HNB on Bank Exposure to Agrokor: We Fulfill All Our Regulatory and Supervisory Duties

HNB was prompted by media inquiries regarding specific supervisory measures it has undertaken concerning the exposure of banks to the Agrokor group and today issued a statement.

– Over five years, from 2012 to 2016, HNB conducted 27 inspections during which 27 reports were issued identifying irregularities and mandated measures in 16 banks regarding their exposure to the Agrokor system across all items. For this purpose, 13 decisions were issued, ordering banks to implement numerous measures, and appropriate restrictions were also imposed. Additionally, in two banks, central bank commissioners were appointed with the task of overseeing the implementation of these measures – HNB states.

>>>HNB Continuously Monitors Bank Exposure to Clients

They emphasize that thanks to the mandated measures and continuous monitoring of their consistent implementation, the exposure of banks to this system has been reduced by several billion kuna compared to the initial state, and in some cases, further increases in exposure that would threaten the viability of the bank in the event of a crisis in the Agrokor system have been prevented. During this five-year period, 11 misdemeanor charges were raised, based on which 4 final and 2 non-final court rulings were made, imposing penalties on the banks. In other cases, there were minor irregularities that do not constitute an offense, which have since been corrected, or cases where misdemeanor charges are in preparation.

– It is also worth mentioning that one bank initiated an administrative dispute regarding the issued decision. The administrative dispute was resolved entirely in favor of HNB, thus confirming the correctness of the previous supervisory procedure. From the above, it is evident that HNB, in accordance with its powers, continuously monitors the operations of banks and takes prescribed measures to correct identified irregularities and illegalities, thereby responsibly fulfilling all its regulatory and supervisory duties despite resistance from interested parties. This has timely prevented the current situation in the Agrokor system from triggering systemic risk in the banking sector with all negative consequences for the economy, citizens, and the budget of the Republic of Croatia – concludes HNB.