“Too big too fail, Ukraine edition”–Poroshenko’s banking business

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2/14/2015

Poroshenko’s Bank is Growing Faster than the Market

Translated from Russian by J.Hawk

IIB increased its assets by 85% over the course of one year.

The International Invest Bank, which is part of
Poroshenko’s business empire, is growing faster than the market.

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According to National Bank data, IIB assets incrased from
1.74 billion hryvnya to 3.22 billion, or by 85%, which was the fourth best
result in the banking sector. The banks that grew faster than IIB were the
Mikhailovskiy, Alyans, and Accounting Center.

Calculations done by the “Insayder” indicate that the volume
of foreign currency deposits in Poroshenko’s bank increased by 24.2% and the
hryvnya deposits grew by 46.7%, while at the same time most banks were
experiencing outflow of acapital.

Poroshenko controls 50.08% of IIB shares through his “Praym
Essets Kepital” fund, and personally owns 9.92% of shares.

One should note that the banks owned by Aleksandr
Yanukovych, the oldest son of the former president also grew faster than the
market. They are under a temporary administration which is liquidating their
market positions.

J.Hawk’s Comment: Unsurprisingly, all parts of Poroshenko’s
business empire are doing well, not just his Roshen confectionary business.
However, considering the importance of Poroshenko’s banking sector, one has to
wonder whether the Rada bills giving the government the power to seize
individual deposits in exchange for, in effect, IOUs, were not aimed at
Poroshenko and not only the other oligarchs. Let’s not forget there is an
ongoing power struggle between the Yatsenyuk-Turchinov and Poroshenko factions
(one that Poroshenko seems to be winning, actually), and it includes the
struggle for the control of Ukraine’s rapidly shrinking economic pie.

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