April 27, 2018 / 5:16 PM / a year ago

Ukraine’s PrivatBank aims to return to profit in 2018

KIEV, April 27 (Reuters) - Ukraine’s largest bank, PrivatBank, said on Friday it expects to post a profit in 2018, recovering from losses of the two previous years during which time it was nationalised.

The Ukrainian government took over Privatbank in December 2016 after finding a capital shortfall of more than $5.5 billion.

According to the central bank, over 95 percent of corporate loans extended by the lender before nationalisation had gone to companies linked to the former owners and their affiliates.

Its supervisory board has now approved a five-year development strategy that envisages preparing the lender for selling to foreign investors, the bank said in a statement.

“Our key strategic objective is profitability. The Bank’s Development Strategy, approved today, sets out a clear and efficient road map towards the achievement of this goal,” the head of the board, Engin Akchakocha, was quoted as saying.

The bank did not give the exact amount of profit expected in 2018, but hopes to post profit of 8 bln hryvnias in 2020.

The lender reported losses of almost 24 billion hryvnias in 2017 and 176.6 million hryvnias in 2016.

PrivatBank’s nationalisation was the culmination of a swingeing clean-up of Ukraine’s financial system, backed by the International Monetary Fund. Dozens of lenders have closed since a pro-Western government took office in 2014.

Its former main shareholders reject the Ukrainian authorities’ assessment of the health of PrivatBank’s loan portfolio and accuse them of unfairly targeting the bank.

$1 = 26,2300 hryvnia Reporting by Natalia Zinets; Editing by Adrian Croft

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