The Central Bank of Montenegro introduced bankruptcy at Atlas Bank today, and Mirko Radonjic was appointed as the bankruptcy trustee. Out of the work remains the current 198 employees, of which the bankruptcy trustee can temporarily keep up to 10 percent of this number during bankruptcy. Total deposits with this bank amount to 189 million euros, of which there are protected deposits in individual amounts up to 50,000 thousand and guaranteed by the Deposit Protection Fund for 89 million euros. The deadline for deciding on the payment of protected depositors is 15 days, and the fund now in the accounts has 108 million euros so it can pay off all protected depositors.
This was stated by representatives of the Central Bank and the Deposit Protection Fund at a press conference today.
Governor of the Central Bank, Radoje Zugic, said that the interim administration since its introduction on December 7th found that Atlas Bank's parameters were much worse than the bank represented, that the solvency was negative by minus seven percent, that the total assets were precluded and that the total bank's liabilities exceeded its capital by EUR 1.14 million, which are the reasons for direct bankruptcy. Mr Zugic said that they could not ascertain earlier that this bank had such bad parameters and that they hoped that the bank would be saved through recapitalization. He stated that there were more interested investors for recapitalization, that two of them submitted the bid but did not pass a credibility test.
Asked if he felt obliged to resign due to a violation of the banking system, as two banks went bankrupt, Zugic said there is no reason to resign, stating that deposits grow, the liquidity of all other banks is strengthened and the banking system has never been better.
The Governor said that he had several meetings with the owners and the management of IBM and Atlas Bank last year in order to improve the situation in these banks. He said that they came out stronger from this situation and that the banking system was more robust as it strengthens departments for bank control and preventing money laundering.
Zugic admitted that when the forced administration was introduced, he promised the healing of the bank and not bankruptcy, but then they did not have all the information on bank parameters and hidden situations and they expected recapitalization. Director of the Department for Bank Control Dejan Vujacic said that Atlas Bank has 88,526 depositors, out of which 70,000 depositors have claims less than ten euros, and ten thousand depositors have less than 100 euro claims. The state has 8.9 million deposits as well as a 7.1 million claim for paid guarantees to Atlas Bank. Vujacic said he expected that part of this, the state would charge through bankruptcy. According to him, 63 million deposits are frozen by the decision of the High Court for investigation, that the non-residents have another 37 million deposits, and all residents are 22 million, counting the state. As he said the frozen part of the funds is in the account at another bank and was not used.
Director of Deposit Protection Fund Predrag Markovic said they had a 15-day deadline to start paying off guaranteed deposits and that they have the money for all. He said that IBM depositors have so far been paid 15.6 million or 60 percent of guaranteed deposits, as well as they have already paid ten million of that amount through bankruptcy proceedings.
Vujačić said he expects that from the bankruptcy of Atlas bank the Fund will charge up to 90 percent of 89 million which needs to be paid to protected depositors and that there will be no need to raise premiums by commercial banks to compensate for the money lost by the Deposit Protection Fund.
Asked why the two remaining models to try to recover Atlas Bank were not used, such as the sale of shares of existing shareholders with the recapitalization and the transfer of assets and liabilities of the bank to another bank, Vujacic responded that new parameters showed that liquidity was minus 7 percent and that the assets are less than the obligations, pointing out these as the main reasons for bankruptcy. He argued that CBCG could not establish it earlier.
Temporary administrator at CBCG Tanja Teric said there had been an overestimation of assets, also due to the lost dispute with Kaspia and claims from the Mail bank from Austria. She argued that it was not true that temporary administration increased costs and deteriorated the parameters, as criticism could be heard by Atlas bank, but these were rather improved as much as the temporary administration could do.
She also pointed out that she calculated well that 22 million euros were needed for healing the bank through recapitalization, as despite the bad parameters with such recapitalization, the solvency ratio would be 10.8 percent or 10 percent above the legal limit.
Text by Goran Kapor, on April 5th 2019, read more at Vijesti
