Bank Forum, a large Ukrainian bank owned by Germany’s Commerzbank, has been the target of a street protest outside its headquarters in downtown Kyiv and a media smear with all the earmarks of a coordinated attack on its reputation. In an Oct. 8 interview with the Kyiv Post, Forum’s chairman of the board, Yaroslav Kolesnik, denied that his bank has been crippled by bad loans or is about to be sold by its German parent. But he was vague about exactly who is behind the apparent attempts to discredit his bank.
KP: How would you characterize the health of your bank?
YK: You know, the overall health of our bank has been very well characterized by the National Bank of Ukraine: we are absolutely stable. We are operating in a normal and stable regime, and there is no basis for saying that we have issues that require further explanation.
KP: I recently read a report from a Kyiv-based investment bank stating that Bank Forum is considering a $190 million share capital increase, following a $275 million capital injection by its parent Commerzbank earlier this year. That’s a lot of money. Do you have a problem with money?
YK: No. As of today, we are in line with all standards for capital adequacy. The fact of the matter is that this is a standard and planned action by Commerzbank to develop Bank Forum in Ukraine. We are planning to next year intensively develop growth of active operations by 25 percent.
KP: What is the nature of this growth?
YK: For lending – active lending to business in Ukraine. And by the way, we are a universal bank, crediting the purchase of autos, mortgages and, of course, small, medium-sized and large businesses.
KP: How about problem loans?
YK: I don’t know any bank in the world that doesn’t have problem loans after the crisis. Yes, around 23 percent of our loan portfolio currently qualifies as problem loans. But these loans all have collateral, good collateral. It’s just that the process [of confiscation] is long, requiring courts and bailiffs and time to take possession of the collateral. But I can tell you that by next year, we will have significantly improved the quality of our loans.
KP: I have heard a rumor from Germany that Commerzbank is under pressure by the German government (which owns a 25 percent stake in Commerzbank) to sell Forum Bank.
YK: That information is old, from 2009, and appeared against the background of discussion about whether Commerzbank was structurally spread thin following the merger of Commerzbank and Dresdner bank. But I can tell you that during that time a decision was taken by Commerzbank to stay in Ukraine because the Ukrainian market is interesting. So an alternative to close down a different business in Western Europe was taken. That decision was taken in 2009.
KP: So can you 100 percent exclude the possibility of Forum Bank being sold.
YK: I can say 100 percent that I know of no plans even close to that subject.
KP: How about the recent wave of so-called “black PR” against your bank (that Forum is allegedly unstable) – why was there such a reaction on your part if it isn’t true?
YK: There wasn’t a reaction directly to black PR. We addressed this issue the first time, if you recall, during a [recent] press conference, where I simply said that this wasn’t worthy of commentary, because it’s just groundless statements with no basis. However, I also unequivocally said that we are suing the media where this appeared.
KP: The finger has supposedly been pointed at delinquent creditors of your bank, but why would they do such a thing if they have already got the money and don’t intend to pay it back.
YK: This was one of the versions being discussed, but I am very cool on this version and I can tell you today that I have grown even cooler. I don’t think that this is being done by one of our creditors.
KP: Then tell me one last thing: Do you believe that foreign banks in general may be planning to exit the Ukrainian market – having entered in a herd and now finding themselves hungry and competing for the few customers that exist?
YK: Of course, it’s hypothetically possible, but it would have to take place after a serious transformation in the country, but I think it’s highly unrealistic. Ukraine was, is and will remain a very attractive market.
Kyiv Post staff writer John Marone can be reached at [email protected]
