Ukraine central bank gets tough with owners of private banks

KIEV (Reuters) Ukraine will closely track assets belonging to owners of banks to stop the offering of sweetheart loans to shareholders a practice canada goose factory sale that helped bankrupt 40 percent of the banking sector, a deputy governor of the central bank said.

A general view shows the National Bank of Ukraine in Kiev canada goose uk shop February 18, 2010. Picture Canada Goose Online taken canada goose clearance February 18, 2010. REUTERS/Konstantin Chernichkin

So far the regulator canadian goose jacket has been praised for its clean up of banks, required under a $17.5 billion IMF led bailout program, which since early 2014 has closed 70 insolvent canada goose store lenders that had become little more than canada goose coats personal piggy banks for their owners.

The progress made in revamping the banking sector is one of the rare bright spots canada goose uk outlet in Ukraine otherwise lackluster reform progress, which has stalled over political infighting Canada Goose sale and Canada Goose Outlet corruption allegations to the dismay of Kiev Western backers.

The central Canada Goose Jackets bank has now decided to analyze the business activity of the owners of Ukraine remaining 110 banks annually to increase the transparency and prudence of lending practices.

all the shareholders have some kind of business jacketstock and we will track and evaluate this so that in the case of any negative elements we can prevent risks developing, the central bank Kateryna Rozhkova said in an interview canada goose black friday sale with Reuters.

She pointed to the case of canada goose Bank Khreshchatyk, which went bust in uk canada goose April.

A postmortem of cheap canada goose uk the Canada Goose Coats On Sale bank buy canada goose jacket finances showed that over 80 percent of its loans were to its own shareholders, compared with the recommended limit canada goose coats on sale of 25 percent. Its two main owners controlled 60 percent of the company through offshore firms.

to shareholders is risky for a bank, because often the terms are not based on market conditions, without sufficient collateral, and if negative trends emerge these loans are not repaid, Rozhkova said.

Khreshchatyk could Canada Goose Parka not be reached for comment.

OFFSHORE OWNERS An cheap Canada Goose IMF backed program to diagnose the financial health of Ukraine 20 canada goose outlet largest banks, which account for 86.5 percent of the sector, was completed at the start of Canada Goose online 2016 and showed that non performing loans accounted for over 40 percent of their combined portfolio.

The central bank has now given the banks until Jan. 1 2019 to bring down lending to shareholders to 25 percent of capital, Rozhkova said.

It has also imposed new rules requiring owners of banks to establish supervisory boards of independent directors to monitor lending to shareholders and other beneficial transactions.

In 2015 the central bank managed to establish the main shareholders of almost all the banks, nearly a third uk canada goose outlet of whom are owned canada goose clearance sale through multiple offshore companies, according to Reuters calculations based on central bank data.

Understanding who owns what offshore will also help the central bank stem the flow of capital overseas, Rozhkova said.

Over the past two years buy canada goose jacket cheap $18 billion 60 canada goose uk black friday percent of foreign currency deposits was withdrawn from the banking system, causing a 65 percent fall in the national hryvnia currency.