Ukraine’s Bank Sales Stall as Profits Surge, Buyers Refuse to Pay Up
Ukraine’s plan to sell two state-owned banks by December is stuck because the banks have become too profitable, driving the government’s asking price far above what investors are willing to pay.
The central bank of Ukraine says there is a “good chance” it will sell the two banks by the end of the year, but the market is not cooperating [181556]. As profits at the banks have risen, so has the government’s asking price. Investors, however, see lower value and refuse to match it [181556].
This gap between what the seller wants and what buyers will pay has caused repeated delays. The deadline for the sales keeps slipping [181556]. The central bank remains optimistic, but the market’s price signals indicate that no deal is getting done [181556]. The standoff highlights a basic problem: if the seller demands top dollar and the buyer wants a bargain, the transaction fails [181556].
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