Privatisation Ukraine – Caveat emptor? Probably not in this case

March 13, 2016

The National Bank of Ukraine has lent its influence toward the sale of shares in two State owned banks – “Oschadbank” and “Ukreximbank” – to external investors.


A case of caveat emptor (let the buyer beware) for these external investors (or external gamblers, given the continued failure to grasp the rule of law firmly in Ukraine)?

Probably not – at least not in this case.

The National Bank of Ukraine is putting its weight behind the sale of shares in these State owned banks to two investors able to withstand internal shenanigans and even influence Ukraine itself.  The external investors supported by the National Bank are the European Bank for Reconstruction & Development (EBRD) and the International Finance Corporation (IFC).

Not only would such share purchases provide additional confidence in these banks, but undoubtedly there would be a marked improvement in the quality or corporate governance within them.  Moreover, with Oschadbank being a high street name daily interacting with the domestic constituency, whilst Ukreximbank being an entity that concentrates upon facilitating foreign trade.

Ukrainian SME’s may beat a path the Oschadbank’s door, for the EBRD will be keen to lend sensibly to the entrepreneurial/SME class and reap the rewards (as banks do) of invigorating the economy on the bank’s terms.  Lines of credit/letters of credit may actually be forthcoming from Ukreximbank for those operating/trying to operate across national borders.

It seems simply far too sensible to actually happen.

If a morally upstanding, integrity ridden candidate emerges from the current (until 8th April) recruiting window, and is subsequently appointed to head the State Service of Intellectual Property another – although not headline grabbing – investor friendly step will have been taken.  It is no secret that intellectual property rights has been more than an irksome subject for several years within the US Embassy’s Economics Department, for it is an issue (of several naturally) that has prevented US investment despite the efforts of the US Embassy in Kyiv.

The aforementioned seems rather encouraging – until consideration is given to any degree of involvement from the feckless political class which remains intent upon trying to snatch failure from the jaws of victory.


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