Banka Slovenije and the Ministry of Finances Press Release – Factor banka and Probanka
The Government and the Bank of Slovenia implement measures under the Act Determining the Measures of the Republic of Slovenia to Strengthen Bank Stability
Ljubljana, 6. september 2013 – Today, the Government of the Republic of Slovenia and the Bank of Slovenia began to take measures under the Act Determining the Measures of the Republic of Slovenia to Strengthen Bank Stability.
Based on the proposal of an interdepartmental commission, the Government discussed the proposal of the Bank of Slovenia to take two measures. The first entails Slovenia issuing guarantees to ensure the liquidity and solvency of two banks, Factor banka d.d. and Probanka d.d. With the second measure, the Bank of Slovenia began the supervised winding down of both banks, as they are unable to survive in the market in the long term.
The business operations of both banks will remain undisturbed. It must also be stressed that all ordinary creditors (bank depositors and creditors, regardless of their status as natural or legal persons) will be repaid, while their deposits are secure regardless of their value and will be paid in full on maturity, as the banks will continue to operate until they conclude their business with ordinary creditors. Therefore, the banks’ clients (natural and legal persons) will be able to use their bank cards as usual, and perform payment transactions and other bank services.
Credit agreements with the banks remain valid. Borrowers must settle their liabilities on maturity, but will not be required to make early repayments of their debts. The costs arising from winding down will be borne primarily by the owners of both banks (shareholders), followed by holders of subordinate financial instruments, while the remainder will borne by the Republic of Slovenia.
In practice, supervised winding down means that the Republic of Slovenia has issued a guarantee to the Bank of Slovenia worth 490 million euros for Probanka and 540 million euros for Factor banka, which will enable uninterrupted liquidity and normal compliance with obligations to ordinary creditors by both banks.
The banks will normally not enter into new business agreements during the process of supervised winding down.
In accordance with the Banking Act, the Council of the Bank of Slovenia has appointed the following members of special administration:
for Probanka d.d.:
- Dr Imre Balogh, Chairman of the Board
- Mr Igo Gruden, Member of the Board
- Mr Marko Novak, Member of the Board
for Factor banka d.d.:
- Mr Klaus Schuster, Chairman of the Board
- Mr Matevž Slapničar, Member of the Board
- Mr Vitomir Krašovec, Member of the Board
On the day the members of special administration are appointed, the authority of the current members of the banks’ management boards to conduct business and represent the bank ceases. During special administration, the Bank of Slovenia will assume the powers of the supervisory board and general assembly.
Questions and Answers regarding the issue are available here.