Ukrainian banks continue to lose assets in the ATO zone

Photo: Reuters

Ukrainian commercial banks continue to lose cash, movable and immovable property in their branches located on the territory of the self-proclaimed DPR and LPR. Yesterday, the media reported the seizure of several banks. For example, branch offices of one of the largest Ukrainian banks Nadra Bank were plundered in Donetsk, reported the press service of the Chief Administration of the Ministry of Internal Affairs in the Donetsk oblast. The incident is being investigated under Clause 3 of Article 187 of the Criminal Code of Ukraine — breaking and entering into the vault and robbery. The amount of damages of Nadra Bank has not yet been estimated. Representatives of the financial institution did not disclose details of the incident to Capital yesterday.

The more gold, the better...

A branch office of Ukrsotsbank (Unicredit Bank) in Khartsyzsk (Donetsk oblast) was also seized. Its staff was denied access to documents and banking assets. In total, since the beginning of the ATO 6 Ukrsotsbank branches have been seized in the Donbas region.

Another high-profile incident occurred in the east of the country with Oschadbank. On Sunday the media reported that the branch office of the bank, which moved from Donetsk to Kramatorsk, left in the city millions of hryvnia, foreign currency, vehicles and weapons. According to a report in the press, as a result of such actions the forces of the breakaway republic got UAH 28.7 mn, US $1.2 mn and €99,700, 98 vehicles and 252 weapons (pistols and machine guns).

At the request of Capital to confirm or deny such information, Deputy Chief of the Press Service of Oschadbank Yaroslava Titova said: «Oschadbank declares that information about values and property supposedly left behind in the so-called DPR published by the media is false. Detailed information is available for law enforcement agencies. At the moment, there is an ongoing investigation.»

From such a response it is not entirely clear whether the bank denies the fact that employees consciously left the property in the bank office. In addition to this case, the press earlier reported that in Sverdlovsk and Alchevsk the financial institution lost three secure cash delivery vehicles and several automatic pistols.

Back in early December, representatives of the so-called people’s republics blocked the operation of a number of branches of Finance and Credit Bank in the Donetsk and Luhansk oblasts. «They sealed the central branch office in Luhansk, as well as part of the premises of the central branch office in Donetsk, compiled an inventory of the property and confiscated the keys to the branch office in Yenakiyevo (Donetsk oblast). The staff was forced to leave their jobs,» Director of the Regional Development Center of Finance and Credit Bank Oleh Daleko said.

Militants also seized offices of insolvent banks. For example, on December 11, the DPR’s gunmen seized premises of the Cambio and Brokbiznesbank in Donetsk. On December 9, according to the press service of the regional police, armed men seized the Donetsk branch office of Forum bank. After that, allegedly more than US $50,000 was stolen. The incident is also under investigation.

The banks are unlikely to get back any assets or money that was seized. «As long as these territories are under the control of illegal armed groups it will be impossible to return anything from cash, bank metals, banking equipment and premises,» said Director of the FINEX Capital Investment Company Ihor Kohut.

Pseudo-system

In turn, the leadership of the self-proclaimed republics may use banking assets for their own purposes. For example, to create their own banking network, as the separatists repeatedly stated. «It will be possible to use the seized equipment only for its intended purposes, i.e. for banking activities and operations. The only thing that needs to be developed is special software for connecting to the system of the so-called Central Bank of the breakaway republics. In addition, terrorists can easily get access to customer databases from seized financial institutions with which they can continue their work,» says Chairman of the Ukrainian Interbank Currency Exchange Anatoliy Hulei.

As previously reported, the so-called Central Republican Bank (CRB) of the self-proclaimed Donetsk People’s Republic was opened in October. The bank has been opening accounts since October 13. In early December, the leadership of the CRB announced the opening of 57 branch offices of the financial institution in different localities of the region. Luhansk militants also reported their plans to open a similar «Bank of Novorossia» at the offices of PrivatBank.

At the same time, not all the seized branches will be as useful to separatists. For example, branch offices of Ukrsotsbank in the ATO zone were off-balance. «In other words, they were connected to the central system in Kyiv. After their seizure, the militants got only empty rooms with computers, but without access to databases and software needed for conducting banking operations,» explained representatives of the bank’s press service.