August 13 (SeeNews) - North Macedonia's central bank said it has revoked the founding and operating licence of Eurostandard Bank AD Skopje due to non-compliance with the minimum requirements for operating a bank.
The revoking of Eurostandard's licence will not jeopardise the banking system's stability as the bank held just 1.3% of the system's total assets, 1.7% of deposits and 1.6% of loans as of June 30, the central bank said in a statement on Wednesday.
Eurostandard has been under strict supervision in the past months due to risks in its operations, central bank governor Anita Angelovska-Bezoska, said during a news conference streamed on the central bank's YouTube channel on Wednesday.
Angelovska-Bezoska added that the crucial problems with the bank stem from past weaknesses, not current circumstances.
"Supervisory surveillance conducted in 2019 showed undercapitalization of Eurostandard Bank AD Skopje, urging the National Bank to take several measures with the crucial being recapitalization of Eurostandard Bank AD Skopje. The commitments for recapitalization in 2019 were partially met, yet the commitments for recapitalization in the first half of 2020 were not met," the central bank said.
As a result, Eurostandard's capital adequacy ratio fell to 2%, which made the bank insolvent under North Macedonia's banking law.
Accordingly, the central bank will submit to court a proposal for opening bankruptcy proceedings against Eurostandard Bank on Thursday, it said.
The Deposit Insurance Fund (DIF) will reimburse deposits in the amount of up to 30,000 euro per person of 99.4% of depositors in Eurostandard. The total amount of household deposits to be reimbursed is about 4.4 billion denars ($84 million/71 million euro).
A total of 15 commercial banks operated in North Macedonia as of end-March, including Eurostandard, according to central bank data.
Eurostandard is equally owned by E.H.H. Eastern Hemisphere Holding SA and G.O.F.I. Group of Finance and Investment SA, both based in Switzerland, according to data published on the website of the bank.
(1 euro = 61.89 denars)