Finance

Wednesday, August 25

Ukraine wants to accelerate the abolition of customs tariffs with the EU , Prime Minister Shmyhal announced on August 24. Bilateral negotiations will begin in September 2021.

Fitch Ratings revise IDRs of major Ukrainian cities. The international rating agency Fitch Ratings has updated the forecast on the Long-term Issuer Default Ratings (IDRs) of Kyiv, Dnipro, Kharkiv, Lviv, Mariupol, Mykolaiv, and Odesa in foreign and local...

Thursday, August 19

To promote exports to nontraditional markets, the Cabinet of Ministers allocated $67.5 million yesterday to Ukraine’s Export Credit Agency, Prime Minister Shmyhal announced on Telegram. Noting that Ukraine’s exports were up 31% yoy in the first h...

PrivatBank lawyers have added Israel to the list of countries where they are suing the bank’s former owners Igor Kolomoisky and Gennady Bogolyubov. The lawsuit accuses the duo of fraud, misappropriation and money laundering stemming from the transfer of $600 million from PrivatBank in 2007-2011 and deposit into an account at the Israeli bank Disc...

During the upcoming Independence Day holiday, Monday Aug. 23 and Tuesday Aug. 24 are banking holidays , the National Bank of Ukraine announces on Facebook. To compensate for the loss of Aug. 23, Saturday, August 28 is a normal working day.

Wednesday, August 18

Ukraine wants to negotiate free trade agreements with the US and with China, Economy Minister Oleksiy Liubchenko tells Interfax-Ukraine in a lengthy interview. Referring to the Aug. 30 visit by President Zelenskiy to the White House, Liubchenko says: “During the president’s vi...

Looking east, Liubchenko said: “We are also working systematically with China, coordinated by Deputy Prime Minister Olga Stefanishina. We have launched a joint study on the possibility of a free trade agreement.” China is now Ukrai...

International rating agency Fitch Ratings has upgraded its outlook of Ukraine’s four big state banks — Oschadbank, PrivatBank, Ukreximbank and Ukrgasbank — from ‘stable’ to ‘positive.’ The Moscow office of Fitch confirmed at ‘B’ their long-term issuer default ratings in foreign and nation...

Tuesday, August 17

“Ukraine’s Economy Back in Recession as Virus, Rate Hikes Weigh,” Bloomberg headlines, citing the latest dip in official GDP numbers. Second-quarter GDP fell by 0.8% compared to the first quarter, reports the State Statistics Service. This fall comes after the Q1 GD...

Inflation rising to 10%, the prime interest rate rising to 8% and last spring’s coronavirus lockdown were among reasons cited for a lackluster recovery from 2020. The National Bank of Ukraine predicts that growth will be 3.8% this year. But last week, the bank warned at the spread of the delta varian...

The central bank expects a coronavirus outbreak in the autumn, a contagion that “will delay the recovery of economic activity to the level it was before the pandemic,” Serhiy Nikolaichuk, a deputy governor of the National Bank of Ukraine, tells Forbes Ukraine. No...

The number of Ukrainians receiving unemployment benefits in August is 36% below the level of one year ago, reports the State Employment Service. The drop of recipients to 273,000 people indicates “a gradual economic recovery,” the Economy Ministry said.

Monday, August 16

Ukraine’s trade in goods with China surged during the first half of this year, nearly hitting $9 billion , reports the State Statistics Service. Exports to China jumped by 43% yoy, to $4.3 billion. Imports from China increased by 25%, to $4.6 billion. This is more than the combined total of trade with Po...

By the wider measure of goods and services, Ukraine’s foreign trade eked out a small surplus during the first half. Exports grew by 25.5%, to $35 billion, while imports rose by 28%, to $34.5 billion. Ukraine’s trade deficit with the EU dropped in half, to slightly less than $1 billion. Exports to EU nations were up...

Banks issued $135 million in home mortgages during the first half of this year – more triple the amount of January-June 2020, reports the National Bank of Ukraine. Spurring the flow of money, the government adopted March 1 its ‘Affordable Mortgage 7%’ program. Under this program, up to $75,000 can be loaned for up to 20 year...

Over the next three years, PrivatBank, Ukraine’s largest and most profitable bank, plans to cut its branches by 14%, to 1,250, and its staff by 28%, to 15,500 , reports the Finance Ministry, the overseer of the state-owned bank. The goal is to create a ‘good bank’ and a ‘bad bank.’ The ‘good bank,’ largely free of non performing loans from the Kolomoisky er...

