offer Ukrainian consumers a range of new payment products and solutions, including money Visa card-to-card transfers, “Verified by Visa” service and the first mPOS mobile terminals, – remarked Mandy Lamb, Visa General Manager for CIS and Southeastern Europe. – The Ukrainian market offers significant opportunities for the development of electronic payments and innovations, and we are going to collaborate with PrivatBank further to provide Ukrainian consumers with new payment solutions.”
On November 13th, international investors accepted PrivatBank’s proposal on extension of a syndicated loan that will allow the bank to use raised funds to increase regulatory capital, which including the bank’s shareholders’ investments will total USD 220 mln. Moreover, successful negotiations with creditors will allow to extend the bank’s USD 200 mln Eurobonds’ maturity until 2018. Thus, PrivatBank has received UAH 10 bln of support from international investors.