The National Bank adopted the decision on declaring the bank “Contract” insolvent, as it is said in the NBU Board resolution dd. 6 October 2015 №671, the NBU press-service reports.

It is reported that in September 2015 the National Bank received complaints from legal entities on payment failures in the bank “Contract”. As a result, the adviser was invited to the bank for detailed studying of the situation. 

The adviser, as NBU states, detected the significant number of delayed client payments, concealed under different balance items. Moreover, the shortage of more than UAH 12 mln at the cash-desk was found (UAH 5.1 mln of actual against UAH 17.1 mln as per reporting data, submitted to the National Bank). The bank management explained such discrepancy by the incorrect preparation of the report.

For the improvement of financial result, the bank also used dummy securities transactions, which actually is the misstatement of financial reporting, NBU reports.  

Since the adviser was appointed, neither management, nor bank owner applied to the National Bank regarding financial recovery plans, though under such conditions the bank functioning would be impossible without owner’s support. 

Instead of this the sale of bank property to third parties started without any receipt of funds with payment grace period, at the expense of resale of securities etc.

The insufficient amount of liquid funds, failure to make client payments and systematic misstatements of financial reporting created threats for depositors and lenders of the bank “Contract”.

The bank is declared insolvent based on the paragraph 3 of the first part of article 76 of the Law on Banks and Banking, as per which the NBU undertakes to take the decision on declaring the bank insolvent in case of non-fulfillment of 2 or more percent of its obligations to depositors and other lenders within five consecutive working days.