HOUSE_OVERSIGHT_026140.jpg
2.04 MB
Extraction Summary
2
People
10
Organizations
4
Locations
2
Events
2
Relationships
3
Quotes
Document Information
Type:
Business proposal / investment analysis / briefing memo
File Size:
2.04 MB
Summary
This document appears to be page 7 of a business proposal or investment memo regarding the Ukrainian banking sector. The author proposes acquiring a profitable bank in Ukraine to capitalize on projected economic growth, analyzing the competitive landscape which is dominated by state-owned banks (52% share) and retreating Russian government-owned banks (8.4% share). The document discusses specific banks like Sberbank, VTB, and FUIB, and assesses the difficulties of privatizing state banks.
People (2)
| Name | Role | Context |
|---|---|---|
| Mr Akhmetov | Associate/Owner |
Mentioned in relation to FUIB (First Ukrainian International Bank).
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| Unnamed Author | Proposer |
Uses first-person ('I would propose', 'I believe') to outline the banking acquisition strategy.
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Organizations (10)
| Name | Type | Context |
|---|---|---|
| NBU |
National Bank of Ukraine; imposing sanctions and approval authority.
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| Sberbank |
Russian government owned bank leaving the market.
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| VTB |
Russian bank controlling VTB and BM Bank in Ukraine.
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| BM Bank |
Controlled by VTB.
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| Prominvestbank |
Russian bank announcing departure.
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| Norvik bank |
Latvian bank agreeing to buy Sberbank.
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| FUIB |
First Ukrainian International Bank, noted as having Ukrainian capital.
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| IMF |
International Monetary Fund; provided economic growth scenarios.
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| EBRD |
European Bank for Reconstruction and Development; provided economic growth scenarios.
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| House Oversight Committee |
Implied by footer 'HOUSE_OVERSIGHT'.
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Locations (4)
| Location | Context |
|---|---|
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Target market for bank acquisition and location of assets.
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Location of Norvik bank.
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Origin of government-owned banks mentioned.
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Desired origin of the shareholder for the proposed bank acquisition.
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Relationships (2)
most notable being FUIB of Mr Akhmetov
Norvik bank of Latvia that belongs to individuals of Russian origin
Key Quotes (3)
"I would propose the acquisition of a profitable bank with lower than the average NPL portfolio... in order to capture the projected 4-year economic growth trend in Ukraine"Source
HOUSE_OVERSIGHT_026140.jpg
Quote #1
"The Russian government owned banks... are heavily undercapitalised being below the required norms"Source
HOUSE_OVERSIGHT_026140.jpg
Quote #2
"the task of transforming the mentality of the staff of these banks to that similar of a private one should be close to impossible, at least for a period of 3 years"Source
HOUSE_OVERSIGHT_026140.jpg
Quote #3
Full Extracted Text
Complete text extracted from the document (2,181 characters)
The Russian government owned banks, making up the 8.4% of the banking assets, are heavily undercapitalised being below the required norms because of underprovided problematic loan portfolios with NBU imposing certain sanctions. Moreover, there have been many aggressive actions from Ukrainian activists because of the war conflict and all of them, namely Sberbank, VTB (controls two banks in Ukraine, VTB and BM Bank) and Prominvestbank, have announced their departure by selling the banks. So far the sale of Sberbank has been agreed to Norvik bank of Latvia that belongs to individuals of Russian origin, pending the approval from the NBU.
The banks with Ukrainian capital in the top 20 banks share 6% of assets with the most notable being FUIB of Mr Akhmetov.
Proposal
I would propose the acquisition of a profitable bank with lower than the average NPL portfolio, operated by a West European shareholder, with a reasonable market share and of a digestible acquisition price in order to capture the projected 4-year economic growth trend in Ukraine (base scenario by IMF and EBRD) in a market with:
▪ Small competition
Analysing the current landscape of the top 20 banks that command around 90% market share of assets, there are very few banks that would be competent to pursue business development given their specific circumstances.
The state owned banks that command the 52% are obviously bothered with trapped legacy and corporate governance issues. All four banks are also preparing for their potential privatisation, however, the task of transforming the mentality of the staff of these banks to that similar of a private one should be close to impossible, at least for a period of 3 years. I would have thought that their liquidity would be most probably invested in government titles rather than pursuing loans aggressively by competing at low interest rates.
The Russian government owned banks that command 8.4% are already at the “sales process” stage and I believe that there will be no European investors that would invest in such banks that are undercapitalised as officially NBU has confirmed, with most of their loans being NPEs.
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HOUSE_OVERSIGHT_026140
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