Business loans under fire, Gulliver sale and funds for Kyiv ahead of winter

Yurii Katsion has been at the helm of Oschadbank for almost eight months. How is the bank financing borrowers whose businesses are being destroyed by Russian shelling? How actively is it increasing lending to the defence industry? On what terms does it plan to sell the Gulliver complex, which was seized for debt? And what did Katsion respond to the allegations regarding the ‘Forest Gump’ case? Katsion’s first major interview as CEO of Oschadbank

It is likely that, throughout his 25-year career at the state-owned Oschadbank, Yurii Katsion, 48, has never faced as many diverse challenges as he has in the eight months serving as CEO of Ukraine’s second-largest bank.

In late July, the NBU recommended that banks support businesses affected by Russian attacks on logistics and ports. What measures have you implemented in that regard?

This year the banks have signed a memorandum on financing the defence sector; in 2024, it was the energy sector. These are also anti-crisis measures designed to stimulate business and restore operational activities.

A vivid example is Nibulon in 2023. Traditionally, it would have been allowed to default, but due to the war and its impact on the economy, the NBU and the government opted for a different approach – whilst there is still a chance to resume operations, such companies should be given access to financial resources.

Mission: to sell Gulliver

Oschadbank and Ukreximbank want to sell Gulliver for $207 million. One market player told Forbes Ukraine that they were prepared to buy it for $137 million, but on condition of receiving a loan of around $100 million from both banks. Is this an option? If not, what are the alternatives?

At the moment, it is not feasible. The asset is being offered on the condition of full payment on the date the sale and purchase agreement is signed. Next, we’ll look at demand; there are several strategies. The first one is an auction at the same price, but with payment by instalments. Another strategy is to lower the price, but on the condition of full payment on the date the sale and purchase agreement is signed.

Our aim is to recover as much of the capital lost due to provisions on such loans as possible.

But have any such proposals been received?

There were companies that informed they might be willing to take part in the auction on financial leasing terms. If the calculation shows that lowering the price and selling today yields a greater benefit, we will opt for that. On the other hand, if maintaining the price whilst transferring the asset under a financial lease on market terms yields a greater benefit, we will opt for leasing. We will make the decision within a month of the first auction.  

We see interest and liquidity in the market, but investors are cautious due to war risks.

What is the current situation at the complex? Last winter, state-owned banks reported attempts to obstruct Gulliver’s operations, apparently by the former owner, Polischuk.

Polishchuk has never admitted that those incidents were somehow related to his actions. Some of the incidents were probably related to technical faults – it is difficult to prove otherwise without video recording. But such incidents did occur.

We have managed to fully stabilise the situation at the complex and restore all systems to working order. Almost all the tenants who were there when the complex was transferred to the bank’s balance sheet a year ago have returned.

Rental income has returned to the level it was at before the asset was transferred to the bank’s ownership, meaning the investment appeal of the complex has been restored. It can even be enhanced by attracting new tenants and filling vacant spaces. The vacancy rate is typical for assets of this class – approximately 12–20%.

The loan to Kyiv and the NABU case

Oschadbank has provided Kyiv with a loan of UAH 2.5 billion to strengthen energy resilience and prepare for the 2026/2027 heating season. On what terms, and do you see the potential for the loan to be repaid?

The loan agreement is valid until 31 December 2028. The city’s financial plan enables it to repay the loan; without this condition, the loan would not have been granted.

Is Naftogaz servicing the loan provided by Oschadbank?

Clients’ compliance with the terms of the loan agreement is subject to banking secrecy.

Aren’t there too many so-called ‘social’ loans? Won’t this affect the bank’s stability?

Oschadbank is a state-owned bank, so we do take into account the needs of the country, the population, businesses and communities when prioritising our activities. At the same time, we are a commercial entity with a high standard of corporate governance, and obligations regarding profitability and the payment of dividends. We do not grant ‘social’ loans.

Yaroslav Zheleznyak, Deputy Chairman of the Finance Committee of the Verkhovna Rada, claimed that Yurii Katsion might appear on NABU’s recordings in the ‘Mindichgate’ case under the alias ‘Acrobat’. The MP did not provide any evidence to support this claim, however, on 2 September the bank’s CEO was summoned to a meeting of the Temporary Investigative Commission of the Verkhovna Rada regarding the possible influence of senior officials on the management of state-owned banks, primarily Sense Bank.

