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Automatically translated version. May contain inaccuracies compared to the original.
Bank PUMB tries to recover 100 thousand USD from "Platinum Bank"
On 06 May, the Commercial Court of Kyiv opened proceedings on a suit by Bank PUMB against "Platinum Bank" to recover 100 thousand USD.
The court hearing is scheduled for 02 June.
As a third party to the case, LLC "Delta Finance" has been involved; it is registered in Odesa; its activity is rental and operation of own or leased real estate (primary) and “other forms of monetary intermediation”; the founder is Mykhailo Mykolaiovych Chernetskyi.
Recall that the company "MTS Ukraine" sued "Platinum Bank" over nonpayment of deposits totaling 250 million UAH. 24.12.2015 The Commercial Court of Kyiv satisfied the company’s claim and ordered the bank to return the funds. At the same time, 14.04.2016 the court, given the bank’s financial condition, partially granted "Platinum Bank"’s motion and granted a three-month deferral to comply with that decision — that is, until 14.07.2016. "Platinum Bank" requested a deferral until 31.10.2016.
Reference on "Platinum Bank"
As Finbalance wrote, Platinum Bank defaulted on an NBU loan. Ultimately the National Bank proceeded to restructure the related debt obligations. In addition, apparently "Platinum Bank" did not implement the recapitalization program approved by the NBU last year. Eventually the regulator approved a new bank recovery program.
According to an official statement by "Platinum Bank", after increasing capital by 101 million UAH in Q1, further capital injections of 470 million UAH are planned by the end of the current year. "The bank is increasing its charter capital in line with the approved development strategy. Funds are being directed by the bank to expand its core business, in particular to increase the volume of consumer lending," the institution assured.
As of the end of 2015 year, "Platinum Bank" estimated a cumulative liquidity gap for Q2–Q4 of 2016 year in the amount of 1,27 billion UAH (among other things, illustrating risks from depositor panic).
According to "Platinum Bank"’s reporting, its regulatory capital (unaudited, subject to analysis) as of 31 March 2016 amounted to 190,4 million UAH. And the regulatory capital adequacy ratio was 2,19% (with the required minimum of 10%). At the end of 2015 year these figures were respectively 280,34 million UAH and 3,44%.
According to "Platinum Bank", its loss in Q1 amounted to 59,8 million UAH (in Q1-2015 a profit of 57,3 million UAH was declared). Meanwhile its interest expenses exceeded interest income by 69,7 million UAH. Loan impairment provisioning for interest-bearing loans amounted to 25,6 million UAH.
For 2015 year the loss of "Platinum Bank" amounted to 523,9 million UAH (in 2014 year – 506,7 million UAH). Provisions for impairment of loans and funds in other banks fell almost 5 times – to 203,5 million UAH (from 1 billion UAH in 2014 year). Net interest expense (i.e., interest income was less than interest expense) last year amounted to 86,7 million UAH (while in 2014 year there was net interest income of 734,7 million UAH).
At the same time, in the audit opinion by LLC "Audit Firm 'Kadastr - Audit'" on "Platinum Bank"’s annual report for last year it is stated that provisions to cover the bank’s loan impairment should have been greater by 1,05 billion UAH. "The above affects the carrying value of loans, interest income on impaired loans, the bank’s financial result, equity and the bank’s regulatory capital," the auditors stated.
As Finbalance wrote, unofficially influence over "Platinum Bank" is "attributed" to Odesa businessmen O. Granovskyi and his partner B. Kaufman, who were allegedly "close" to the 'Family'. In this context it may be indicative that the current CEO of "Platinum Bank" is Kostiantyn Smolskyi, who previously led Finbank (read about Finbank’s ambiguous condition here and here). In addition, there was information about transfers of assets and liabilities from Finbank to "Platinum Bank". At the same time last year then-acting CEO of "Platinum Bank" Kateryna Rozhkova (today she is Deputy Governor of the NBU) denied Granovskyi’s and Kaufman’s involvement with "Platinum Bank" in a comment to Finbalance.
