Nationalization of Sense Bank
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In July 2023, the Ukrainian bank Sense Bank was nationalized by the Ukrainian government, taking 100% ownership of the bank’s shares.[1] The nationalization followed legislative and regulatory actions by the government and the National Bank of Ukraine (NBU), allowing it despite the common law.[2]
Sense Bank, formerly known as Alfa-Bank Ukraine, was one of Ukraine’s largest privately owned banks and was designated as a systemically important bank by the National Bank of Ukraine. Prior to nationalization, the bank remained solvent and continued operating normally, providing retail and corporate banking services across the country.[3]
Events leading to nationalization
In 2023, the Ukrainian government adopted legislation that allowed the forced withdrawal of systemically important banks from the market.[2] These legal changes expanded the power of the state to nationalize banks partly owned by Russian individuals or entities, without the standard insolvency proceedings.[4]
Ukrainian authorities claimed that the ownership structure of the bank posed security and financial stability risks. However, prior to the nationalization, the bank was fully solvent and functional, while two of its ultimate beneficial owners were the American non-profit Mark Foundation for Cancer Research and the Italian banking group UniCredit, neither of which had any connections to Russia.[5]
Sale proposal
To address the government’s concerns, the bank’s holding company proposed selling a controlling stake to Karswell Limited, an international investor with no solvency risks and no exposure to Russian holdings.[5]
Despite the proposal, the Ukrainian government blocked the transaction and proceeded to nationalize the bank, despite the availability of an alternative solution that would have preserved its private ownership.[6]