The drama of Ukrainian banking
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The drama of Ukrainian banking

It is all about staging when performance is in question.

Valeria Gontareva | Photo: Reuters

“Watch out for Gontareva,” advises an investment banker as we settle in to moderate a panel on Ukrainian banking at the London offices of Hogan Lovells this May.

It is sound advice.

Valeria Gontareva was the central bank governor who floated the hryvnia and presided over the closure of more than 100 Ukrainian banks, as well as the nationalization of Privatbank – the country’s biggest lender, until then controlled by powerful Ukrainian businessman Igor Kolomoisky.

Fearing for her safety, she fled to London in 2017, where she was run over in a hit-and-run incident in 2019, shortly before her home in Kyiv was razed by arsonists.

Just before the panel, Gontareva asks Euromoney where she should sit. She suggests that it should not be next to Kateryna Rozhkova, a similarly steely individual who now serves as first deputy governor of the National Bank of Ukraine (NBU).

Full-blown attack

Euromoney soon learns why, as Gontareva launches a full-blown attack on the NBU’s high interest rates and foreign-exchange controls. She suggests they are facilitating the import of luxury cars and, above all, rewarding the country’s banks with huge profits for doing almost nothing – unnecessarily so, given the strength of the country’s foreign-exchange reserves.

Commercial bankers, who Gontareva refers to as “fat cats”, are also not spared. She says they should not be proud for posting record profits when it is primarily thanks to putting the money into government securities at sky-high rates, rather than lending, especially to small and medium-sized businesses.

After the panel, one Ukrainian banker mutters that he thinks Gontareva is too harsh, despite the applause her comments elicit from the audience. The banks are dealing with the biggest war in Europe since 1945, in Europe, he points out.

But there are no hard feelings, as the commercial banker, Gontareva and Rozhkova all catch up over a much-needed and jovial nicotine break on the pavement outside afterwards.

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