In 2024, banks being liquidated by the Deposit Guarantee Fund for Individuals received UAH 433.7 million from the repayment of debt on restructured loans. This was reported by the press service of the Deposit Guarantee Fund.
It is noted that of these funds, almost UAH 60.0 million came from the repayment of loans to individuals in accordance with the terms of repayment of loan debt during martial law. Another UAH 373.7 million was received from the repayment of loans to business entities.
In particular, a significant increase in revenues from the repayment of debt on loans to business entities was observed in the fourth quarter of last year.
As explained by the Deposit Guarantee Fund, such dynamics are, among other things, due to the restructuring of loan agreements of borrowers who have a significant amount of debt obligations to insolvent banks.
“Restructuring allows you to avoid lawsuits and maintain a positive business reputation. Borrowers understand this and are more responsible about repaying debts. For example, if in 2022 the proceeds from loan restructuring programs amounted to about UAH 176 million, then in 2024 this figure increased to UAH 433.7 million – actually 2.5 times,” the DGF emphasizes.
How to repay debt
As reported by the DGF, simplified loan repayment conditions apply for individual borrowers during the period of martial law: 0.001% per annum and 1 kopeck of commission, provided that the debtor repays from UAH 10 thousand per month for mortgage loans, 1 thousand UAH – for other loans (except for card loans of over UAH 100,000 – for such loans, repayment should be UAH 5,000 per month).
“The borrower can fully repay the loan on acceptable terms during the bank’s liquidation period. If the loan debt is not repaid in full during the bank’s liquidation period, the remaining debt on restructured loans is sold last,” the DGF notes.
To join the restructuring program for individuals, the individual borrower must submit an application to the bank for joining the debt repayment terms by August 31, 2025.
For legal entities and individual entrepreneurs, recommended restructuring terms have been in effect since August 2023, providing for: a down payment of 5%, monthly amortization and full repayment of the principal amount of the debt, as well as interest and fees during the liquidation procedure.
For the restructuring period, interest on the loan is set depending on the restructuring period and is paid monthly. The longer the debt repayment period, the higher the rate: less than 18 months – a rate of 0.1% per annum, 19-24 months – 3%, more than two years – 5%. The restructuring period is set according to the client’s request, but full repayment must take place no later than six months before the completion of the liquidation procedure.
As explained by the DGF, legal entities and individual entrepreneurs who have a loan from a bank that is being liquidated should contact the creditor bank for advice on the necessary package of documents and a further action plan for restructuring.
It should be noted that the assets of insolvent banks are sold by the Deposit Guarantee Fund of Individuals at auctions at prices that are significantly lower compared to their book and even appraised values. As of early April 2024, 54 insolvent banks were in the process of liquidation. The book value of the sold assets of insolvent banks was UAH 631.2 billion. However, their estimated value was determined at UAH 92.3 billion.
