Cabinet refuses to approve Oschadbank strategy

Ukraine’s Cabinet of Ministers decided on April 2 to
not approve the strategy of development for state Oschadbank (OSCHAD), finclub.net
news site reported on April 7. According to the source, the ministries of
economy and of reintegration have some comments and suggestions to the strategy
which have been provided by the bank’s supervisory board. The board was granted
a week to refine the strategy.

By law approved in 2018, the state bank’s supervisory
board has to prepare the bank’s development strategy and offer it for approval
by the bank’s owner. A second refusal of the shareholder to approve the
strategy allows the cabinet to dismiss the entire supervisory board of the
bank. Oschadbank’s supervisory board under this law was appointed in
June-November of 2019. 

Alexander Paraschiy: At this stage, it is hard to say whether some ministries indeed have
valuable comments regarding the bank’s strategy, or if there is a political
will to not approve the strategy and, based on this, fully replace the
supervisory board of Oschadbank. The latter looks possible if the current
cabinet (or president) has its own vision on who should be on the board.
Notably, all the independent members of the board were appointed under the two
previous prime ministers, and half of them were selected to the board under the
previous president. If the board is replaced this would question the independence
of its new members (and might raise discontent from Ukraine’s western
partners), but it won’t affect the bank’s fundamentals.