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UPDATE 1-Immediate crisis over, head of Ukraine's largest bank to step down
June 26, 2017 / 1:15 PM / 5 months ago

UPDATE 1-Immediate crisis over, head of Ukraine's largest bank to step down

(Adds finance minister quote, details, background)

By Pavel Polityuk

KIEV, June 26 (Reuters) - The chief executive of Ukraine’s largest lender, PrivatBank, who was appointed after its nationalisation in December, plans to step down in the near future, the bank said on Monday.

The announcement comes days after the government announced the bank would need a further capital injection of $1.5 billion to stay afloat.

CEO Oleksandr Shlapak “soon plans to complete his anti-crisis tenure,” the bank said in a statement that praised Shlapak’s role in stabilising the lender after it was placed under state control.

The bank’s board will decide whether to accept his resignation at a meeting at the end of July, it said.

Neither PrivatBank nor the finance ministry, which controls the lender, gave detailed reasons for the resignation. Shlapak is seen as a possible contender to take over the reins as central bank governor after Valeria Gontareva resigned in May, leaving her deputy in temporary charge.

PrivatBank was taken under state control with the backing of Ukraine’s top creditor, the International Monetary Fund, after risky lending practices left it with a capital shortfall of more than $5.5 billion.

The nationalisation has so far cost taxpayers $4.3 billion, but an Ernst and Young audit of the lender’s 2016 annual report showed that, as forecast by the central bank, additional funds were needed to meet capital adequacy requirements.

This will be a further burden on Ukraine’s already strained public finances and will mean more has been spent on recapitalising PrivatBank since December than the annual defence budget amid a long-running conflict with Russia-backed rebels.

“I am grateful to Oleksandr Shlapak for his important contribution to stabilizing the bank,” said Ukrainian Finance Minister Oleksandr Danylyuk in a statement.

“The next leader should be a professional who will continue to develop the bank, attract investors and prepare the bank for a transparent privatization in the future.” (Writing by Alessandra Prentice and Matthias Williams; Editing by Jason Neely and Mark Potter)

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