KfW helps stabilise Ukrainian banking system

• EUR 200 million to bolster deposit guarantee fund
• Protecting deposits of small savers
• Enhancing investor confidence in greatly weakened local banking sector

KfW Development Bank has finalised the support for Ukraine promised last year by Federal Chancellor Dr Angela Merkel by signing off a promotional loan for EUR 200 million intended to stabilise the Ukrainian deposit guarantee fund. Ukrainian Finance Minister Natalie Jaresko and KfW signed the loan agreement today. This financial support will allow the fund to compensate small savers who invested their savings in Ukrainian banks that now have been declared insolvent.

The acute weakness of the Ukrainian banking system has resulted in numerous bank failures. This development was triggered by the major economic downturn, associated loan losses and the substantial decrease in deposits from banks seen since the political crisis began. The assets of both poorer and middle-class sections of the population that are jeopardised by the banking crisis will be secured by this financing from KfW.

"The loan for the Ukrainian deposit guarantee fund is intended to restore Ukrainian savers' trust in the local banking system and thus is contributing significantly towards stabilising the Ukrainian financial system," said Dr Norbert Kloppenburg, Member of the KfW Group Executive Board.

The German Federal Government is providing the guarantee for this loan. Germany's support for the stabilisation of the Ukrainian financial sector is being closely coordinated with the World Bank and its "Financial Sector Development Policy Loan" programme.

KfW is one of the leading and most experienced development and promotional banks in the world. Established in 1948 as a public law institution, KfW is today 80% owned by the German Federal Government and 20% by the federal states (“Länder”).

KfW Development Bank implements the Financial Cooperation (FC) with developing countries on behalf of the Federal Government. From 2002 to 2014, around EUR 270 million (EUR 193 million of budget funds, about EUR 76 million of KfW's own funds) were committed to Ukraine for projects in the areas of financial system development, power supply, urban drinking water supply and waste water disposal, as well as social infrastructure in municipalities and nature conservation.

Further information on KfW Development Bank is available at

www.kfw-entwicklungsbank.de