Ukraine cbank boosts refinancing, lends to Nadra

Ukraine`s central bank has boosted its refinancing lending in recent days, including a 1.5 billion hryvnia ($300 million) loan to Nadra bank to help it repay a syndicated loan, statements from the banks showed on Thursday, Reuters reported.

Analysts are worried about the ability of Ukraine`s banking sector to repay and refinance debts at a time when the hryvnia has fallen against the dollar, liquidity in global markets has dried up and investors have fled emerging markets.

Central bank data showed it had given to an unnamed bank or banks a 1.5 billion hryvnia loan on Tuesday and a 1 billion hryvnia loan on Wednesday, both for a year at 12 percent.

Nadra, the country`s seventh largest bank, confirmed it received a 1.5 billion hryvnia loan from the central bank.

The central bank has also said it promised a loan of up to 5 billion hryvnias to the sixth largest bank Prominvest, placed in receivership on Wednesday.

Both Prominvest and Nadra are privately-owned and unlisted on the stock exchange.

Central bank data also showed it carried out a tender for funds worth 1.66 billion hryvnias available for a year at 16.9 percent. A top 20 bank, Rodovid, said it had received 289 million hryvnias (almost $60 million) thanks to the tender.

All in all, central bank refinancing jumped in the past few days from a daily trickle of 300-400 million hryvnias to 2 billion on Tuesday and almost 3 billion on Wednesday.

Total refinancing in the first eight days of October stood at 6.45 billion hryvnias ($1.3 billion) compared to 5.96 billion for the entire month of September.

Nadra has to repay a syndicated loan of $130 million at LIBOR +1.5 percent in November. It did not explain why the amount of the central bank loan was double the syndicated loan. The organisers of the syndicated loan were Fortis Bank and BayernLB.

Nadra announced on Wednesday that it had the funds to pay off a $100 million Eurobond earlier than its maturity date in November and hoped that would shore up confidence in it and the Ukrainian banking sector.

In bailing out Prominvest, the central bank made no reference to the global financial crisis which felled large banks in the United States and European Union over the past month. [ID:nL8638256]

Both the central bank and Prominvest attributed a run on Prominvest to an ownership dispute. The central bank has said that there were no abnormalities in Prominvest`s portfolio and it was meeting regulatory requirements.

Reuters via Guardian