Rohatinski is expected to give the green light to BLB tomorrow

The professional services of the Croatian National Bank have processed the new request from Bayerische Landesbank (BLB) for the indirect acquisition of a majority stake in Hypo Alpe-Adria Bank Zagreb and Slavonska banka Osijek and have determined that all requirements set by the Croatian central bank for BLB have been met, thus proposing to the Council of the HNB to issue the requested consent to BLB, it has been learned from the HNB.

The meeting of the HNB Council is scheduled for September 12, and it is expected that the Council will make a decision regarding this consent at tomorrow’s meeting. The Governor of the HNB, Željko Rohatinski, denied BLB consent for the indirect acquisition of a majority ownership stake in Hypo Alpe-Adria Bank and Slavonska banka on July 11, due to BLB’s behavior in Croatia as the former majority owner of Rijeka banka. This decision by the governor, in accordance with his powers, followed after the HNB Council failed to reach a decision on this consent with the required two-thirds majority. In subsequent discussions with representatives of BLB, the governor set four conditions that BLB must meet if it wishes to reapply for HNB’s consent to acquire Hypo and Slavonska banka.

The conditions are a public apology to depositors for BLB’s behavior in the case of Rijeka banka, precise identification of risks in operations, determination of potential losses, and implementation of an initial recapitalization of Hypo bank for at least the amount of identified potential losses. Another condition is a change in the business policy of banks owned by the Hypo group, which includes limiting the approval of large mortgage loans to the private sector and adhering to HNB guidelines for preventing money laundering. Among the conditions was also the engagement of an external auditor acceptable to the HNB to conduct detailed due diligence. Bayerische Landesbank submitted a new request to the HNB on August 29 for the indirect acquisition of a majority stake in Hypo Alpe-Adria Bank d.d. Zagreb, as well as the same stake in Slavonska banka d.d., and on August 31, it published an advertisement in several Croatian daily newspapers with a public apology for withdrawing from Rijeka banka. (H)