KIEV, March 3 (Reuters) - Ukraine’s central bank declared the country’s fourth-largest lender, Delta Bank, insolvent on Tuesday, saying it had adopted risky policies during a period of economic turmoil.
Political upheaval and conflict have weakened the national hryvnia currency around 60 percent in value against the dollar since the start of 2014 and the central bank has taken steps to protect the banking sector, including offering refinancing for lenders suffering severe capital outflows.
“These steps temporarily improved the situation for (Delta), but did not lead to a significant improvement of its financial condition,” the central bank said.
Delta’s insolvency is due to a “failure to take timely, effective and sufficient measures to improve the finances of the bank,” the central bank said.
No one from the bank was immediately available for comment.
Central bank chief Valeriia Gontareva said the bank, which controls assets of around 60 billion hryvnia ($3.2 billion), had been involved in “risky activities”.
“The bank ... decided to get into corporate lending but unfortunately it didn’t have enough expertise in this sector,” she said in a briefing.
The central bank said 94 percent of Delta’s depositors would be compensated for their lost deposits in full, because it offers guarantees for holders of deposits amounting to less than 200,000 hryvnia.
Ukraine’s banks were already weighed down by a raft of non-performing loans from the 2008-2009 financial crisis, but the economic crisis exacerbated by a year of conflict with pro-Russian separatists was too much of a burden for many to bear.
The central bank closed thirty banks last year and has declared around ten bankrupt since the start of 2015.
$1 = 19.0000 hryvnias Reporting by Natalia Zinets; Writing by Alessandra Prentice; Editing by Andrew Heavens