This interview took place before the publication of Katsion’s summons to the TIC. Forbes Ukraine reports on the dialogue between him and MP Zheleznyak at the meeting.

Zheleznyak: The Yurii, who appears in the ‘Forrest Gump’ operation recordings published by NABU, in conversations with Vasyl Veselyi and in references between Zuckerman and Vasyl Veselyi – is that you?

Katsion: Mr Yaroslav, I have great respect for journalistic investigations, but I urge you to use only verified and identified data and to make assumptions solely on that basis. You have already twice mistakenly referred to me as to someone I am not – in particular, ‘Acrobat’. I am not ‘Acrobat’. You also mentioned Oschadbank amongst the banks that provided a guarantee for Mr Halushchenko. This is not true – please, check the facts.

Zheleznyak: Have you spoken to either Vasyl Veselyi or Mr Zuckerman regarding the appointment of, or influence on the appointment of, the Supervisory Board of Sense Bank?

Katsion: I do not know any individuals such as Zuckerman, Mindich or others mentioned in these journalistic reports.

Zheleznyak: Have you spoken to Vasyl Veselyi?

Katsion: I have known Vasyl Veselyi for several years – just as I know many clients in the corporate business sector. He was one of the owners of such a business. He approached me in 2024 regarding the reconstruction of an enterprise destroyed in 2022 during the Russian offensive on Brovary. He was interested in programmes for the reconstruction of such facilities, and, given that our bank is the leading provider of financing for this type of business, he approached us for advice. I provided the relevant information and support programme tools, after which he did not contact us again.

Zheleznyak: Could you tell us what sort of business it is?

Katsion: I believe it is a meat-processing complex and warehouse facilities. He introduced himself as the owner of this business and estimated the losses at over $5 million. We did not proceed to the stage of analysing documents, investigating beneficiaries or assessing the business model – it remained at the level of a potential, hypothetical exploration of the matter.

Zheleznyak: Did you have a conversation with Yurii and Vasyl Veselyi on 12 May?

Katsion: I don’t recall.

Oschadbank’s corporate lending

How many loans could Oschadbank grant to businesses by the end of the year?

Oschadbank’s corporate loan portfolio currently exceeds UAH 106 billion. Our forecast for this year is to increase the portfolio by 20%, which is UAH 20 billion. This target is entirely achievable, although a huge proportion of loans is repaid early, especially in the defence and industrial complex. Clients repay loans for previous periods on time, no one applies for unjustified deferrals.

In the corporate sector, we can see a shortfall against the lending target for the first half of the year. The reason is that we have signed agreements worth UAH 14 billion, but clients have not yet utilised almost half of this amount. This is due to the specific nature of the business – for example, agricultural and trading companies hold large limits but do not always utilise them.

We traditionally increase lending volumes in the second half of the year. Now we have projects worth UAH 35 billion in the pipeline. We could finance much more, but there isn’t that level of activity in the economy at the moment.

What is the volume of your lending to the defence industry?

We have recently signed a memorandum on the defence industry; this year, we have signed agreements totalling around UAH 3 billion. Last year, this figure was over UAH 8.8 billion, plus documentary transactions amounting to €562 million.

There are a number of instruments available for the defence sector: direct financing, partial guarantees, an interest rate compensation scheme, and portfolio guarantees. We are moving towards financing the defence industry on conventional terms, where companies have sound financial results and do not require additional state guarantees.

Oschadbank provides loans to many agricultural clients. Has the shelling of ports affected the financial position of these borrowers?

Some clients have officially announced that they are temporarily suspending their operations in Ukraine. Over the past two years, one client has come under devastating attacks by more than 45 drones and 6 missiles. Their grain silo complex has been almost completely destroyed. Consequently, for safety reasons, the company has decided to suspend production.

Large-scale destruction has a significant impact on companies’ financial position. But first, we assess the scale of the damage, draw up a recovery plan, identify sources of financing, and only then decide what to do next.

What is the problem with syndicated lending, and is there potential to revitalise it?

Oschadbank was one of the initiators of the revival of syndicated lending. We started with energy projects, and then companies from the defence industry joined in.

There is interest in it; by joining forces with the largest banks, it is possible to carry out projects that were previously impossible to undertake alone.

