You have 10 free articles left this month. Get your freeBasic subscription now and gain instant access to more.

Montenegro's c-bank sees no negative impact from ban on payments by two troubled lenders

Author Radomir Ralev
Montenegro's c-bank sees no negative impact from ban on payments by two troubled lenders Radoje Zugic Source:

PODGORICA (Montenegro), December 12 (SeeNews) - Montenegro's central bank governor Radoje Zugic said the moratorium it has imposed on payments by troubled Atlas Banka [MNG:ATBA] and Invest Banka [MNG:IBMN] has no negative effect on the country's banking system.

"There are no negative effects on other banks for now," Zugic said during a news conference on Tuesday, according to an audio file posted on the website of Montenegro's central bank. "Atlas Banka and Invest Banka have a combined market share of just over 6%."

The two reasons for the introduction of the moratorium were the activation of a 15.2 million euro ($17.2 million) guarantee and the blocking of 63 million euro of deposits in the two banks by the Montenegrin authorities, Zugic explained.

"The guarantee was not included in the accounts of the bank, which caused a loss with a negative impact on the capital and the solvency ratios," Zugic said without elaborating which of the two banks he is referring to.

In an open letter to Montenegro's president Milo Dzukanovic and prime minister Dusko Markovic on Tuesday, the owner of Atlas Banka, Dusko Knezevic, accused the country's justice system of causing the difficulties of the two banks.

"For six months now, a total of 70 million euro of our customers' money has been blocked. First, the Special State Prosecutor claimed that it was a tax evasion, now he suspects money laundering. In the meantime, it became clear that all transactions were made through Visa and Master Card, which are owned by US companies," Knezevic said.

He added that the slow actions of the Montenegrin authorities have led to the withdrawal of Atlas Banka's strategic partner in the operation of a private hospital in Meljine. 

There are 87,000 customers of Atlas Banka and Invest Banka with deposits of below 50,000 euro each and their money will be repaid after the expiry of the moratorium, Zugic said during the news conference.

"A total of 560 have deposits above 50,000 euro. We aim to protect them. These 560 depositors hold about 50% of the guaranteed deposits," Zugic said.

Under Montenegro's legislation, the country's deposit guarantee fund is obliged to repay deposits of up to 50,000 euro per depositor in a bank, regardless of the number and volume of deposits held by the depositor with that bank.

The central bank said on Monday it imposed a 45-day moratorium on all payments by Atlas Banka and Invest Banka to depositors and other creditors in order to undertake activities necessary for the continuation of the operation of the banks and the protection of their assets. The suspension does not apply to the payment of salaries and other personal income, health and life insurance compensations, as well as recurring costs for the functioning of the banks.

The central bank put Atlas Banka and Invest Banka under temporary administration on Friday due to their poor financial condition after audit results showed that the capital of the two lenders does not meet the minimum risk requirements.

In October, Atlas Banka said it completed a 1.369 million euro capital hike as part of its debt restructuring strategy. After the completion of the increase, the total capital of the bank amounts to 32.028 million euro, and the total number of shares is 64,056, Atlas Banka said. The loan portfolio of the bank amounted to 146.1 million euro, whereas its deposit portfolio totalled 218.4 million euro at the end of September, according to central bank data.

Invest Banka had a loan portfolio of 29.4 million euro and deposits of 37.9 million euro at the end of September. The capital of the bank amounted to 5.6 million euro.

($ = 0.882395 euro)