Alfa Bank no longer exists: what awaits depositors

According to the data of the National Bank of Ukraine, as of March 1, 2022, Alfa-Bank ranked 5th in terms of total assets (UAH 123,77 billion) among 69 banks operating in the country. Advisor to the Head of the Office of the President Michael Podolyak said that the procedure for the nationalization of the former "Alfa-Bank" with the new name "Sense" has already been launched. What does this mean and whether investors should worry - read the material.

“Alfa-Bank has been rebranded. Today it is already Sense bank. There are already procedures for nationalization as such. The nationalization of Alfa-Bank will look different from PrivatBank, because there is a much smaller circle of individuals with deposits, etc.”Podolyak said.

As the representative of the OPU noted, the procedure for the nationalization of Sense Bank is taking place in accordance with the law, so there is no panic among depositors or legal entities involved in the bank.

Recall that legally the Ukrainian bank is not connected with the Russian Alfa, but has the same shareholders. Almost 90% of the bank's shares are owned by Russian businessmen Andrey Kosogov (40,96%), Michael Friedman (almost 32,86%) and Peter Aven (12,4%). Another 9,9% stake is owned by UniCredit Bank and nearly 3,9% by The Mark Foundation for Cancer Research. Fridman was sanctioned by Ukraine at the end of September. And a few days later, his assets worth 2 billion hryvnias were arrested.

What does this mean for bank customers?

AIN.UA turned to Evgeny Dubogryz, former deputy director of the NBU financial stability department and Case Ukraine expert, to assess how the nationalization will affect the bank's clients and what they should prepare for. In short: for bank users, this process does not carry risks.

“Users and investors have nothing to fear. It's about the safety of their funds. Now it seems that the bank will not be withdrawn from the market, but will be nationalized. Such a change in the shareholder (from Russians to the state) should have a positive impact on the financial condition and behavior of customers; in other words, customers will stop “running away” from the bank because of Russian and sanctioned shareholders. That is, in the medium term, it is not worth worrying about the funds in the bank in case of its nationalization,” he said.

The main difficulty in the nationalization of Alfa for the state is precisely the need for additional capitalization. Indeed, in the event of a change of ownership, in order to maintain the bank on the market, the country will have to allocate a huge amount from the budget - in the conditions of a "war" economy and a record budget deficit. Most likely, this amount will be raised only through foreign loans and grants.

Also, in case of a negative development of the situation, the deposits of individuals will theoretically be protected: at the beginning of the war, the state guaranteed 100% protection of deposits of individuals. However, it is not yet clear how this norm will work in practice in the face of a state budget deficit.

But for legal entities it can be much more difficult: they did not come under this protection..

Recall that we previously reported that should the account holders in PrivatBank and Oschadbank need to strain themselves. In Ukraine, they are preparing for the bankruptcy of systemic banks, and the losses will be compensated at the expense of Russia.

We also reported that PrivatBank introduces new account verification, refugees abroad may suffer: details.

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