Foreign banks have also approached us with proposals to include them in these programmes. However, we need a clean case, without any risks the EBRD does not accept. It is also worth bearing in mind that the large clients we work with are often clients of these banks as well – so we cannot exceed the risk threshold per borrower.

Furthermore, banks with foreign capital are also willing to participate in syndicated lending. There are no industry-specific restrictions. We are already preparing several deals in the energy sector and expect to finalise them in the near future.

Retail business and digitalisation

In the retail lending segment, Oschadbank ranks third in the market. What is Oschadbank’s strategy in this segment, and what are its KPIs?

During wartime, Oschadbank faces significant restrictions on traditional lending approaches, especially mortgages. In practice, it is only one programme currently operating on the market – ‘eOselia’. It covers around 99% of the primary market, and its viability depends on government subsidies.

We have also deliberately maintained a conservative position on cash lending – it always involves higher risks. It requires automation, swift decision-making and management of non-performing loans. Commercial banks specialising in this area usually sell off their troubled portfolios quickly. Our business model is more conservative.

Oschadbank’s retail business is growing twice as fast as the corporate segment. The portfolio in this segment grew by approximately UAH 3.4 billion over six months (by 26%), whilst the corporate portfolio grew by UAH 5.3 billion (by 13%). We are actively developing and evaluating our approaches to cash and car loans.

We have been improving our mobile app for over a year and plan to complete the work by the end of 2027. It includes over 80 initiatives designed to transform the app into a full-fledged super-app: from purchasing government bonds to applying for a car loan or mortgage.

We are also reviewing the effectiveness of our branch network – there are currently 1,111 branches. This means we must be not only financially profitable but also socially responsible, particularly when it comes to ensuring access to financial services in remote and frontline regions. We have a network of mobile branches, of which there are already 15. They operate not only in frontline areas but also in Western Ukraine, in settlements where there are no banks at all.

Does the new app signal a focus on digitalisation?

There is an ongoing active discussion with the Supervisory Board regarding the implementation of the bank’s IT strategy and strategy transformation. The shareholder has instructed state-owned banks to develop and update the strategy for the wartime period the by the end of the year – with a horizon of six months after the end of the war.

We are advancing arguments to the Supervisory Board for the need for a separate board member responsible for digital transformation. We plan to appoint individuals responsible for digitalisation at the level of each business unit. I hope this will yield rapid results.

Another ‘super-tax’ for banks

Next year, the Verkhovna Rada is planning to raise the income tax for banks once again, to 50%. What does it mean for you in practice?

It is an effective practice for the next two years. Taxing one sector consistently at a higher rate than others encourages the concealment of income.

Now there is talk of an intention to reduce the state’s share in the banking sector. Ukrgasbank and Sense Bank are priorities for full sale. PrivatBank and Oschadbank are on the agenda for the future, after the end of the war, and probably only partially, so that the state does not lose control. If the state’s share is kept at 50%, many investors will not be interested in such a bank.

The share of the public sector in banks stands at approximately 50–60%. State-owned banks pay dividends as well as income tax. For a state-owned bank, it makes no difference whether it pays via taxes or dividends; the total amount works out to be roughly the same. The difference lies in the timing: taxes are paid quarterly, whilst dividends are paid once a year.

As long as profits are not paid out as dividends, they remain within the bank, increasing its capital and enabling it to extend lending. If such decisions are made systematically, the public sector fulfils its obligations by paying taxes rather than dividends. Conversely, this situation creates a natural incentive for the commercial banking sector to minimise its tax liability.

Has this logic been explained to the Members of Parliament? Do they take it into account?

The Economic and Financial Committees of the Verkhovna Rada understand all this perfectly well. Their argument is that people see the banks’ super-profits and demand that they be channelled to the army, and they cannot ignore this demand.

Sergii Naumov, the former CEO of Oschadbank, said back in 2024 that Oschadbank could not pay more than 30% in dividends, yet last year it paid 50%. Why is that?

At that time, the restriction was linked to the terms of the Eurobond issue, which the bank has already repaid. Moreover, the procedure for determining the amount of dividends to be paid to the state budget has recently been revised. The basic principle is that the budget forecast and business plan for the coming year, capital adequacy and regulatory requirements are all taken into account.

This year, Oschadbank has paid 30% of its profits as dividends – UAH 4.8 billion. Along with other taxes, the bank has already transferred over UAH 10 billion to the budget.