Cabinet refuses to approve Oschadbank strategy

8 April 2021

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.

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