The Deposit Guarantee Fund for Individuals (DGF) is ready to take on the burden of problem loans of state financial institutions, relying on its successful experience of working with defunct bank assets. This was stated by the head of the Fund, Olga Belay, in an interview with Interfax-Ukraine.
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“We have absolutely all the means, procedures, and a professional team that knows how to work with this. This looks organic not only for us, but also from the investor's point of view,” she said.
According to her, it would be easier for investors to navigate if all assets were sold according to the same rules. Today, state banks act chaotically: some put up lots on Prozorro.Sale, others on SETAM, some divide debts into small parts, some offer large packages.
“Under such conditions, the market is uncertain and completely unstructured. If such sales are concentrated in one place, this will allow the market to be evenly filled with assets that are of interest to different investors: some are interested in retail, some in corporate, because state banks do not consult with each other when to offer them certain pools,” Belay noted.
She is confident that centralization would allow supply to be distributed in such a way as to satisfy the different demands of buyers.
Freeing banks from the burden
Belay believes that for state banks, the transfer of “bad loans” would be a real salvation. Instead of wasting time and effort on these assets, they could direct energy to creating new products and expanding horizons. “Right now, these problematic debts are sucking up the lion’s share of management attention and talent,” she added.
Who decides?
When asked who could make such a decision, the head of the Fund pointed to the Ministry of Finance as the key owner of state banks. “It can consult with its supervisory boards to what extent they consider it appropriate for the bank to concentrate on this part of its activities, what is the effectiveness of this work taking into account the allocation of resources and the cost of resources within the bank,” Belay reasons.
She recalled that the Deposit Guarantee Fund had already dealt with such giants as MR Bank and Prominvestbank in 2022, and smaller institutions such as Ibox or Concord do not create a large burden. Thanks to the stability of the market and the work of the NBU, new large receipts are not expected in the near future.
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- Deposit Guarantee Fund loans