Recently the chairman of the supervisory board of "Platinum Bank" became Dmytro Zinkov – a minority shareholder of the institution, former CEO of Nadra Bank (he was dismissed from that position 04.02.2015 – a day before Nadra was declared insolvent).
As Finbalance wrote citing court materials, as of 18 April investigators from the Prosecutor General’s Office, within a criminal proceeding on embezzlement of Nadra Bank’s assets, were searching for former top managers of that institution as well as NBU officials who prepared and agreed the resolutions to provide refinancing to Nadra in spring 2014 year (at that time the head of the National Bank was Stepan Kubiv – now First Vice Prime Minister).
Meanwhile, Hryhoriy Hurtovyi remained on the supervisory board of "Platinum Bank"; he had previously chaired that body, being, on the one hand, a minority shareholder and, on the other hand, holding a power of attorney to exercise shareholder powers for a 100% stake. However, in early April the NBU officially reported that it recognized H. Hurtovyi as a beneficial owner of a significant participation regardless of formal ownership. As Deputy Governor K. Rozhkova had noted earlier, H. Hurtovyi long ago submitted a package to acquire 70% of "Platinum Bank"’s shares, and it was "in the final stage of approval." "But media reports about his arrest [in Israel] forced us to postpone the approval," the senior NBU representative stated.
In February it was reported that H. Hurtovyi was detained in Israel. It was noted that he is a majority shareholder of the Israeli investment company BGI. His detention and questioning were related to investigations connected with BGI’s 'daughters': the investment company B.S.D. Crown Ltd. and the Israeli food giant Willi Food. According to media, Hurtovyi was suspected of illegal use of funds of controlled companies and of providing false information about assets. At the end of February "Platinum Bank"’s press service told Finbalance that H. Hurtovyi "is in Israel, at home."
By the way, there was information about a criminal proceeding concerning dubious operations at "Platinum Bank" in which Kateryna Rozhkova allegedly figured. However, she assured that this information is not true.
However, as Finbalance wrote, according to materials of the Ternopil City District Court of Ternopil region, Platinum Bank and Finbank (and, by the way, Avangard Bank, one of whose co-owners before appointment as NBU governor was V. Gontareva) were listed among banks where accounts were opened for companies under investigation by the State Fiscal Service in the context of possible facilitation of tax minimization by real sector businesses, in particular LLC "TK 'Megapolis-Ukraine'". The matter concerned 254 million UAH.
Reference on Bank PUMB
As Finbalance wrote, according to PUMB’s reporting, its loss in Q1 was 265,4 million UAH (in Q1-2015 – 348,7 million UAH), while for the full last year – 1,75 billion UAH.
Provisions for loan impairment amounted to 599,2 million UAH (in Q1-2015 – 1,59 billion UAH). Additionally, in January–March PUMB wrote off nonperforming loans totaling 1,14 billion UAH. Loss from refinancing individuals’ FX mortgages into hryvnia consumer loans of 97 million UAH caused a loss of 15,3 million UAH for the bank.
Net interest income – 381,3 million UAH (in Q1-2015 – 564 million UAH); net fee and commission income – 214,9 million UAH (in Q1-2015 – 240,1 million UAH); positive result from FX trading – 106,7 million UAH (in Q1-2015 – 394,8 million UAH); negative result from exchange rate differences – 1 million UAH (in Q1-2015 – there was a "plus" 893,3 million UAH).
The regulatory capital adequacy ratio was not disclosed by PUMB in its quarterly IFRS reporting. According to unofficial data, at the end of March it was 6,8% by national accounting standards, while the NBU requires 10% (without crisis relief measures).
Recently the bank’s CEO Serhii Chernenko said the bank committed to the NBU to increase capital by 1,28 billion UAH by 01 September. "This can be either a direct capital increase or funds obtained from work on problem debt," the banker clarified. "A letter signed by the shareholders committing to this had to be submitted to the National Bank. Such a letter exists," Chernenko stated. Importantly: the main business structures of Rinat Akhmetov – DTEK and Metinvest – are currently in a difficult financial situation (more details here).
