The Deposit Guarantee Fund Proposes the NBU Liquidate Platinum Bank

The Deposit Guarantee Fund proposes that the NBU liquidate Platinum Bank

The Deposit Guarantee Fund reported that it has applied to the NBU with a proposal to revoke the banking license of Platinum Bank and liquidate it effective 24 February 2017. This decision was made by the executive board of the Deposit Guarantee Fund for Individuals 20 February 2017.

Reported by the ANTYKOR portal citing media sources.

“Due to the start of liquidation and the need to prepare changes to the General Register of Depositors of Platinum Bank, the Deposit Guarantee Fund temporarily suspended payments under contracts whose terms expired before the introduction of the temporary administration.

Payments of the guaranteed compensation amount during the liquidation period will begin no later than 1 March 2017. They will be carried out in accordance with the law, that is, regardless of the contract deposit maturity date.

The procedure for payments will be announced additionally.

By decision of the Deposit Guarantee Fund dated 17 February 2017, the competitive procedure to remove the insolvent bank Platinum Bank from the market by the means provided for in Art. 39 of the Law of Ukraine “On the System of Guaranteeing Deposits of Individuals” was declared invalid.

The currency balance of PJSC PTB as of 11 January 2017 amounted to 7,43 billion UAH. In the assets, the bulk consisted of loans to legal entities with a carrying value of 2,8 billion UAH, loans to individuals – 3,02 billion UAH; in liabilities, deposits of individuals – 5,4 billion UAH, of which guaranteed by the Fund – 4,9 billion UAH,” the DGF statement said.

Additionally, according to the NBU, as of 01 January the volume of household deposits in Platinum Bank was 6,08 billion UAH. Thus, in the 10 days before Platinum Bank was declared insolvent, the corresponding deposit portfolio decreased by almost 700 million UAH (on 01 and 11 January the official exchange rate was 27,19 UAH/USD).

Reference

Recently, Deposit Guarantee Fund Managing Director Kostiantyn Vorushylin commented on Finbalance’s information regarding the reduction of consumer loans in Platinum Bank’s portfolio in Q4 2016 by 1 billion UAH:

“970 million UAH – these are consumer loans in Crimea, Donetsk and Luhansk regions. They were almost not serviced. The bank tried to sell these loans to one of the factoring companies. We believe that that deal did not close. We are rolling that portfolio back onto our balance. The deal was not completed, it did not take place,” K. Vorushylin said.

According to the head of the DGF, the retail loan portfolio of Platinum Bank contains about 1,2 billion UAH – “these are live assets we are working with.” “Of those, about 1 billion UAH are entirely without arrears, at most with arrears of 30-60 days. 970 million UAH, as I said, are dead loans,” Vorushylin noted.

He also reported that Tascombank and PUMB were looking specifically at the retail portfolio. “I cannot say whether the transaction will take place,” Vorushylin concluded.

In addition, Vorushylin stated that it was precisely corporate loans (of which 90% are insider) that “sank” Platinum Bank.

“They are effectively empty; there are no collaterals, and where there are, the quality of the collateral is very low. This portfolio effectively sank Platinum because it was either not serviced or serviced at understated interest rates. About 90% of this portfolio is insider. There is some real estate,” Vorushylin said.

As Finbalance wrote, the police are conducting a pretrial investigation in criminal proceeding No. 42016000000000885 regarding the embezzlement by officials of Platinum Bank of more than 1,1 billion UAH by entering into, from December 2013 to February 2014 (that is, during the period when K. Rozhkova was on the bank’s management board), loan agreements with TOV Titan-Pivden, TOV Kodos Invest, PP Logistic Trans, TOV Stratagema-Invest, TOV Osher, TOV FC Real-Invest and TOV FC Businessfinance with no intention by these business entities to perform the obligations. According to the investigation, the officials of these entities were controlled by persons related to Platinum Bank and showed signs of being fictitious.

In the materials of criminal proceeding No. 12015100000000334, related to the mentioned case, it was stated, among other things, that Platinum Bank issued loans for the purchase of goods (which were to become bank collateral) that were in fact not purchased; against securities whose trading had been suspended by the National Commission on Securities and Stock Market; against an asset complex whose expert valuation had been falsified…

There was such an episode in Rozhkova’s recorded conversation:

Rozhkova: regarding the refinancing. One of the assets – “Moldova,” which was valued at 500 million. “Risks” are ready to take it for 100 million. The future investment project was valued at 500 million. The valuation was stretched. And they did it by an income approach. They plan to build a “cottage town” there. There is a second method used for valuation — the land, but the problem is the land is leased.

Zinkov: “Colliers” is ready to quickly value “Moldova” at 120 million, but not at 80… We will work more so… I want it to be about 250-300 million. Then the rest will have to be added.”

As journalists of the channel “24” noted, “Moldova” is a sanatorium located on the Black Sea coast in Odesa, whose owner called himself Borys Kaufman. At the Moldova address, some forty companies were registered, “the bulk of which show signs of being fictitious.”

“It is no coincidence that they owed Platinum substantial sums. According to the investigation, with the help of such intermediaries the shareholders were able to withdraw more than a billion hryvnias. However, those at the ‘Moldova’ itself had no idea about the firms,” the “24” channel’s report said.

NBU Deputy Governor Kateryna Rozhkova reported that in November Platinum Bank was removed from the list of problem banks.

In October the NBU recognized Borys Kaufman as a person exerting significant influence over the management and activities of Platinum Bank and as a beneficial owner regardless of formal ownership (according to unofficial data, Kaufman had influence over the bank since the end of 2013 when its owners changed — incidentally with the participation of the ICU group, co-owned by Valeria Gontareva before her appointment as NBU governor).

Kaufman was also among the shareholders of Finbank during the period when Kateryna Rozhkova worked there (before moving to Platinum Bank). Currently the majority shareholder of Finbank is Oleksandr Granovskyi, Kaufman’s partner including in the hotel business.

In its statement on classifying Platinum Bank as insolvent, the NBU reminded that in August 2016 Borys Kaufman submitted a package of documents to the National Bank to approve acquisition of a substantial share in the bank of more than 75% through companies controlled by him. “The National Bank did not approve Borys Kaufman’s acquisition of the bank’s shares due to the non-submission of certain documents, in particular because the Antimonopoly Committee of Ukraine’s approval for concentration was missing. According to the National Bank, in December 2016 the Antimonopoly Committee returned without consideration the package of documents regarding Borys Kaufman’s acquisition of control in PJSC Platinum Bank,” the NBU statement said.

Former Director of the NBU’s Department of Registration Issues and Licensing Oleksandr Zavadetsky noted that, given the legal aspects, even if there were a theoretical desire (if there were one), the state would hardly be able to count on recovering from Borys Kaufman the funds that will be spent on payments to Platinum Bank depositors (4,9 billion UAH):

“If claims are brought against him, he exits the situation very elegantly, and quite lawfully. He can say that he does not know why the NBU recognized him as someone. Moreover, he wrote that he was only preparing to buy. The National Bank, for its own purposes, recognized him, but legally he bears no responsibility,” O. Zavadetsky observed.