Authorisation for mergers of credit institutions by acquisition and by formation

Published: 31/1/2015 Modified: 30/1/2016
Before entry in the register of companies of a decision on a merger by acquisition of a credit institution or other legal persons with a credit institution or a decision on the formation of a new credit institution as a result of a merger of credit institutions, an authorisation must be obtained from the Croatian National Bank. Described in the text below are the types of mergers by acquisition and by formation which are subject to licensing, the application and the documents to be enclosed with the application for authorisation for merger by acquisition and merger by formation and the time limits for taking a decision on the application.

Article 63 of the Credit Institutions Act prescribes the obligation of obtaining an authorisation from the Croatian National Bank for the following mergers by acquisition and formation:

  1. Authorisation for a credit institution to merge by acquisition another credit institution or other legal person.

A credit institution that merges by acquisition another credit institution having its head office within or outside the Republic of Croatia or other legal person having its head office within or outside the Republic of Croatia has to obtain authorisation for this merger from the Croatian National Bank prior to the entry of the decision on merger by acquisition in the register of companies. 

  1. Authorisation for a credit institution to be merged by acquisition to another credit institution.

A credit institution to be merged by acquisition to another credit institution having its head office within or outside the Republic of Croatia has to obtain authorisation for merger by acquisition from the Croatian National Bank. 

  1. Authorisation for merger by formation of a new credit institution

Credit institutions may merge by formation of a new credit institution with credit institutions having their head office within or outside the Republic of Croatia or with other legal persons having their head office within or outside the Republic of Croatia only provided they have obtained authorisation from the competent authorities of all participants in the merger (hereinafter referred to as 'authorisation for merger by formation of a new credit institution') and that the merger results in the formation of a new credit institution.

In the case of merger by acquisition of a credit institution or another legal person with the credit institution, at the moment of entry in the register of companies of a merger by acquisition, the merged institution ceases to exist, its authorisation expires and all its rights and obligations are transferred to the credit institution to which it was merged. The transfer of all assets and liabilities is considered to be a merger by acquisition and it requires authorisation from the Croatian National Bank in the same way as it is required for legal merger by acquisition.
In the case of a merger by formation of a new credit institution when the new credit institution is entered in the register of companies, all credit institutions participating in the merger cease to exist, their authorisations expire and their rights and obligations are transferred to a new credit institution. 

Application for authorisation for mergers of credit institutions by acquisition and by formation

The application for authorisation for mergers of credit institutions is to be submitted together with the application for authorisation of a new credit institution and application/applications for prior approval for the acquisition of a qualified holding in the capital of a new credit institution, prior approval to perform the function of the chairperson and a member of the management board and members of the supervisory board and application for authorisation to provide financial services. Decision on all the listed applications is taken at the same time. 

The application for authorisation for mergers of credit institutions by acquisition and by formation is to be submitted on the form Application for authorisation for mergers of credit institutions by acquisition and by formation, together with attachments described in detail in the column of the application form where the requested information is entered or in the instructions in which attachment the requested information may be found. 

The following documents and information have to be enclosed with the Application for authorisation for mergers of credit institutions by acquisition and by formation:

  1. draft Articles of Association of a credit institution to which another credit institution or other legal person is merged or the credit institution that is formed as a result of merger of credit institutions;
  2. a business strategy of the credit institution and a business plan for the first three years of business, including balance sheets, profit and loss accounts, the types of business planned, the appropriate organisational, technical and personnel structure of the credit institution, accounting policies and the organisation of the internal audit function;
  3. ownership structure of all the participants in the merger by acquisition or by formation,  including the list of persons connected to the shareholders or holders of holdings, prior to and after merger by acquisition or formation;
  4. an application for acquisition of a qualifying holding;
  5. a certificate from the register of companies for all the participants in the merger by acquisition or by formation that are not credit institutions having a head office in the Republic of Croatia;
  6. a certificate from the register of shareholders (book of shares) or book of holdings for all the participants in the merger by acquisition or by formation that are not credit institutions having a head office in the Republic of Croatia;
  7. audited financial statements for three business years (only for credit institutions and legal persons that are not credit institutions having a head office in the Republic of Croatia);
  8. application for prior approval to perform the function of the chairperson and a member/members of the management board (unless there are no changes in the composition of the management board of the credit institution to which another credit institution or legal person is merged;
  9. application for prior approval to perform the function of the members of the supervisory board (unless there are no changes in the composition of the supervisory board of the credit institution to which another credit institution or legal person is merged);
  10. an opinion or approval of the competent authority of a Member State or the competent authority on the credit institution from a Member State or a third country intending to participate in the merger by acquisition or by formation;
  11. an application for authorisation of a new credit institution that is formed as a result of merger; and
  12. other information listed in the Application for authorisation for mergers of credit institutions by acquisition and by formation. 

Deciding on the application 

When deciding on the application, the Croatian National Bank may request from the applicant to submit other documents and information which may be required for decision-taking. If the Croatian National Bank has requested additional documentation, the date of its delivery will be considered the date of receipt of a valid application.

The Croatian National Bank is obligated to issue a decision on the application for authorisation for mergers of credit institutions by acquisition and by formation within six months from the date of receipt of a valid application, i.e. within maximum 12 months from the date when the application was submitted.