The Ukrainian government has approved the nationalization of one of the country’s top commercial banks – Sense Bank – which was previously known as Alfa-Bank Ukraine, the Finance Ministry announced on Friday.
Sense Bank, owned by Russian billionaires Mikhail Fridman and Pyotr Aven, is Ukraine’s 11th largest in terms of assets and is considered a systemically important lender.
The National Bank of Ukraine (NBU) said in a statement on Thursday that it had decided to “withdraw from the market the systemically important” bank and put it under temporary administration.
The head of NBU, Andrey Pyshny, pledged a “safe” transfer that will not be noticeable to clients of the lender, which will operate as a state-owned entity from July 24.
“The nationalization of Sense Bank will not affect the fulfillment by the bank of its obligations to depositors and clients,” the Finance Ministry said in a statement.
“After the end of martial law, the Finance Ministry will attract investors to the sale of Sense Bank,” it added.
Kiev first pitched plans to seize the lender in December last year, following the bank’s rebranding. Last month, Ukrainian President Vladimir Zelensky signed a law that gave the government power to nationalize banks from owners that were sanctioned in connection to Russia’s military operation in the country.
Both Fridman and Aven have been targeted by Western authorities for their alleged ties to the Russian government and have faced sanctions, including asset freezes and travel bans, but have since challenged these restrictions in court.
The Russian businessmen own Sense Bank via the Luxembourg-based holding company ABH Holdings, which controls the lender’s Cyprus-based parent, ABH Financial Limited. Fridman holds a 32.86% stake in ABH Holdings, the majority owner of Sense Bank, while Aven has 12.4%, the lender said on its website.
ABH Holdings pledged last month to dispute nationalization in international courts “in order to protect its investment and mitigate losses.” The company noted that it was ready to change the ownership structure of the bank and agreed for the sale of 75.6% of Sense Bank to a “European investor” with no “funds flowing to sanctioned shareholders” following the transaction. According to Bloomberg, the sale was blocked by the Ukrainian central bank.
Sense Bank was the Ukrainian branch of Russia’s largest private lender, Alfa-Bank, which was targeted by EU sanctions in its tenth sanctions package in February. In March, reports emerged that Fridman and Aven were preparing to offload their stakes in Alfa-Bank in order to avoid further penalties.
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