PrivatBank earned $435 million in net profit during the first half of this year, making it Ukraine’s most profitable bank , reports the National Bank of Ukraine. The next most profitable banks were: Raiffeisen Bank – $86 million; Sberbank – $79 million; FUIB – $74 million; and Universal Bank – $60...

Monobank, an outgrowth of PrivatBank, “is already worth more than a billion dollars,” Oleg Gorokhovsky, a co-founder, writes on Telegram. The bank was founded in January 2017 by three former managers of PrivatBank, which had been nationalized one month earlier. The internet-based bank ...

Friday, August 13

Concorde Capital’s Alexander Paraschiy writes: “The company will be able to accumulate more funds to finance its capex programs, as well as will enjoy better leverage multiples. This potentially may lead to further upgrades of the company’s credit...

Wednesday, August 11

The government sold the hryvnia equivalent of $100 million in government bonds yesterday through its weekly bond auction. Netting 42% more than in the previous week, the auction took place with unchanged yields: 1-year -11.15%, 1.5-year – 11.3%; and 2-year – 12.09%. The 1-year...

In the first year since gambling was legalized, the industry brought $37 million to the state budget, the Gambling and Lottery Regulation Commission reported Tuesday. This is one quarter the amount forecast one year ago. The gambling industry has been slow to expand due to delays in adopting regulatio...

Monday, August 9

Large truck sales are up 73% yoy, to 2,746, reports AUTO-Consulting. The company tracked sales of trucks weighing over 3.5 tons from January to July, compared to the same period last year. “Road construction continues to be the market driver,” ...

To promote the sales and service of electric cars, the EBRD is loaning €20 million to Winner, Ukraine’s leading importer and retailer of electric cars. To be matched by Winner’s investment of €23 million, the money will go to building environmentally sound dealerships for Renault and Volvos, t...

Friday, August 6

Ukraine’s government is on a borrowing spree that threatens to stifle future growth, Serhiy Verlanov, former head of the State Tax Service, warns in a scathing critique in the SeekingAlpha financial site. “Ukraine’s debt shot up 18% over the past 25 months, an unprecedented increase, ...

“By stalling economic reforms and refusing to fight corruption, the government has replaced cheap IMF loans at rates of about 1% with commercial loans at rates of 6.875% or higher, ” continues Verlanov, who was fired by Zelenskiy in April 2020. “The developments illustrate the government’s shortsighted debt management approach that has become the hallmark of Ukraine’s incoherent...

“Although governments around the world resorted to increased borrowing to fight the pandemic and stimulate economic growth, most of their borrowing has come at near-zero interest rates, ” Verlanov continues. “In contrast, Ukraine has been piling up high-interest debt, while its controversial policies have been inhibiting economic growth.” He concludes: “With high volatility looming, ...

Boosted by bond sales and high export commodity prices, Ukraine’s international reserves increased by 2% in July, hitting $29 billion , reports the National Bank of Ukraine. The Finance Ministry in July placed $526 million worth of Eurobonds and sold $140 million in domestic government bonds. With more money coming in from exports, ...

Wednesday, August 4

The IMF will give Ukraine $2.7 billion “free of charge,” Vladislav Rashkovan, Ukraine director to the IMF, writes on Facebook. The money is to be transferred to Ukraine’s central bank on Monday Aug. 23 – the day before the celebrations for 30th anniversary ...

President Volodymyr Zelenskiy welcomed the news, saying: “This will be a good gift for our country on the 30th anniversary of Independence. These funds will help overcome the consequences of the coronavirus crisis and stimulate our economy.” He said IMF Man...

In Washington, the IMF Board of Governors approved Monday night a general allocation of Special Drawing Rights equivalent to $650 billion to boost global liquidity . According to country quotas, Ukraine gets 4%, or $2.7 billion. “This is a historic decision – the largest SDR allocation in the history of the IMF and a shot in the arm for the global economy at a t...

In Kyiv, three presidential advisors told reporters yesterday that they are optimistic about the IMF’s planned mission here next month. Oleh Ustenko, economic adviser to Zelenskiy, told Interfax-Ukraine: “Literally in September, I expect that we will receive a new tranche.”

Separately, Tymofei Mylovanov, an economics advisor to Zelenskiy’s chief of staff, told Bloomberg that he sees a staff-level agreement and a tranche possible by the end of this year. “After the call with Georgieva, the likelihood of this has risen,” he said. “Before that, I was pessimistic.”

Presidential spokesman Serhiy Nykyforov noted the recent passage by the Rada of several free market reforms demanded by the IMF . In a briefing to reporters, he said: “The mission will remain satisfied, and the President’s Office has no doubts about this.” A favorable report by the IMF mission could unlock $700 million tranche...

