The collapse of bank "Alliance": Pavel Shcherban and Aleksandr Sosis are withdrawing billions into the agri-sector while Andrey Pyshny covers the capital hole

The collapse of bank "Alliance": Pavel Shcherban and Aleksandr Sosis are withdrawing billions into the agri-sector while Andrey Pyshny covers the capital hole

The NBU could have pulled Bank "Alliance" out of the market on numerous occasions well before the situation escalated to a critical point.

However, for a variety of reasons—ranging from financial interests to political pressure—the regulator chose ignorance over decisive action. The consequences of this inaction could be catastrophic for both the bank’s clients and the reputation of the NBU itself. If the situation does not change, the collapse of Bank "Alliance" will be only a matter of time. This will inevitably reflect on the reputation of the National Bank of Ukraine, and the responsibility for this will lie with the regulator’s leadership, who may also find themselves under threat of dismissal.

Shadow Operations and Selective Support

One reason for the NBU’s anomalously loyal attitude toward "Alliance," despite numerous violations for which any other bank would have long since been expelled from the market, may be its role as an infrastructural unit for shadow operations in the "black" and "gray" markets. When the NBU issued refinancing to "Alliance" in 2022, the amount—nearly 3 billion UAH—was disproportionate to the scale of its assets. For comparison, even larger banks with significantly more assets received much smaller support packages from the regulator. It is evident that keeping Bank "Alliance" afloat was in the direct and immediate interest of the regulator.

Influential Clients and High-Level Interests

Another assumption is that the small and relatively inconspicuous Bank "Alliance" serves influential clients whose interests are protected at the highest levels. This includes interests related to servicing the aforementioned shadow sector. This is supported by "Alliance’s" experience in collaborating with the gambling business, as well as machinations involving Internal State Loan Bonds (OVGZ) that implicated a People’s Deputy and his assistant.

Reputation Risks for Leadership

A third reason may be that the bankruptcy of Bank "Alliance" could damage the reputation of the NBU itself as a "blind" regulator that failed to notice numerous violations for years. In the current situation, finding an adequate "trigger" that could pull the bank down would not be difficult. However, the reputation of Andrey Pyshny personally—upon which the financial stability of "Alliance" currently rests—would go down with it. 

The IFC Factor and Allegations of Corruption

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Another reason recently reported in the media is the fear of losing face before the International Finance Corporation (IFC) of the World Bank. The IFC provided "Alliance" with $11 million for enterprise development; however, the current whereabouts of these funds are unknown. It is likely that Andrey Pyshny is personally clinging to what remains of his reputation here, as he would have much to explain to Western partners if the truth emerged. It is difficult to imagine that the embezzlement of such a sum occurred without a "share" for Pyshny himself.

A Pattern of Violations

As a reminder, media outlets previously reported that Bank "Alliance" has been repeatedly fined by the National Bank for:

• Abuses in the securities markets.
• Violations of financial monitoring rules.
• Active participation in illegal gambling and shadow payment systems.

Furthermore, it recently became known that Bank "Alliance" failed for the third time to sell or place shares of an additional issue. Additionally, reports indicate that the NBU has refused to approve an acting Chairman of the Board to replace Yuliya Frolova, who has been placed on the international wanted list.

Shareholder Exit and Personal Connections

Media reports also suggest that the main shareholder, Pavel Shcherban, is actively withdrawing his money from the bank. He has invested several billion in the IT and agricultural sectors, while Bank "Alliance"—instead of serving as a credit leverage for this business—is languishing. Rumors suggest that Shcherban is another godfather (kum) to Pyshny himself. This allegedly explains why the NBU "fails to notice" such a "dirty" bank. Finally, Bank "Alliance" has repeatedly defaulted on its obligations regarding other bank guarantees.