Bayerische Landesbank (BLB) has submitted a new request to the Croatian National Bank (HNB) for the indirect acquisition of a majority stake in Hypo Alpe-Adria Bank d.d. Zagreb, as well as a similar stake in Slavonska banka d.d., confirmed today by the Croatian central bank.
The HNB stated that BLB’s new request has been placed in the usual processing, and that after the processing by the expert services, it will be presented at a meeting of the HNB Council. The next scheduled meeting of the HNB Council is announced for September 12. The new request from BLB was submitted after the HNB Governor Ċ½eljko Rohatinski outlined the conditions that BLB, as he has emphasized multiple times, must fully and unconditionally fulfill in subsequent discussions with representatives of that bank.
Namely, Governor Rohatinski denied BLB’s consent for the acquisition of a majority ownership stake in Hypo Alpe-Adria Bank and Slavonska banka on July 11, due to BLB’s behavior towards Croatia as the former majority owner of Rijeka banka. In subsequent discussions with representatives of BLB, the governor set four conditions that must be met if they wish to reapply for HNB’s consent for the acquisition of Hypo and Slavonska banka. As Rohatinski later announced to the media, the conditions include a public apology to depositors for BLB’s behavior in the case of Rijeka banka, and the engagement of an external auditor agreed upon by the HNB, who will conduct a detailed due diligence. Another condition is that the bank identifies operational risks, dynamically assesses potential losses, and conducts an initial recapitalization of Hypo bank for at least the amount of identified potential losses. The final condition is a change in the banks’ business policy, which includes additional permanent recapitalization of the bank that will return the capital adequacy ratio to the level from mid-2005, as well as restrictions on granting large mortgage loans to the private sector, reducing the openness of the currency position, and promptly implementing HNB guidelines to prevent money laundering.
