European banks leave the Ukrainian market

Losses caused by problematic foreign currency loans, stagnant economy and competition from local institutions make western banking groups seek ways to leave the Ukrainian market.

This was informed by the "Kommersant-Ukraine".

According to the publication, in the past year seven banks with foreign capital have left or reduced to a minimum their presence in the country, while others began cleaning their loan portfolios. However, not everyone can leave – with the current shortage of buyers and the price of banking assets many of them will have to stay.

"European banks operating in Ukraine in 2012 were forced to accept the loss of interest in this market. However, it was not easy to leave this market due to the shortage of buyers, therefore the institutions resorted to the reduction of assets, mainly retail," – said the article.

Credit Europe Bank, owned by Turkish FIBA through ​​Dutch Credit Europe Bank, in January closed all its branches, except the central office. Its borrowers are now paying loans via Pravex bank.

In summer Swedish SEB Group has sold SEB Bank to Oleksandr Adarich. Now he develops it as Fidobank. SEB Group has remained on the market, but its SEB Corporate Bank does not work in retail. In December Adarich bought Erste Bank for 83 million dollars from the Austrian Erste Group.

The two subsidiaries of the French group Societe Generale – ProFin Bank and ProstoFinance Company – sold to Alfa Bank a loan portfolio worth 700 million hryvnias. Volksbank also ceased to be western company as the Austrian Volksbank International Group was bought by Sberbank.

Now Ukrainian subsidiary of the group will be merged with the subsidiary bank of Sberbank.

The most notable deal of the year was the purchase of the Bank Forum by Vadim Novinsky’s "Smart Holding". The former owner of the bank – German Commerzbank – during five years invested about $ 1 billion in it and left Ukraine with a loss.

As the newspaper writes, Mykola Lahun decided to buy Kreditprombank from the pool of European investors. Bankers report that Greek Alpha Bank (owns Astra Bank), Eurobank EFG (owns Universal Bank via Dutch EFG New Europe Holding BV) and the Swedish Swedbank are conducting active negotiations to sell their Ukrainian subsidiaries.

Agreement on the latter may be completed by the end of the year.