PrivatBank has a Latvian subsidiary by the same name which comes under FKTK's regulatory remit.
"FKTK is following the situation in Ukraine and will provide more detailed information when we will receive more detailed information from Ukrainian colleagues. Yesterday evening, the Ukrainian government adopted a decision to nationalize PrivatBank in Ukraine where it is a bank of systemic importance," FKTK said in a press statement.
"Nationalization means that 100% of the bank's shares are taken into state ownership. The decision was taken in order to stabilize the bank's operations and to protect the interests of customers. Ukrainian officials said in a statement that the transitional period begins on 19 December," it added.
Ukrainian PrivatBank is the largest shareholder of Latvian PrivatBank, owning 46.54% of the Latvian bank's shares. It is the 12th largest bank in Latvia by assets but is not classed as being of systemic importance.
As previously reported by LSM, PrivatBank Latvia has already been subjected to several penalties from FKTK over the last year.
On December 11, 2015 it was subjected to a 2 million euro fine and told to change its board after media reports prompted an investigation of its activities between 2012 and 2014 when according to a report by auditing firm Kroll, the bank was alleged to have helped transfer huge amounts of cash stolen from Moldovan state coffers.
In August this year, the Italian central bank said it was closing the Italian branch of PrivatBank, which was part of the Latvian operation.
An agreement was signed in 2012 whereby the Latvia regulator also acknowledged that Latvia will guarantee deposits held in PrivatBank Latvia's Portuguese branch, which has a website in Portuguese and Russian, but with a Latvian contact telephone number. However, that website seems not to have been updated since July this year as it still contains links to the defunct Italian branch.
PrivatBank also has a branch in Cyprus.
Later on December 19, PrivatBank Latvia told LSM in a statement: "After the government of Ukraine took the decision to nationalize Ukrainian PrivatBank, Latvian PrivatBank continues operating in a standard manner. AS PrivatBank is an independent Latvian bank, which operates according to the rules of the Latvian banking sector. The Bank Board in the body of five members fully conducts the Bank management. AS PrivatBank continues running its business activities and customer servicing as usual and without any restrictions."
