1. The order of calculation and payment of the risk-based regular contributions Anatolii Maliarenko Director of Bank Monitoring Directorate February 2014 Kiev

2. System of regular contributions: historical review  2001. Law of Ukraine “On Deposit Guarantee Fund” ( Adopted on September 20 th, 2011, # 2740-III ) Guaranteed Amount is 1 200 UAH (approx. 225$). Regular fee is calculated twice a year at a fixed rate: 0,25% of total deposits amount as of December 31 st of a year, preceding the current year 0,25% of total deposits amount as of June 30 th of the current year. 0,25%+0,25%=0,5%.  2012. Law of Ukraine “On Households Deposit Guarantee System” (Adopted on February 23 rd, 2012, # 4452-VI). Guaranteed Amount is 150 000 UAH (approx. 19 000$). Regular fee is calculated quarterly at an annual base rate: 0,5 % of calculation base in UAH; 0,8 % of calculation base in foreign currency.  2013. DGF Executive Directorate Decision “On calculation of risk-based regular contributions” (29.03.2013 # 21): with respect to 3 factors. Guaranteed Amount is 200 000 UAH (approx. 25 000$). Risk-based regular fee is calculated quarterly by weighing the basic annual contributions rate (0.5% of calculation base in UAH; 0.8% of calculation base in foreign currency.)

3. Order of risk-based regular contributions calculation and payment Regulatory Environment  In accordance with Article 22 of Law of Ukraine “On Households Deposit Guarantee System” the DGF is entitled to issue regulations introducing the calculation method for regular contributions to the DGF in the form of differentiated contributions;  The decision of the DGF Executive Directorate from 29.03.2013 # 21 "On the establishment of risk-based regular contributions to the Deposit Guarantee Fund“;  Regulations on the order of calculation and payment of contributions to the Deposit Guarantee Fund approved by the decision of the DGF Executive Directorate on 02.07.2012.

4. Order of risk-based regular contributions calculation and payment The main objectives of the introduction of risk-based contributions is grading (minimizing) the DGF risk and encouraging banks to refuse accepting the excess risk and greater fairness of contributions to the Fund

5. Order of risk-based regular contributions calculations and payment. risk-weighted regular annual rate in UAH К1К2 risk-weighted regular annual rate in foreign currency К3К1 К2 The calculation of the differentiated contributions is based on risk-based adjustment of the basic annual contribution rate. 0.5% of calculation base in UAH 0.5% of calculation base in FC

6. DGF participants’ Diversification coefficient DGF participants’ Diversification coefficient assesses against the following indicators : К1 - size of the average interest rate on households deposits involved; К2 - ratio of the arithmetic average balances of households deposits to the arithmetic average balance of liabilities (savings bank); К3 - Deposits in UAH/deposits in foreign currency ratio. Order of risk-based regular contributions calculations and payment

7. Diversification rate is set depending on the size of the excess of the weighted average interest rate of the bank during the reported quarter over the average interest rate on the banking system separately for deposits in national and foreign currencies. In case of overrun of the weighted average interest rate of the banking system by the weighted average interest rate of the bank the following diversification coefficients applied: up to 1 point inclusive - 1,0; from 1 point to 2 points inclusive - 1,1; from 2 points to 3 points inclusive - 1,2; from 3 points to 4 points inclusive - 1,3; More than 4 points - 1,4. The size of the average interest rate on households deposits involved (К1)

8. Deposits/liabilities ratio is calculated as percentage ratio of the arithmetic average of the daily balances of balance sheet accounts of the deposits to the arithmetic average of the daily balances of balance sheet accounts of the liabilities of the bank for the last 90 days. Depending on the ratio of households deposits to bank liabilities are the following diversification coefficients are applied: with a ratio of less than or equal to 35% - 1,0; from 35 % to 40 % inclusive - 1,1; from 40 % to 45 % inclusive - 1,2; from 45 % to 50 % inclusive - 1,3; More than 50 % - 1,4. Deposits/liabilities ratio (К2)

9. Diversification coefficient is applied to deposits in foreign currency only. Depending on the deposits in national/foreign currencies ratio the following diversification coefficients are applied : with a ratio of less than 100 % inclusive - 1,0; from 100 % to 150 % inclusive - 1,1; from 150 % to 200 % inclusive - 1,2; from 200 % to 250 % inclusive - 1,3; more than 250 % - 1,4. Arithmetic average balances of households deposits in foreign currency/arithmetic average of balances of households deposits in national currency of the reporting quarter ratio (in percent) (К3)

10. Regular contributions payment and control Bank Regular contributions regulations (file L) DGF Regular Contribution Payement Off-site control of accuracy and timeliness of payments and timely depositing of regular contributions Inspections (control of the correctness of the regular contributions calculation) Order of risk-based regular contributions calculations and payment Quarterly by the 10 th day of the month

11. Order of risk-based regular contributions calculations and payment Resume  The DGF specific indicators for the calculation of risk-based contributions are not subjective in nature;  The DGF proposed technique that stimulates both adequate risk management in banks, and ensures compliance with the principle of equitable contribution to the DGF by its participants, because to the banks carrying out risk-free types of operations the diversification coefficient 1.0 is applied, which is equal to the basic annual contribution.  Implementation of the risk-based regular contributions meets financial needs of the deposit insurance system (increase of the amount of quarterly payment to the DGF amounted to 22.0%).

12. Фонд гарантирования вкладов физических лиц бульвар Тараса Шевченко, 33-Б, 01032, г. Киев, Украина телефон: +38 044 333 35 77 Факс: +38 044 333 35 56 Website: www. fg.gov.ua E-mail: fgvfo@fg.gov.uafgvfo@fg.gov.ua