Ukraine Needs $4.2 Billion or More to Shore Up Banks, Kubiv Says - Bloomberg

Ukraine Needs $4.2 Billion or More to Shore Up Banks, Kubiv Says - Bloomberg:



"Ukraine’s banks need at least 50 billion hryvnia ($4.2 billion) to 60 billion hryvnia in fresh capital, central bank Governor Stepan Kubiv said, giving a more downbeat view than the country’s biggest foreign lender.



The monetary authority seeks to maintain the solvency of the banking system after Russia’s annexation of Crimea and a war against pro-Russian separatists in the country’s east drove off foreign investors and shut bank branches in areas wracked by violence. The economy may shrink 5 percent this year, the International Monetary Fund said on May 1, before the latest surge in fighting.



Ukraine’s banking system will probably see a year or two of losses as local and foreign-owned lenders “freeze operations” until they get more clarity on the country’s future, analysts at Raiffeisen Bank International AG, including Gunter Deuber in Vienna, wrote yesterday. Raiffeisen sees recapitalization needs between $3 billion and $5 billion as the hryvnia currency’s devaluation curbs banks’ capital adequacy."



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