Strength and the Franak Association Support the Establishment of an Ethical Bank

The Strength Party and the Franak Association support the establishment of an ethical bank, announced on Thursday Goran Aleksić from Strength and activist of Franak Jelena Benjak at a press conference held in the Parliament. Aleksić emphasized that he himself joined the Cooperative for Ethical Financing and paid the minimum deposit of 2,500 kuna.

‘Strength and the Franak Association support the need for the establishment of an ethical bank in Croatia because they have witnessed firsthand where the current banking model in Croatia leads through their previous work. As part of an organization that has uncovered illegal banking practices that have harmed Croatian citizens for 15 years, I believe that creating our own ethical bank is essential for Croatia to overcome economic problems and for its sustainable development,’ said Aleksić.

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All citizens, businesses, and institutions can become part of the project to establish the first ethical bank in Croatia by joining ZEF, and Aleksić decided to take this step because he believes it is primarily noble.

Benjak called on the Croatian National Bank to stop obstructing this project. The ethical bank will finance projects that are developmental, ecological, and for the benefit of our community; it is not based on commercial principles but primarily on the principles of financing projects that are beneficial for our entire community, she added.

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The manager of the Cooperative for Ethical Financing, Goran Jeras, stated that ‘the money of Croatian citizens is invested with high and non-transparent interest rates without any possibility for them to influence it, and the profit ends up outside Croatia, in parent banks in Italy, Austria, and Hungary, benefiting their economies and bank owners. We want to raise public awareness that control over one’s own deposits can only be achieved by establishing our own bank that will work for the sustainable development of Croatia, not to its detriment.

Currently, of the 300 billion kuna in deposits in banks in Croatia, 90 percent is in foreign ownership, which allocates less than a third of loans to entrepreneurship, while the rest generates new debts through consumer loans and loans to the state. This means that practically every citizen, from their 100 kuna held in the bank, is borrowing 70 kuna to their relative, neighbor, or fellow citizen, instead of employing them with that money and creating new social value. A bank that would operate according to the principles of ethical banking, directing all its capacities towards creating new value for the local economy, does not yet exist in Croatia, but we can see successful examples in several countries of the advanced part of the European Union. ZEF, emphasizes Jeras, uses a banking model that is, even when it comes to risk management, the safest in the world. In attempts to grow into a bank compliant with current regulations, they have encountered numerous institutional obstacles, so a broad national consensus is needed to show that citizens also believe that establishing such a bank for Croatia is not an alternative. ZEF meets regulatory requirements and is rapidly working on documenting materials to submit a license application.

>>>Jeras: The ethical bank will start operating in Croatia even without the official HNB license

They have had two unsuccessful contacts with the HNB, the first in May last year when they tried to obtain a license and the attempt to take over Tesla Bank, which ended with the bankruptcy request for that bank being submitted just a day before they received all the necessary approvals for recapitalization, after the bankruptcy had been postponed for a full two years.

In the end, Aleksić once again referred to the HNB, which, instead of recognizing the social benefit that ethical banking has in its roots and principles, obstructs the establishment of a Croatian ethical bank and thus proves once again that it is in the hands of the banking lobby of commercial banks. He also stated that he has so far tried to bring banks onto the right path, the path of lawful business, and from now on, as a co-owner of the future ethical bank, he becomes their competitor. The HNB, he claims, continues to support the illegal operations of banks and unfair interest rates, as does the government, which does not want to protect the rights of its citizens. He used the example of the crisis in Agrokor for which Jeras also offered a solution; although his proposal was in line with what the Prime Minister was thinking, it was rejected, confirming, he emphasizes, that Andrej Plenković is in the shadow of the Minister of Economy Martina Dalić.

>>>The first ethical bank will receive a license by the end of the year

Jeras, in response to journalists’ questions, also presented data on the portfolio and operations of the future ethical bank – in the first three years, their balance sheet will amount to two billion kuna, with 70 to 80 percent allocated to entrepreneurs, and the rest to private individuals. Regarding lending, loans can only be approved in amounts up to eight times the investment, while rejected financing projects can also turn to the Cooperative itself.

Finally, Jeras announced that they will again try to secure the license in the second half of May, after the ZEF assembly.