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Private No Longer: Ukrainian Government Nationalizes Leading Lender PrivatBank

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The Ukrainian government says it will nationalize the country's largest bank in an effort to avoid a financial collapse in the former Soviet republic that is locked in a military and political standoff with neighboring Russian Federation.

"We are sure that moving the bank into state ownership is the only possible way to save the money of the bank's clients and to save the financial system", the central bank said in a statement.

The bank controls one third of Ukraine's deposits and also has branches in Baltic countries.

In the case of PrivatBank, a respected Western firm that is well known to the EBRD will be advising the Ukrainian authorities in the bank's management and transformation, the bank said.

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The government of Ukraine made a decision to nationalize the country's largest bank, PrivatBank, the half of which shares are owned by Ukrainian oligarch Ihor Kolomoyskyi, the statement published on the website of the Cabinet says.

Found a spelling error?

The nationalization comes just days before parliament has to vote on next year's budget, which must stick to a shortfall of 3 percent of economic output, as agreed with Ukraine's global backers. Oleg Gorokhovsky, PrivatBank's deputy chairman, wrote on Facebook that the bank had seen increased withdrawals in recent days of 2 billion hryvnia ($76 million) daily against previous peaks of around 1.5 billion hryvnia ($57 million). Shareholders requested government assistance, it said.

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