Finance ministry, NBU decide to remove Rodovid Bank from market

The Board of the National Bank of Ukraine (NBU) in consultation s with the Finance Ministry on February 25, 2016 decided to declare public joint-stock company Rodovid Bank insolvent and transfer it to the Individuals' Deposit Guarantee Fund.

"It was decided to remove the bank from the market using the rational approach to the use of state-owned assets and budget funds," the Finance Ministry reported on Friday.

The ministry said that the decision was made to execute the state-run bank development strategy approved by the Cabinet of Ministers on February 11, 2016.

The ministry said that Rodovid Bank was capitalized by the state in 2009-2011 by the amount of UAH 12.35 billion, which allowed paying almost UAH 10 billion to depositors of the bank and liabilities to depositors of Ukrprombank.

The Ukrainian government decided to create a bank of bad assets on the basis of troubled Rodovid Bank in 2011. It was planned that the bank would efficiently work with assets of state-run banks and would return the budget funds that were sent to its capitalization within five years.

"However, in seven years of owning the bank it failed to settle the issue bad assets and development the successful readjustment model," the ministry said.

The ministry said that among reasons of the bank's operation failure was the absence of legislation and the low efficiency of the bank's operation with own assets.

Rodovid Bank ranked 20th among 123 operating banks as of October 1, 2015, in terms of total assets worth UAH 121.6 billion, according to the NBU.