Sense Bank was one of the largest Ukrainian commercial banks. Prior to its nationalisation in July 2023.
Prior called Alfa-Bank (legally it was not connected with the Russian Alfa-Bank, but it had the same shareholders); on December 1, 2022, the name of the bank was changed to Sense Bank.
In 2016 and in 2022 the bank largest shareholder were Russian businessmen Mikhail Fridman (32.86%), Petr Aven (12.4%) and Andrey Kosogov. They controlled the bank through ABH Financial Limited and ABH Ukraine Limited.
In October 2022, one of the beneficial owners of the bank, Russian businessman Mikhail Fridman, sent a letter to the chairman of the National Bank of Ukraine with a proposal to transfer the shares to the state. As an alternative measure, an additional capitalization of the bank by $1 billion was proposed. This offer ultimately remained unfulfilled, after the European Commission and the Bank of England declined to give legally-binding opinions. In March 2023, the National Bank of Ukraine declared the ABH Financial Limited status "dubious" and instated a temporary ban on the use of its and ABH Ukraine Limited voting rights.
On May 29, 2023 Ukraine's parliament (Verkhovna Rada) adopted a law on the nationalization of Sense Bank. The law stipulates that it is possible to withdraw a systemically important bank from the market in the absence of signs of insolvency - in case of applying blocking sanctions to the owner of a significant participation in it. On June 16, 2023, President of Ukraine Volodymyr Zelensky approved this law. In this law is legislation allowing the government to declare insolvent and, if needed, nationalize lenders from owners that came under sanctions due to Russia’s invasion. The following day the bank's holding company ABH Ukraine Limited threatened to bring the case to international courts if the nationalization went through.
In June 2023 ABH Ukraine Limited asked the Council for State Security to allow the sale of its shares to a licensed European investor. The proposed sale, which requires multiple institutional approvals, is for the symbolic price of one euro and precludes payments to sanctioned shareholders. The investment offer is made through the Cyprus-based company Karswell Ltd, owner of Polish bank Plus Bank SA. Plus Bank is part of Polish billionaire Zygmunt Solorz-Żak's holdings.
Criticism of nationalisation
In July 2023 a Bloomberg article stated:
"The International Monetary Fund, in a comment following the first review of its lending program to Ukraine, said that the country should avoid “excessive interference” in the banking sector, “including the prospect of nationalization for reasons unconnected to financial stability” due to possible risks."
In July 2021 Atlantic Council states that Ukraine had a "faltering" effort with the privatization of state-owned banks, and adding a fifth state-owned bank will increase state-owned banking assets to over sixty percent. Once financial institutions fall into public hands, Ukrainian courts have historically upheld the decision of nationalization.
The International Monetary Fund, in its July 2023 Extended Fund Facility update, expressed concern over the possible nationalization, as it may not improve financial stability.
tass.com
