Bank "Finance and Credit" has been experiencing problems for a long time. Previously, it was one of the largest banks, but today it has almost gone down in history. The problem is that the state refused to support the work of a financial institution. And Mr. Zhevago, this very desire has long disappeared. The brilliant history of the financial market giant, starting in 1990, almost came to an end in the fall of 2014.
An excursion into history, or How the Zhevago Empire appeared
A year ago, the branches of Finance and Credit Bank successfully operated throughout Ukraine, serving tens of thousands of customers with high quality. The history of the financial market giant began back in 1990, at a time when the State Bank of the USSR registered the enterprise as the “Ukrainian Commercial Bank for Business Cooperation”. The new owners of the institution gave the financial organization a new name in the 90s. Representatives of the Ukrainian “magnificent seven” spoke at the time in the person of the new founders:
- V. Medvedchuk.
- The Surkis brothers.
- V. Zgursky.
- Yu. Karpenko.
- B. Gubsky.
- Yu. Lyakh.
It was they who were interested in the question of where to put to save their capital, which they received by participating in the largest financial pyramid of the past called "Ometa 21". That is how the “Finance and Credit” bank, known throughout the country, appeared, at the head of which it was decided to appoint Konstantin Zhevago, then a simple student.
Active actions
From the first minutes of the existence of the updated version of the bank, its leader began to take active steps, applying a creative approach to managing a large-scale financial structure. Today, the Finance and Credit Bank is bankrupt, and earlier it was a massive buyer of expensive shares and stakes in a wide variety of Ukrainian companies. The management of the institution managed to attract foreign capital. The most famous investor was I. Bakay, who made a significant contribution to the transformation of the domestic institution into mini-Switzerland. On the accounts of the financial structure, the contributions of political opponents, and industrial groups, and criminal, and semi-criminal structures coexisted peacefully. Despite the inactivity of the institution in the public sphere, minimal participation in interbank tenders and passive lending to individuals, he always managed to be in the first places of the NBU rating. In relation to the bank "Finance and Credit", whose problems began relatively recently, until the bankruptcy there were no negative reviews and statements.
First problems
The first financial difficulties faced the first difficulties in the second half of 2008. It was during that period that a wave of crisis hit Ukraine. At this point, the Finance and Credit Bank, under the strict guidance of Zhevago, has become a typical commercial structure, which served the group of companies of the head. It included at least 60 enterprises and firms. It was these Zhevago organizations that were the main consumers of the funds of the bank's customers, and received them at the most favorable interest rates and on attractive terms. We can say that the Finance and Credit Bank (it burst almost only in 2014) then consciously took risks, jeopardizing the fulfillment of its obligations to customers. In 2008, many financial institutions encountered difficulties, but not many received financial support from the National Bank. It is very interesting that the lion's share of the provided capital was successfully spent on speculation within the framework of the foreign exchange market.
Fatal 2009: Last Hopes
The spring of 2009 became fatal for the bank. It all started with problems at such enterprises as AvtoKrAZ, which stopped production at that time for at least six months, and Kyivmedpreparat, which defaulted on the technical type of bonds issued, which promised a real default. There were difficulties at the Stakhanov Carriage Building Enterprise, which failed to find orders for 2009. All these enterprises were the property of Zhevago. Due to an unfortunate combination of circumstances, the “Finance and Credit” bank, whose branches successfully worked throughout Ukraine, is on the verge of default at that time.
Who does the bank owe?
The financial institution was unable to return not only money to individuals, but also a loan of $ 70 million, which it took from structures such as Raiffeisen Zentralbank, Standard Bank and VTB Bank. The bank was unable to pay even interest on loans. The loan portfolio of that time included about 35% of mortgage loans, which amounted to about 4.85 billion hryvnia. During the crisis that prevailed at that time, this category of debts was automatically transferred to the category of hopeless ones. Bank experts evaluated the situation and announced that to maintain the institution afloat, it requires an investment of 5.5 billion hryvnia.
Workaround
The management of the Finance and Credit Bank (Kiev) in March 2009 makes a decision at an extraordinary meeting to ask for help from the state. Given that the manager of this institution was simultaneously a People’s Deputy from the BYuT party and simultaneously acted as the largest sponsor of this bloc, the decision of the Cabinet of Ministers was not only positive, but also very operational. Thus, the bank “Finance and Credit”, whose problems did not recede, falls into the list of seven financial institutions of Ukraine, which are capitalized from the state budget. We draw attention to the fact that funds that could help solve the problem with depositors and payment of deposits were redirected to another channel. Today, the Finance and Credit Bank is closed because at the time of the crisis, free funds, which is about 300 million hryvnias, were allocated for lending to AvtoKrAZ and the Kherson Propeller Shafts Plant. The loan term was 63 months at 14% per annum, when the market had an average interest rate of 26.4%.
