22.02.2012, 12:56Schoenherr's Kyiv partner Denys Sytnyk spoke at the First Banking Congress in Ukraine
On February 15, 2012 the Annual Banking Congress took place in Kyiv with support of the Central European law firm Schoenherr as an exclusive legal partner of the event.
The congress featured top executives from Ukraine’s most prominent banks, including the Head of Representative office of BNP Paribas in Ukraine Mr. Dominique Menu; Chairman of the Board of Ukrsotsbank (UniCredit Group), Chairman of the Board of the Independent Association of Ukrainian banks, Mr. Boris Timonkin; Raiffeisen Bank Aval’s Board Chairman Mr. Volodymyr Lavrenchuk; Chairman of the Board of Bank Forum (Commerzbank Group) Mr. Vadym Berezovyk and others.
With European banks set to continue deleveraging, the congress was a great opportunity to discuss the latest trends and developments in the domestic banking sector.
Denys Sytnyk, a partner with the Kyiv office of Schoenherr, jointly with Mr. Vadim Brailovsky, Managing Partner of European Capital Management, made a speech on transactions with non-performing loans (NPLs) in Ukraine and the benefits banks could find in the sale or acquisition of NPL portfolios.
Throughout the CEE/SEE region, the percentage of non-performing loans to total loan receivables has increased dramatically during the current economic cycle.
Interest has started to pick up at a number of banks as default rates begin to increase and banks start to face liquidity problems.
According to Mr. Sytnyk, the Ukrainian NPL market is dominated by local factoring companies and collection agencies buying loans from Ukrainian banks, adding that some Ukrainian banks have started moving portfolios cross border into unregulated SPVs.
“When deciding whether to use a local or a foreign purchasing vehicle, the parties should not only focus on regulatory aspects, but should also be aware that a cross-border assignment may trigger the maximum interest rate limitations for cross-border loans, as set by the NBU,” he said.
Mr. Sytnyk also pointed out that irrespective of whether a local or a foreign purchaser is involved, banking secrecy must be considered.
Overall, the quality of assets remains a big problem for Ukrainian banking sector. While the general level of non-performing loans is now stabilizing, they remain at a dangerously high level of around 40 percent.
For those interested in the legal and regulatory issues related to acquisition of NPLs, the firm’s practice guide on "Non performing loans in Central Europe – disposal / acquisition strategy" can be ordered for free or downloaded at Schoenherr’s website: http://www.schoenherr.eu/news-publications/publications/non-performing-loans
Schoenherr is a leading corporate law firm with a strong base in Central Europe. From offices in Belgrade, Bratislava, Brussels, Bucharest, Budapest, Ljubljana, Kyiv, Prague, Sofia, Vienna, Warsaw and Zagreb more than 300 professionals provide legal services to national and international clients. The firm has a long standing tradition of advising clients in all fields of commercial law providing seamless service that transcends national and company borders. The combination of high quality advice and efficient problem solving in complex commercial mandates and transactions is at the heart of Schoenherr’s philosophy. In all jurisdictions, Schoenherr’s operations correspond with the local legal standards and rules of conduct.