The Finance Ministry auctioned off only $70 million in government bonds yesterday – 40% less than the week before. Analysts predict that auctions will dwindle in August – a trend that underscores the need for IMF aid prior to the big debt repayments of September.

With migrant workers sending home to Ukraine $1 billion a month, Nova Poshta, the privately owned delivery service, has allied with Western Union to facilitate money transfers to Ukraine. By tapping into Western Union’s global financial network of 550,000 service points in 200 countries and territories, “our customers have even more oppor...

Tuesday, August 3

Fighting a strengthening hryvnia, the central bank bought $136 million on the interbank foreign exchange market last week – more than four times the $32 million bought the previous week. So far this year, the National Bank of Ukraine has purchased a net $1 billion to prevent the hryvnia from overvaluing against the dolla...

‘Big Privatization’ starts this month with the goal of raising almost half a billion dollars for the Treasury by the end of this year, Prime Minister Shmygal writes on Telegram. This would be more than five times the $83 million raised last year. Shmygal instructed the Economy Ministry and the State Property Fund to draw up by the en...

Monday, August 2

As part of a drive to privatize all state bakeries, the Radyvyliv Bakery in Rivne region will be auctioned off Aug. 30, the State Property Fund reports on Facebook. The starting price is $5.3 million for a complex that includes 414 hectares and 65,000 ...

Complaints to the Business Ombudsman are up 38% yoy in April-June to 531 , the Ombudsman Council reports. Of the complaints, 65% were over tax issues. During the second quarter, the Council completed the investigation of 287 business complaints, succeeding in saving busine...

Citibank (Kyiv) increased its profit in hryvnia by 14% during the first half of this year, compared to January-June of last year, according to its filing to the National Securities and Stock Market Commission. Contributing to the UAH 769 million [$28.6 million] profit was $4.3 million in pr...

Banks have issued $2 billion worth of loans to 20,000 businesses in the first 18 months of the ‘Affordable Loans 5-7-9%’ program, Prime Minister Shmygal writes on Facebook. Loans up to $112,000 are extended to businesses with revenues under $3.7 million.

About 10 foreign gambling companies have applied for licenses to operate in Ukraine , Ukrinform reports, citing Boris Baum, first deputy chairman of the advisory council of the Gambling and Lotteries Regulation Commission. He said: “The market has intensified, and local licensees con...

President Zelenskiy signed a law last week allowing the National Bank of Ukraine to issue a digital currency , the e-hryvnia. The central bank “will also be able to set up a regulatory sandbox to test new services, technologies and tools in the payments sector,” reports Bitcoin.com. “The platform will allow ...

Friday, July 30

It is unlikely that Ukraine will get any more money from its $5 billion June 2020 Stand-By Arrangement with the IMF, writes Concorde Capital’s Alexander Paraschiy. He calls the Wednesday night call between President Zelenskiy and IMF Managing Director Kristalina Georgieva “a clear indicator that Ukraine failed to me...

“For Ukraine’s image in the West, this is not good news, ” he concludes. “However, for Ukraine’s public finances, this is not a big problem, as Ukraine counts on receiving about $2.9 billion from the IMF in the form of SDR allocation in the coming months.”...

Kyiv Commercial Court has confirmed the validity of the purchase of $153 million of Ukrzaliznytsia debt by VR Global Partners, L.P. Noting that VR has won seven judgements in a row on the Feb. 2019 purchase, Richard Deitz, the President of VR, described the railroad’s legal objections as “nothing other than a spurious attempt by t...

Thursday, July 29

Arrival of a $700 million IMF tranche has been put off to the fall. After a telephone call with President Zelenskiy last night, IMF Managing Director Kristalina Georgieva tweeted praise for “Ukraine’s successful economic progress under the IMF program.” But she ...

The IMF’s 18-month, $5 billion Stand-By Arrangement with Ukraine expires in December . So far, Ukraine has received only one tranche, for $2.1 billion. Separately, Ukraine is to receive from the IMF in coming weeks $2.8 billion, part of a worldwide distribution to member countries. In...

Failure to reach an agreement with the IMF and the resignation of one third of top officials at the bank over the last year are the leading complaints against Kyrylo Shevchenko, Governor of the National Bank of Ukraine, reports Economichna Pra...

Concorde Capital’s Alexander Paraschiy noted yesterday: “By law, the NBU governor has a seven-year tenure with a limited number of reasons for dismissal during the term…The presidential office has no straightforward legal reason to dismiss Shevchenko, but ...