Bidding with the government and the wrong decision
After receiving funds from the government on the bank’s accounts, the real bidding began. The Cabinet of Ministers began to actively demand from each of the institutions that were in the seven of the lucky ones to re-register about 75% of the shares to the state. And even a requirement was put forward that the Bank “Finance and Credit” the interim administration replaced the existing management for up to 12 months. The management of the financial structure agreed to transfer only 50% of the shares and gave permission for the introduction of a supervisor of supervision.
Refusal of state assistance
State support ended when the recapitalization process took on a flat format. The bank’s management completely refused any assistance from the government. After the National Bank of Ukraine allocated about 2.5 billion hryvnias to maintain the structure of the institution, Zhevago said that he would continue to cope with his difficulties. The consequence of such a strange decision was the inability of a financial institution to make client payments, the inability to return deposits to individuals that expired. It is also very interesting that the Finance and Credit Bank, whose problems were provoked to a greater extent by the management itself, continues to redirect all available funds as loans to the accounts of Zhevago companies. Such a development of events, which has already been made public, pushes the public to indignation and can result in massive discontent and protests. At the time of the emergence of problems, the financial institution was servicing about 119 thousand term deposits and about 217 current accounts.
Caution scammers
Today, many say that the Finance and Credit Bank is bankrupt, but this does not stop the structure. Relatively recently, the largest advertising campaign was launched, in which many people believed. The G7 contribution was advancing with good interest rates. Strange, but for some reason, the fact that by the beginning of 2015 many branches of the bank (at least 80) had ceased to exist is silent. At least 20% of employees have already been laid off. The deputy head of the institution was reckless to publicly say that the financial corporation is experiencing difficulties and over time the losses will only increase. This should at least alert the Ukrainian government.
What investors and clients say
Clients and depositors of the bank whose deposit term has ended in 2015 cannot get their money on hand. Arbitrariness occurs in many departments. Employees of the Bank "Finance and Credit", the provisional administration of which was never introduced, carry out an independent extension of deposits. If previously the deposit expiration date was announced in advance, today this is not practiced. Despite the availability of funds at the checkout, no one gives money to their hands. The happiest investors are those who managed to get at least 20% of their contribution. Mass resentment does not change the situation. Among the victims there are single mothers, and people with disabilities, and ordinary students. This does not affect non-payment. Security has appeared in some branches, which removes customers who actively require their funds from bank premises. This practice has not been applied before.
All is not lost, there is a small chance
Despite the fact that the bank completely does not fulfill its obligations to customers, its management continues to take active measures to recapitalize. At the meeting on March 23, it was decided to increase the authorized capital of the institution by issuing shares of the bank in the amount of 616.4 million hryvnias. So far, the Finance and Credit Bank has not completely burst, and there is still little hope. The first withdrawal of shares on the market brought plus 22% of the authorized capital (3416.4 million hryvnia). The next meeting of shareholders is scheduled for April 27, 2015. It will be officially calculated and announced the results of work for the past 2014. The issue of reconstruction of the government apparatus will be considered. According to preliminary forecasts, it is “Finance and Credit” - a bank (including the Kharkov branch), which in the future will receive assistance from the regulator in the amount of 700 million hryvnias, which should help fulfill all obligations to investors. The decision is due to the fact that within the financial structure, 4% of all bank deposits in Ukraine and 2% of all assets of the country are concentrated. The very same credit institution belongs to the first category.
What can interfere with brilliant plans?
It is unambiguous to say that the Finance and Credit Bank is closing, the fact of active actions on the part of shareholders does not allow. At the same time, there is another interesting point that can cross out all the brilliant management plans. Cargill appealed to a New York State court to block correspondent accounts. The request was instantly granted pending trial. Debt of $ 44 million today looms over the Finance and Credit structure. The Bank (Kharkov, Kiev and other branches) promises to carry out debt restructuring. Management insists that it does not refuse to fulfill its obligations to any of the creditors. It was proposed to negotiate with a view to solving this problem. How the situation will unfold further is not known, investors can only wait and hope for the best. Experts, leaning towards negative forecasts, do not exclude the likelihood of a financial structure withdrawing from a protracted crisis and full compensation of deposits to each client.