DEPOSIT GUARANTEE FUND (DGF)
+380-800-105-800 * +380 44 333-35-63
People with impaired vision The usual version
UA
+380-800-105-800 +380 44 333-35-63

Possible ways to resolve an insolvent bank

Possible ways to resolve an insolvent bank Sale of an insolvent bank to an investor Transfer of assets and liabilities of an insolvent bank to a receiving ba... Creation of a bridge bank Options for acquiring individual assets of a solvent bank Bank liquidation

The law offers several ways that allow bidders to acquire an insolvent institution or a large part of its assets, in particular:

  • purchase by an investor of 100% of the shares of an insolvent banking institution with its subsequent capitalization by the investor;
  • transfer of all guaranteed deposits (and, if possible, other liabilities) to the acquiring bank with simultaneous transfer of the pool of assets of the insolvent bank for the same amount. If the value of the transferred assets does not cover the guaranteed amount, the DGF is entitled to provide the receiving bank with compensation in the form of non-refundable financial support;
  • If a person other than the bank wants to buy the asset pool, then such an investor has the opportunity to purchase 100% of the shares of a bridge bank that the DGF will create specifically for him and to which the DGF will transfer the asset pool chosen by the investor. The DGF will also transfer a part of the deposits of the insolvent bank for the same amount to the bridge bank. If the assets are insufficient to transfer at least the guaranteed deposits, the DGF may also provide the bridge bank with non-repayable financial support. The capital of the bridge bank shall be increased by this investor after purchasing shares of the bridge bank.

The liabilities shall be transferred to the acquiring or bridge bank in the same order of priority as that established for the payment of creditors' claims during the liquidation procedure.

In order to purchase a bank or a bridge bank, it is necessary to obtain the status of a pre-qualified person in advance (before insolvency), and, after insolvency, to get the NBU's approval for the purchase of a substantial participation in the bank. Acquiring bank shall confirm its good financial condition. Persons interested to participate in the resolution of an insolvent bank will have the opportunity to review information about the bank, its assets and liabilities, and submit a bid.

If the DGF fails to find an investor or a receiving bank during the provisional administration, the DGF begins liquidation of the insolvent bank, including the sale of its assets and repayment of creditors' claims from the proceeds.

The DGF, regardless of the chosen resolution option, starts paying out guaranteed deposits no later than the 20th business day after the start of the provisional administration (for banks with a large number of depositors - the 30th business day).