From 2027, bankrupt banks will be sold to multiple investors

Starting from January 3, 2027, the opportunities for withdrawing insolvent banks from the market in Ukraine will expand. The Deposit Guarantee Fund for Individuals (FGVFL) will be able to simultaneously apply several methods of resolution and attract multiple investors for one bank, which should increase the number of transactions for the transfer of assets and liabilities. The new rules are provided for by law No. 4962-IX. The Fund will be able not only to liquidate a bank but also to sell it completely, create a transitional bank, or transfer assets and liabilities to another financial institution through the P&A (Purchase and Assumption) mechanism. From 2027, these tools can be combined. For example, part of the assets and liabilities of an insolvent bank can be transferred to one receiving bank, while the shares of the bank itself can be sold to another investor. The FGVFL expects that the new mechanism will allow for more frequent use of P&A instead of complete liquidation of the bank. This could become a way for operating banks to quickly increase their asset volume and customer base. Investors will have more options to enter the Ukrainian banking market, which should create better conditions for depositors and creditors of troubled banks. The new law also allows for repeated open competitions for the resolution of banks, and pre-qualified investors will have more time to familiarize themselves with information about the bank before purchasing.

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