CNB Council decides on the situation in Cibalae banka

Published: 28/6/2000

At its meeting held on Wednesday, June 28, 2000 the Council of the Croatian National Bank, chaired by Governor dr. Marko Škreb, reviewed the report submitted by the temporary administrator for Cibalae banka d.d. Vinkovci and financial statement of the Croatian National Bank for 1999. The CNB Council also approved the 1999 Annual Report of the Agency for Domestic Payments (Zavod za platni promet, ZAP), as well as the work plan and the budget of ZAP for 2000. In addition, the CNB Council made several decisions acting in accordance with its authority.

Cibalae banka d.d. Vinkovci is the first Croatian bank which will go into bankruptcy with citizens' savings deposits and a corresponding part of bank's assets transferred to another commercial bank, as stipulated in Article 86. of the Banking Law. The bank which will take over citizens' savings deposits and a part of Cibalae banke assets is Zagrebacka banka d.d. Zagreb. In addition, according to the agreement reached so far, Zagrebacka banka will take over the operation with citizens' current and giro-accounts kept with Cibalae banka. Also, before the opening of bankruptcy proceedings, an invitation is to be sent to legal persons - depositors of Cibalae banka, to transfer their deposits to Zagrebacka banka.

Since none of approximately ten commercial banks, including Zagrebacka banka, which the temporary administrator invited to take over the complete Cibalae banka, showed interest in such transaction, and the legal framework which would enable a possible rehabilitation of the bank no longer exists, the CNB Council selected the described bankruptcy model, estimating that it is the least painful solution for the savers and other depositors, as well as for the stability of the banking system.

The temporary administrator was given a mandate to sign the adequate contract with Zagrebacka banka as soon as possible, so that the savers of Cibalae banka, which has been blocked for three months now, could have their money at their disposal again within the period of approximately ten days, due to the fact that they will become savers of Zagrebacka banka. Simultaneously, Zagrebacka banka will take over several banking offices of Cibalae banka, so that a number of this bank's employees will continue working in those offices. Also, a part of Cibalae banka employees will be involved in bank's operation under bankruptcy proceedings, while the social position of those that will become unemployed is to be alleviated with adequate severance pays and other legally prescribed instruments.

At the Wednesday meeting, the Council of the Croatian National Bank agreed the nominations of Mr. Igor Kodzoman for member of the management board of Hypo Alpe Adria Bank d.d. Zagreb, Mr. Zdravko Babic for member of the management board of Medjimurska banka d.d. Cakovec and Mr. Ante Blazevic, for chairman of the management board of Zagrebacka banka - Pomorska banka Split. Further, the Council approved the nominations of Mr. Ivan Sasko for the chairman and Mr. Caslav Stisic for the member of the management board of Krizevacka stedionica d.d. Krizevci.

The Council of the Croatian National Bank also approved the amalgamation of Trgovacka banka d.d. Zagreb and Cakovecka banka d.d. Cakovec with Bjelovarska banka d.d. Bjelovar. A new bank arising from this transaction will have the guarantee capital of about 500 million kuna. Since the banks involved in the transaction already individually realized profits exceeding the average profit margins in terms of capital as well as in terms of assets, it can be expected that the transformation into a larger bank will create preconditions for even more successful and cost-efficient operation. Due to high stakes of Erste Bank and Steiermärkische Bank in Bjelovarska and Trgovacka banka, as well as considerable stakes of Bjelovarska banka in Cakovecka banka, the new bank is to operate under the business name Erste i Steiermärkische banka d.d. and will be headquartered in Zagreb.