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Bakhmatyuk Offered to Inject 200 m Dollars into VAB Bank Only to See Its Assets Sell for 8m

Oleg Bakhmatyuk, the agricultural businessman and former shareholder of VAB Bank, reveals that systemic Ukrainian banks could have been rescued in the ‘bank fall’ of 2014-2017 but the former NBU governor, Valeria Gontareva, wouldn’t allow it

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Oleg Bakhmatyuk talks about that in an interview to the TV journalist Dmytro Spivak of Channel 112, as reported by Ukrainian News.  

According to him, the demise of those Ukrainian banks caused Ukraine’s economy to shrink by 20%, while their assets were auctioned off by the Deposit Guarantee Funds for cents on the dollar.

The businessman reveals that a civilised bank resolution plan was on the table during meetings with the then President Poroshenko. While everyone except Gontareva supported the idea, the plan was never implemented, which inflicted huge damage on the economy.

"There was a meeting concerning VAB Bank in Poroshenko’s office. A protocol was signed by me, Minister of Finance Shlapak, Prime Minister Yatsenyuk, Gontareva’s first deputy Pysaruk and Gontareva herself. The meeting was also attended by the then CEO of Ukrgazbank Kyrylo Shevchenko. We were discussing an idea, which I think could have been used as a blueprint for systemic bank resolution (VAB Bank was a systemic bank). As a shareholder, I offered to give up the whole bank to Ukrgazbank, I would then put 200 million dollars, being the estimated value of my loans, into a deposit account with Ukrgazbank. Ukrgazbank would then try its hardest to work out VAB’s assets against my guarantees of repaying the funds as a shareholder. That would have been a civilised exit strategy for a shareholder’, explains the businessman, ‘Everyone was for it, except Gontareva. What we got in return was the destruction of our bank. Four years later, the Deposit Guarantee Fund sold the bank’s total assets for 8 million dollars.’

Just as a reminder, as a result of the so-called ‘bank fall’ of 2014-2017 some 90 Ukrainian banks were removed from the market. The then executive director of the Deposit Guarantee Fund, Konstantyn Voroshilov, admitted that up to 40 financial institutions could have avoided insolvency. In particular, according to the official, if the NBU had shown commitment, Bakhmatyuk’s and Zhevago’s banks could have been rescued.

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