Centar Banka is filing for bankruptcy which it could have avoided had the owners and management been more willing to attempt a merger with other smaller banks, and had investors been more serious in attempts to recapitalise it, the Finance Ministry said on Tuesday.
The State Agency for Deposit Insurance and Bank Rehabilitation will pay out all insured deposits in Centar Banka, which total about HRK 500 million, the ministry said, adding that there should be no problems in paying insured deposits if other banks filed for bankruptcy too.
Public sector depositors have managed to withdraw a large share of their deposits, but a small share remains, the ministry said.
The Croatian National Bank (HNB) Council earlier today decided to file a motion with the Zagreb Commercial Court for bankruptcy in Centar Banka, after it was determined that Centar Banka was not recapitalised in line with a decision by the shareholders' assembly of August 16, whereby the bank failed to execute HNB decisions.
The ministry recalled an attempt by the Alternativa Economic Cooperation Fund to inject fresh capital in Centar Banka, but the previous government scrapped it at its last session.
The incumbent government, however, accepted the fund's engagement, although such funds should not participate in bailing out the financial sector, a ministry source said.
