KIEV, Jan. 10 – A small commercial bank controlled by the family of President Viktor Yanukovych plans to almost double its capital soon by injecting 100 million hryvnias through an upcoming private share placement.

Vseukrayinskiy Bank Rozvytku, or the All-Ukrainian Bank for Development, or VBR, plans to boost its capital to 210 million hryvnias from 110 million hryvnias, according to an announcement posted by the bank on its Website.

VBR is thought to be controlled by Oleksandr Yanukovych, the elder son of the president, who appears to have been expanding dramatically the family’s interests in the banking sector.

The development comes days after the appointment of Serhiy Arbuzov, 34, a little-known banker with close connections to the Yanukovych family, as the governor of the National Bank of Ukraine on Dec. 23, 2010.

Arbuzov’s mother, Valentyna Arbuzova, is the chairperson of the VBR board and is thought to be the key figure behind the bank’s increasingly aggressive expansion strategy.

VBR will issue 100,000 shares each having a face value of 1,000 hryvnias that will be sold to an unidentified investor for cash to boost the capital of the bank.

The “goal” of the share issue is to raise money that will be “channeled for increasing capitalization of the bank,” the announcement said. “The shares will be paid for exceptionally by cash.”

Oleksandr Yanukovych has last month obtained permission from the Anti-Monopoly Committee to purchase shares he does not already own in VBR.

VBR is the No. 138 bank in Ukraine and is currently managing about 348 million hryvnias in assets, a sharp increase from 80 million hryvnias a year ago, according to media reports.

The rapid increase in assets comes after the election of Yanukovych as the president in February 2010, and after he had consolidated his power by changing the constitution.

“We are the Bank that is worth cooperating with,” VBR said in a welcoming message on its Website. “Our strategy is aimed at maximum satisfaction of Client needs.”

VBR is apparently not the only bank that is associated with the Yanukovych family in Ukraine.

UkrBiznesBank, the No. 63 bank in Ukraine, holds and manages accounts of all companies that have either invested or are affiliated with acquiring or developing Mezhyhiriya, a huge land plot outside of the city of Kiev that had been obtained by Yanukovych through a controversial transaction several years ago.

The plot, which is about the same size as the Principality of Lichtenstein, the smallest country in the world, accommodates Yanukovych’s residence.

Arbuzov, who is now the governor of the NBU, has been running UkrBiznesBank for most of his professional career. He owns 2.3% of the bank.

Arbuzov reported 150.5 million hryvnias in personal income in 2009 – including 150 million hryvnias from ‘dividends, interest and royalty,’ according to tax papers submitted to Parliament in December. (tl/ez)