Ukraine’s National Bank declares Cominvestbank insolvent

The Board of the National Bank of Ukraine (NBU) has decided to classify JSC Commercial Investment Bank (Cominvestbank) as insolvent, according to an announcement on the NBU's website on Thursday.

The statement notes that as of November 1, 2024, the financial institution held a market share of just 0.04% of the total assets of insolvent banks. The bank was ranked 52nd out of 62 Ukrainian banks in terms of total assets, valued at UAH 1.43 billion.

"Accordingly, the classification of JSC Cominvestbank as insolvent will not impact the stability of Ukraine's banking sector. The decision was made due to the bank's failure to align its activities with legislative requirements, including regulatory acts of the National Bank," the central bank said.

The NBU clarified that on August 8, 2024, its Board classified Cominvestbank as a problem bank, citing Article 75 of the Law of Ukraine "On Banks and Banking Activity."

This decision was based on evidence of risky activities by the bank that posed a threat to the interests of its depositors and other creditors. These activities included inadequate internal control systems, poor risk management, and insufficient income levels, which collectively created a risk of regulatory capital depletion and potential violations of prudential capital norms set by the NBU. Furthermore, the bank was found to have systematically provided and disclosed false information and reports to conceal its true financial condition.

The NBU further noted that since the designation of Cominvestbank as a problem bank, it continued engaging in risky activities and systematically publishing false information and reports to hide its real financial situation. The bank's management and owners failed to take appropriate measures to prevent it from being declared insolvent.

The NBU emphasized that every depositor of Cominvestbank will be compensated in full, including accrued interest, as of the end of the day preceding the initiation of the bank’s market withdrawal process. Exceptions apply only in cases specified under Part 4 of Article 26 of the Law of Ukraine "On the System of Guaranteeing Deposits of Individuals."

As of November 21, 2024, the total estimated guaranteed compensation to depositors amounted to UAH 432 million. As of December 4, 2024, the bank's high-liquid assets, including government bonds and deposit certificates, were valued at UAH 890 million.

The NBU also reminded the public that under the Law of Ukraine No. 2180-IX, enacted on April 1, 2022, a 100% guarantee of deposits for individuals was introduced across all banks.

According to information published by the NBU, more than 42% of Cominvestbank's shares are owned by the rental enterprise Uzhgorod Cognac Factory (Uzhgorod), 25% by Plodoovoch-Uzh LLC (Uzhgorod), and nearly 33% by Latuzh LLC (Mukachevo, Zakarpattia region).