Simplified capitalization of the banks through merging: Discussion of the perspectives
On 14 December, Deloitte together with Sayenko Kharenko Law Firm held a business breakfast on “Simplified capitalization of the banks through merging: Discussion of the perspectives” that brought together the representatives of business and banking sector at Hilton Kyiv Hotel.
The event included a panel discussion of the regulators, during which they reviewed the concept of the National Bank of Ukraine’s draft law. The representatives of the Securities and Stock Market State Commission (SSMSC) and the Antimonopoly Committee provided their comments on the chances of implementing the regulatory actions within the framework of simplified procedures. In addition, they discussed the most important aspects of the banks’ capitalization by the participants and regulators. The panel discussion was attended by Oleksandr Bevz, Director of the NBU Registration and Licensing Department, Oliana Hordienko, SSMSC member, and Serhii Lakhno, Director of Competition Policy Department of the Antimonopoly Committee. Vladyslav Rashkovan, SDcapital Partner, moderated the panel discussion. “By 2020, there will be only two types of banks left: those that will be able to flexibly adapt to rapidly changing business realities, and those that have left the business,” said Vladyslav Rashkovan during the session.
The panel discussion of the consultants was centered on framework of the agreement between the banking institutions, namely on financial and legal due diligence, net asset valuation, and deal structuring. Dmytro Anufriev, Deloitte Partner, Oleksandr Nikolaichyk, Senior Associate at Sayenko Kharenko law firm, and the discussion moderator Andrii Volkov, Managing Partner at Investohills Capital, discussed practical aspects of merging, typical difficulties occurring in practice, and potential solutions as well as the challenges related to execution of the arrangements between the shareholders, and aspects of undergoing regulatory approval procedures.
“Overstated expectations for bank’s value and distrust of the parties are the main issues that may suspend merging of the banks. Recognition of rational adjustments to the bank’s net assets combined with an adequate assessment of the respective changes, and risks related to the counterparty bank – all this establishes the basis for reaching consensus between the parties,” stated Dmytro Anufriev.