KYIV, June 3 – The National Bank of Ukraine (NBU) declared Megabank (Kharkiv) insolvent, Viktor Subotin, the majority bank shareholder (70.56% of the shares), said on Friday.

On June 2, the National Bank declared Megabank insolvent. This is the first time a bank was classified as insolvent during the war," the bank's press service quoted Subotin as saying.

Numerous problems in Megabank’s activities were not caused by the imposition of martial law - among them were significant violations in terms of credit risk assessment, systematic lending to related parties, a significant amount of non-core assets on the balance sheet, and failure to comply with the capitalization/restructuring plan based on the results of the 2021 stress test, the National Bank of Ukraine said.

Megabank's problems began long before the start of the war. On February 3, 2022, the board of the National Bank of Ukraine decided to classify the bank as problematic," Deputy Governor of the NBU Yaroslav Matuzka said at a briefing on Friday.

First Deputy Governor of the NBU Kateryna Rozhkova said the bank was supposed to carry out additional capitalization by UAH 2.5 billion based on the results of stress tests in 2020, but did not do so.

The shareholders of Megabank did not provide financial support to the bank for the timely and full fulfillment of obligations to the bank's," the NBU said.

The NBU also emphasized that with the entry into force from April 1, 2022 of the law on a 100% guarantee on deposits of individuals during martial law, all Megabank depositors will receive full refunds from the Deposit Guarantee Fund, including interest accrued before early June. The possible total amount of guaranteed payments is UAH 4.419 billion. (om/ez)