The Ukrainian government has acquired 100% of the shares of PrivatBank to place the country’s largest deposit holder under temporary administration.

PrivatBank, Ukraine’s largest bank with 20% of the sector’s $53bn in assets, has had its shares transferred to the state. This follows reports on unpaid insider loans that left at least $3.39bn unaccounted for in its ledger.

National Bank of Ukraine governor Valeriya Gontareva stated that PrivatBank’s clients would be protected and their deposits were now ‘guaranteed by the state’.

The current management of PrivateBank will step down and former finance minister Oleksandr Shlapak will take over as the new president of the bank.

Current finance minister Oleksandr Danyliuk said the bank will be sold after it has stabilised.

The recent CEE Banking Sector Report from Raiffeisen Research stated: “There is a chronic lack of sustainable profits [in Ukrainian banks], while recapitalisation needs could stretch into 2017-18. It cannot be ruled out, that the sector will see its third consecutive loss in 2016.”