Business Briefs

Economy

Ukraine's preliminary current account deficit for the first five months of 2006 totalled $1 billion, or 3% of gross domestic product for that period, down from 4% of GDP in the first quarter, the National Bank of Ukraine reported.

The state's consolidated budget revenues rose by 24% year-on-year to Hr 59.2 billion ($11.7 billion), or 35.6% of gross domestic product for the first five months of this year, while expenditures grew by 33% to Hr 58 billion ($11.5 billion), the Finance Ministry reported.  The consolidated budget balance, calculated on a cash basis, thus recovered to a surplus of Hr 1.2 billion, or 0.7% of GDP in the first five months of 2006, after running a deficit of Hr 800 million (or 0.7% of GDP) in from January to April.

Fitch Ratings announced June 29 the launch of its national ratings scale for Ukraine.  It has assigned the ratings of 'BBS (ukr)' with a Stable Outlook to the First Ukrainian International Bank and 'AA (ukr)' with a Stable Outlook to The State Export-Import Bank of Ukraine (Ukreximbank).  The rating of 'AA+ (ukr)' with a Stable Outlook assigned to Ukraine becomes the bench-mark against which all other issuers or issues within Ukraine will be assessed.  Dmitri Surkov, Managing Director and Head of Fitch's CIS office in Moscow, said that "our decision to introduce the national ratings scale in Ukraine is driven by the rapid development of the domestic corporate bond market and the consequent demand for this product from issuers and investors."

Banking & Finance

The National Bank of Ukraine has introduced a rule that requires liquidators of commercial banks to have a minimum of three years work experience, according to the Nub's resolution from June 15.  The resolution requires liquidators to have working experience in the area of auditing, legal services, or in the banking system.  Previously, they were required to have experience working exclusively in the banking system with no minimum level of experience.  The resolution also stipulates that the unsold assets of a bank being liquidated can be transferred to another bank or another business that has been performing professional operations on the markets of auditing, consulting, financial or legal services for at least three years.

The state-owned Ukrainian Export-Import Bank (Ukreximbank), one of Ukraine's largest banks by net assets, announced that it has begun issuing MasterCard Electronic smartcards, with built-in microprocessors.  The bank said in a statement that it has begun issuing the cards as an alternative to the Maestro payment cards, with traditional magnetic technology.

Prominvestbank, Ukraine's third largest bank by assets in the first quarter of 2006 ($2.82 billion), has attracted a $60 million, one-year syndicated loan at LIBOR+3.2% per annum arranged by Deutsche Bank and ING Bank.  Prominvestbank said it would use the loan to finance its clients' external economic contracts.

Ukraine's Finance Ministry has selected Ukrprombank (Ukrainian Industrial Bank) and Germany's Dresdner Bank to service, jointly with the World Bank, the World Bank's Equal Access to Quality Education in Ukraine project, for which the World Bank has allocated a loan of $86.6 million.

Russia's Vneshtorgbank said it may cancel plans to merge its Ukrainian holdings Vneshtorgbank (Ukraine) and Mriya Bank and sell Vneshtorgbank (Ukraine).  The Russian bank said that it is mulling the option of selling the Ukrainian Vneshtorgbank's license due to a number of difficulties with the merger of Mriya Bank in Ukraine.  It said that if the Ukrainian Vneshtorgbank is sold, then Mriya may take its name, adding that the issue of what will happen with Vneshtorgbank will be decided by the end of this year.

Kyiv-based VABank, one of Ukraine's largest banks by net assets, has obtained a syndicated loan of $10 million for 11 months at LIBOR+3.5%.  The bank said in a statement that the syndicate's participants are U.S. and Western European banks.  VABank plants to use the loan to finance commercial projects.

Fast Moving Consumer Goods

The International Finance Corporation, the private financing arm of the World Bank, has issued a loan of $100 million, including a syndicated loan of $55 million, to Velyka Kyshenya, one of the largest retail trade networks in Ukraine.  Velyka Kysheniya will use the loan to refinance its current debt and open more than 35 new Velyka Kyshenya supermarkets and hypermarkets in Ukraine during the 2006-2008 periods.  Velyka Kysheniya presently operates 27 supermarkets and hypermarkets, 16 of which are in Ukraine's capital, Kyiv.  Since the start of this year, the company has opened one hypermarket in Poltava, and one supermarket each in Kiev, Uzhgorod and Mykolaiv, and plans to open supermarket in Yalta and Lutsk.

Real Estate

Savant, an international construction consultancy with offices in Kiev and Kharkiv, announced June 27 that it will advise Ukraine's Shaktar Soccer Club on strategic matters for the construction of its $250 million stadium in Donetsk, eastern Ukraine.  Savant said that the stadium will be the first one in the country designed to meet UEFA and FIFA requirements for five-star accreditation.  The stadium will be able to accommodate 50.000 spectators and will include ultramodern facilities.  The stadium's construction began in June and is anticipated to take two years to complete.

Deol Partners, the exclusive leasing agent for Kiev's Leonardo complex, announced June 26 that it has leased 82% of the total area of the recently completed class A business center, located in the capital's central business district.  The company said that Leonardo's office spaces currently accommodate leading worldwide and national companies, including Reuters, Morgan Stanley, MasterCard, Peterka&Obolensky and others.

Kyiv Post

July 6, 2006