Interpipe CFO names NBU currency restrictions as main challenge in financial market

These restrictions effectively cut Ukrainian companies off from access to foreign capital markets, according to Serhiy Kuzmenko

The currency restrictions imposed by the National Bank of Ukraine are the main current challenge facing the Ukrainian financial market. This opinion was expressed by Serhiy Kuzmenko, Director of Finance and Economics at the Ukrainian industrial company Interpipe, during the first Forbes Banker conference.

«Currency restrictions have become, perhaps, our main regulatory challenge since the start of the war, leaving us in a situation where our ability to service our financial obligations is significantly limited. On the one hand, it is very good that the National Bank has partially met us halfway and taken several steps toward liberalization, allowing, for example, the payment of dividends in the amount of the coupon on Eurobonds. But this is only a partial solution to the problem: there is the body of the debt, there are other debt instruments, and we need to move forward with the next steps. But for now, strategically, these restrictions effectively cut off Ukrainian companies from access to foreign capital markets,» he said.

At the same time, he said, in the fourth year of the war, Ukraine’s financial system is working very well.

«I never thought this would be possible. It is nice to remember the positive attitude and flexibility of our Ukrainian banks, especially state-owned ones, in the first months of the war,» added the CFO.

However, Serhiy Kuzmenko noted that as the situation on the financial market stabilizes, banks have become more regulated and very cautious, thereby losing additional opportunities to increase profits.

The top manager also noted that Interpipe is one of the few Ukrainian companies that has retained the trust of international investors and has placed Eurobonds.

«Several factors have contributed to this success. First, it is our employees and their dedication, determination, and resilience, especially in Nikopol. Second, it is a successful business model based on vertical integration – from scrap metal to green steel casting and the production of a diversified portfolio of finished products with high added value and a broad presence in key export markets around the world. Thirdly, our conservative financial policy with relatively low debt and additional liquidity on the balance sheet, which allows us to quickly invest in working capital growth,» the CFO emphasized.

As GMK Center reported earlier, the main obstacle to attracting foreign investment, apart from the full-scale war, is the NBU’s currency restrictions. Currently, the Ukrainian economy is facing a critical investment deficit, which is difficult to attract within the country, and the instruments for attracting capital — guarantees for investors, risk insurance, etc. — are not working perfectly.