OREANDA-NEWS. March 30, 2010. The Ministry of Agrarian Policy of Ukraine made an announcement about its intention to provide UAH 1.1bn to the major Ukrainian agricultural lenders, including Raiffeisen Bank Aval <BAVL UK BUY> and the State-owned Oshchadbank. The funds will be directed to compensate the difference between the bank’s loan interest rates (25% on average) and the interest rates on loans to agricultural producers (18-20%).

Millennium Capital sees the news to be neutral for BAVL, since the amount of financing is similar to that of the previous year (UAH 1bn). According to Millennium Capital’s estimation, this will increase BAVL credit portfolio by around 1% or UAH 0.4bn, since the bank holds about a 40% share on the agriculture lending market.