The European Bank for Reconstruction and Development (EBRD) is looking into the possibility of providing resource support to between 10 and 20 Ukrainian banks, EBRD president Thomas Mirow said at a press conference on Wednesday.
Mirow said that final decisions regarding such efforts could be made within two weeks.
He said that the EBRD would be able to earmark up to $600 million in support to Ukrainian banks in 2009. The support would be implemented through acquisitions of charter capital, subordinated loans and other facilities.
Mirow said that prerequisites for commencing a partnership include an accurate financial audit of a bank, good quality corporate management and operational transparency. In addition, the EBRD plans to provide funds only if the banks are prepared to lend to the real sectors of the economy.
Mirow added that European banks would support their subsidiaries in Ukraine, as such banks would likely not be facing any serious risks.
He said that causes for concern in regards to Ukraine included the rising risks in the economy, which could make borrowing inaccessible for local companies.
It was earlier reported that the EBRD lowered its development forecast for the Ukrainian economy at the end of January 2009. The bank now forecasts that the country’s GDP will shrink by 5 percent. In November 2008, the EBRD said Ukraine’s GDP growth would only slow to 1 percentin 2009.
Ukraine’s real GDP growth in 2008 came to 2.1 percent, slowing from 7.6 percentin 2007.
Ukraine’s Presidential Secretariat forecasts the GDP decrease for 2009 at 3 percent -5 percent.
The country’s government projects 0.4 percentGDP growth for this year. However, the majority of experts have forecast a GDP decrease of 5 percent.
The EBRD’s total investment in Ukraine in 2008 came to 835 million euro, an increase of 29 percentfrom 2007 (647 million euro).