According to unofficial NBU data cited by the newspaper Dzerkalo Tyzhnia. Ukraina, the maximum credit risk exposure norm for related-party transactions (should be no more than 25% of regulatory capital) at PUMB "exceeds the bank’s capital several times." At the same time, by that unofficial statistic, PUMB’s regulatory capital as of 01.04.2016 was 2,32 billion UAH.
PUMB’s CEO Serhii Chernenko acknowledged that his institution "has breaches of the related-party limit," and said that "the National Bank approved a three-year schedule to reduce the share of loans to related parties," which PUMB intends to "strictly follow." Chernenko did not specify the exact value of the limit.
At the end of Q3-2015 PUMB in its reporting cited the figure 19,68%. However, apparently the bank is gradually worsening its assessment, as some other market participants eventually do.
"In 2015 year legislative requirements changed, expanding the list of criteria for recognizing transactions with related parties. Because of this we had long negotiations with the NBU about who falls under this wording. According to the NBU’s new understanding, business partners of shareholders essentially fall into the category of related parties. We understand that giants like Metinvest or DTEK (Rinat Akhmetov’s metallurgical and energy holdings) have many partners," Chernenko stated.
In May 2015 year (when the "old" rules for assessing insider loans were still in effect) PUMB Deputy CEO Fedot Yeremenko told Finbalance that PUMB "does not lend to DTEK and Metinvest enterprises both due to limits on insider lending and because these holdings prefer to raise financing on external markets."
In the context of Chernenko’s remarks about lending to an owner’s partners, add that, as Finbalance wrote, PUMB seeks to recover, among other things, 1,15 billion UAH from the Amstor retail chain, which is controlled by Vadym Novynskyi — a junior partner of Akhmetov (the ultimate beneficiary of PUMB) in Metinvest.
In the reporting for 2015 year prepared under IFRS, PUMB noted that "when considering each possible case of relationships with related parties, the substance of those relationships is taken into account, not only the legal form."
At the end of March 2016 year the volume of loans to "entities under common control" was estimated by the bank at 1,6 billion UAH (at the end of 2015 year – 1,52 billion UAH, at the end of 2014 year – 1,69 billion UAH). Last year "entities under common control"–related parties were granted loans totaling 728,7 million UAH, while the amount of repaid loans was 1,2 billion UAH, and "other changes" – 302 million UAH.
Looking at the relevant tables at the end of the piece, also note the sectoral structure of PUMB’s overall loan portfolio as of the end of 2015 year, including indebtedness in mining, metallurgy, trade, agriculture, transport, telecoms, etc., in which, as is known, both structures owned solely by R. Akhmetov and those he owns in partnership with others (including the aforementioned V. Novynskyi) operate.
If PUMB really made loans not only to companies directly and indirectly related to its owner, it turns out that Akhmetov’s bank finances, among others, his competitors, as paradoxical as that may sound.
A separate aspect to note in the tables is funds that related parties place with PUMB, which directly reflect its dependence on their financial condition (availability of free liquidity). This issue is especially delicate given defaults by, in particular, DTEK and Metinvest and attempts to restructure billion-dollar debts. PUMB states that at the end of 2015 year the amount of such "insider" funds reached 4,84 billion UAH (at the end of 2014 year it was even more – 7,08 billion UAH).
In sectoral breakdown among PUMB depositors again are trade, transport, metallurgy, mining, and energy. By the way, recently Fitch noted that a significant portion of DTEK’s funds are held precisely at PUMB.
finbalance.com.ua
Document: PDF proof of the original version of the news item "Банк ПУМБ намагається через суд стягнути з "Платинум Банка" 100 тис дол". It records the publication content at the moment of the first scan, the preservation date and the source: ANTIKOR.
