Government discloses list of banks for recapitalization.

Yesterday Acting Minister of Finance Ihor Umanskiy disclosed the list of seven banks, where the state is going to inject additional capital: Nadra (NADR), Finance&Credit, Ukrprombank, Ukrgazbank (UGZB), Rodovid (RODB), Imexbank and Bank Kyiv. According to Umanskiy, recapitalization will take about a month, during which the government and NBU are going to complete due diligence and finalize a program of capital increase. According to Ihor Umanskiy, the state could demand acquiring at least 75% stake in each of the banks, while earlier the government revealed a plan to get a minimum of 50%. Alexander Paraschiy: Seven banks’ aggregate share capital as of Jan. 1, 2009 was UAH 6 bln; with the planned injection of UAH 20 bln, the state is capable to increase its stakes in each of the bank to 77%. We expect recapitalization to be conducted via additional share issues, at least at current shares’ par value. This would mean that recapitalization will be beneficial for minority shareholders of the banks that are currently traded below par (UGZB and RODB).