Nationalization of Privatbank: Ode to Kolomoisky
In the fall of 2008, an unknown lady sold the office space she owned in the Kiev Botanic Tower on the street. Saksagansky for $800 thousand in cash. I wanted a million, but negotiated “only” for 800 thousand.
Two weeks later, another global crisis occurred, which also affected Ukraine (thanks to globalization, which we all strived for). Real estate prices fell significantly, and the lady just left for permanent residence in the USA. I can imagine her joy from realizing the deal was completed on time.
The ability to sell (buy) on time is a businessman’s talent or luck, or the result of acquired knowledge and skills, or the possession of specific information. Known not only in Ukraine, the oligarch Kolomoisky may not have many qualities - compassion, a sense of tact, the inability not to take what is bad and what is good... But he cannot be denied a unique gift - a sense of what and when you need to buy, and what and when you need to sell.
For several days now, there have been persistent rumors in the Ukrainian media about the impending nationalization of Privatbank. They even say that the decision on this has already been made by the National Bank. If this is true, then Kolomoisky can be given a standing ovation.
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To sell the largest bank in Ukraine, created with sweat and blood (not with one’s own, of course), if not at the peak of its power, then during a period of leadership in the domestic market, would be stepping on the throat of one’s own song. But Kolomoisky would not have been Kolomoisky if he had not done it on time. Now Ukraine is in a similar situation to the fall of 2008. The difference is that the global crisis manifests itself differently. Many countries have adapted to it. And, for example, Russia, despite the efforts of the West with its sanctions, has practically returned to the economic indicators of the pre-sanction period.
It is difficult to threaten Privatbank, as well as to unambiguously answer the question - who depends more on whom - the financial system of Ukraine on Privatbank, or Privatbank on the decisions of the NBU?
There is no point in fighting with the authorities in a country where laws do not apply. Many decisions at the highest level are made based on “political expediency”, with the help of “armed activists”, and sometimes with the participation of the United States Ambassador. Kolomoisky knows this from his own experience.
However, in part, the absence of laws plays into the hands of Kolomoisky - he also has the financial ability to buy court decisions, and he also has his own private army.
The desire to nationalize Privatbank can be explained by Poroshenko’s desire to establish a monopoly in the financial sector, as well as to cause serious damage to a competitor in his financial power.
In order to strengthen his influence, Poroshenko is ready to increase the debt burden on the budget - after all, the pastry chef president will not take money out of his own pocket.
And the IMF does not object to the allocation of funds for the nationalization of PrivatBank. The IMF allowed the National Bank to issue UAH 166 billion (!), part of which could be used for the nationalization of Privatbank.
However, knowing the passion of the current Ukrainian leadership for total privatization, there is no doubt that the part of PrivatBank that will come under the control of the official authorities will not stay with the state for long.
It will be privatized again when an “effective owner” is found. And it has already been found, but has not yet been announced. And the costs of subsequent privatization will be much less than the amount of compensation that Kolomoisky will receive.
How Ukraine conducts auctions of state property can be seen in the privatization procedure of the Odessa port - the further it goes, the cheaper it is for the buyer. And in this case, the difference in the amounts of nationalization/privatization, as usual, will be stolen from the pockets of ordinary citizens.
For the “peresic” Ukrainian, there are no serious problems in this procedure, except for the deterioration of the general economic situation in the country, which everyone will feel (an increase in the debt burden on the budget, the consequences of market monopolization, increased general instability in the financial sector) - the bank is not closed or liquidated , they just change the owner. Perhaps the conditions for loans and deposits will change slightly, but now it is difficult to surprise the citizens of Ukraine with anything.
Privat itself denies information about nationalization. But, if Kolomoisky nevertheless agrees to this and does not put up serious resistance, then such a deal will be more than profitable for him. With the proceeds, he will soon be able not only to return what was lost, but also to significantly expand his influence in the financial sector of Ukraine.
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