According to Bloomberg, the Ukrainian government plans to seize Sense Bank, formerly known as Alfa-Bank Ukraine, from its Russian owners, Mikhail Fridman and Pyotr Aven. The move is expected to take place in mid-July. Sense Bank is Ukraine’s 11th largest lender in terms of assets and is considered a systemically important institution.
Fridman and Aven own the bank through ABH Holdings, a Luxembourg-based holding company that controls the bank’s parent company, ABH Financial Limited, based in Cyprus. Both businessmen have been targeted by Western authorities for their alleged ties to the Russian government and have faced sanctions, including asset freezes and travel bans. However, they have challenged these restrictions in court.
The Ukrainian government first proposed the nationalization of Sense Bank in December 2022, following the bank’s rebranding. In June 2023, Ukrainian President Vladimir Zelensky signed a law granting the government the power to nationalize banks owned by individuals sanctioned in connection with Russia’s military operation in Ukraine.
Earlier this week, Kiev added several companies linked to Sense Bank to its sanctions list, including ABH Holdings, ABH Ukraine Limited, Alfa Insurance, and Alfa Capital Holdings Limited. This move reportedly cleared the way for the nationalization of Sense Bank. Forbes Ukraine reported that an unnamed Ukrainian official stated, “removed the last obstacle to the nationalization of Sense bank.”
In response to the nationalization plans, ABH Holdings issued a statement last month pledging to challenge the decision in international courts to protect its investment and mitigate losses. The company expressed its willingness to change the ownership structure of the bank and agreed to sell 75.6% of Sense Bank to a European investor. However, the sale was blocked by the Ukrainian central bank, according to Bloomberg.
Sense Bank was originally the Ukrainian branch of Alfa-Bank, Russia’s largest private lender. In February 2023, Alfa-Bank was targeted by EU sanctions. Reports earlier this year indicated that Fridman and Aven, who own 45% of Alfa-Bank, were finalizing a deal to divest from the lender in order to evade further sanctions.
The nationalization of Sense Bank is part of Ukraine’s broader strategy to reduce Russian influence in its financial sector and strengthen its own banking institutions. The country has been taking steps to gradually sever economic ties with Russia and align itself more closely with Western Europe.
In summary, Ukraine is set to seize Sense Bank, owned by Russian businessmen Mikhail Fridman and Pyotr Aven, in mid-July. The bank is considered a major player in the Ukrainian financial system. The nationalization is a result of the Ukrainian government’s efforts to reduce Russian influence in its economy and strengthen its own financial institutions. Fridman and Aven, who have faced sanctions for their alleged ties to the Russian government, have challenged these restrictions in court but have been unsuccessful. The move to nationalize Sense Bank comes after the Ukrainian government added several companies linked to the bank to its sanctions list. ABH Holdings, the holding company that controls the bank, has expressed its intent to dispute the nationalization in international courts. Ukraine’s central bank has blocked a proposed sale of the bank to a European investor. Overall, the seizure of Sense Bank is part of Ukraine’s broader strategy to align itself with Western Europe and reduce its economic dependence on Russia.