The Ministry of Finance of Ukraine, the International Financial Corporation (member of the World Bank Group) and JSC “Ukrgazbank” have signed the Memorandum of Understanding on the support for the privatization of JSC “Ukrgazbank”, Ukraine’s fourth biggest bank by its assets.
This Memorandum is a part of the extensive efforts of the Ukrainian Government (which controls a significant share of the national banking sector) to reform and to enhance state-owned banks prior to their privatization. Doing this, the Government has already presented a draft law to the Parliament which was developed by the Ministry of Finance jointly with international financial institutions and is aimed to improve the corporate management of state-owned banks as well as to revamp their reform strategy. This partnership is one of the essential components of the IFC’s strategy aimed to establish a transparent and competitive process for the privatization of state-owned banks, in order to increase the growth pace of loan supply and to make the Ukrainian banking sector more attractive for investors.
IFC will be supporting the Ukrgazbank in enhancing its corporate management, ensuring its operational independence as well as in the further improvement of its sustainable business model based on commercial expedience.
The Memorandum of Understanding between IFC, the Ministry of Finance and the Ukrgazbank was signed during the first visit of Jim Yong Kim, President of the World Bank Group, to Ukraine with the participation of Prime Minister of Ukraine Volodymyr Groysman.
“I welcome the signing of the Memorandum. Our Government will continue its efforts to establish a favorable investment climate in Ukraine, to attract international investors for the Ukrainian economy. This is our goal which will lead Ukraine to success”, the Prime Minister of Ukraine said.
“This partnership is a strong signal meaning that Ukraine is keen to attract private investors to the banking sector and to ensure the quality transformation of the Ukrgazbank, - Minister of Finance Oleksandr Danyliuk said at the signing ceremony. – We are working to establish favorable conditions for the development of our banking system and to resume the extensive loan supply of big and small companies thus supporting the economic growth”.
Kyrylo Shevchenko, Chairman of the Board of the Ukrgazbank, said: “In the course of the year, the Ukrgazbank has achieved a significant progress in transforming itself into a more effective, transparent and innovation banking institution. The Ukrgazbank is the first bank in Ukraine which has introduced an absolutely new business model - green banking. Of course, this cooperation will further enhance the market position of the Ukrgazbank and contribute to its attractiveness for investors”.
“IFC is committed to the support for fundamental reforms in the banking sector of Ukraine, - said Tomasz Telma, IFC regional director for Europe and Central Asia. – Successful transformation and then privatization of the Ukrgazbank will be an important milestone for the banking sector of Ukraine and for international investors. This will help demonstrate the investment potential of Ukraine”.
In September, IFC provided the Ukrgazbank a warrant for funding trade transactions equal to USD 20 million. IFC also helps the bank boost its activities in “green” financing. Since the beginning of the partnership, the bank has financed projects amounting more than UAH 5 billion (USD 200 million) and prepared a number of projects totaling UAH 12 billion (USD 440 million).
In 25 years of cooperation with Ukraine, the total volume of the operations of the World Bank in Ukraine has reached approximately USD 12 billion within approximately 70 projects and programs. Presently, the investment and loan portfolio of the World Bank in Ukraine includes 8 investment projects amounting approximately USD 2.5 billion as well as one loan warrant equal to USD 500 million. The World Bank has approved the Concept of Partnership with Ukraine for 2017–2021 which shall support the efforts of Ukraine to ensure a sustainable economic growth for the prosperity of all citizens of Ukraine.
JSC “Ukrgazbank” is a universal dynamic financial institution providing traditional as well as unique and innovative banking services. The bank cooperates with corporate customers, small and medium-sized business as well as with private persons. The Ukrgazbank ranks among the 5 biggest banks in Ukraine by the volume of assets. 94.94% of the charter capital of the bank belong to the state represented by the Ministry of Finance of Ukraine. In 24 years of its work, the Ukrgazbank has gained the trust of thousands of private and corporate customers. The bank continues to demonstrate a stable dynamic in extending its customer base which is almost at 1-million mark now. The Ukrgazbank is now the leading Ukrainian bank in “green” financing.
International Financial Corporation (IFC)
IFC, a member of the World Bank Group, is the biggest global development institution whose operations are focused on the private sector in emerging markets. Cooperating with more than 2000 companies worldwide, IFC resorts to its capital, expertise and influence to develop new markets and to create opportunities in various parts of the world. In the financial year of 2017, IFC’s long-term investments in developing countries reached record-high USD 19.3 billion supporting the private sector in its crucial task of overcoming poverty and ensuring prosperity for everyone.