Bosnia's Bobar bank shut, big depositors face losses
24/12/2014 13:30
BANJA LUKA, Bosnia Dec 24 (Reuters) - Bosnian lender Bobar
Banka BBRB.BJ has been shut after its shareholders failed to
come up with a recovery plan, the regional banking agency said,
leaving its clients, including major state firms, at risk of
losing some of their 250 million Bosnian marka ($156 million) in
deposits.
Savo Sevaljevic, who was appointed as the bank's interim
administrator in late November, was quoted by local media on
Wednesday as saying the bank was over-borrowed, illiquid and
insolvent and liquidation was the fastest way to paying out to
depositors.
Sevaljevic was not available for comment.
Regulators said the liquidation of Bobar, which accounts for
4 percent of banking assets in Bosnia's autonomous Serb Republic
where it operated, will not affect the stability of the banking
sector in the region.
However, it may affect the region's public spending budget
because some of its largest clients include state-owned
companies such as the power utilities RITE Ugljevik and ERS
ERST.BJ and the state lottery, as well as the local
authorities in the towns of Brcko and Trebinje.
Bosnia's Deposit Insurance Agency said all deposits of up to
50,000 marka would be paid back over the coming months.
However, most corporate clients have deposits exceeding that
figure. The deposits of private clients amount to 80 million
marka.
Problems in the bank, based in the northeastern town of
Bijeljina, were reported after its majority owner Gavrilo Bobar,
a former Bosnian Serb businessman and member of parliament, died
in September.
Analysts say the bank paid the price for extending loans to
companies from its owner's business group, also named Bobar,
which were late with payments. Some of the debtors are also the
bank's shareholders and some now face closure.
"The causes for the liquidation of the Bobar bank lie in its
connection with 20 companies of the Bobar Group and its link
with the ruling elites in the Serb Republic," economic analyst
Damir Miljevic told Reuters.
(1$=1.601 Bosnian marka)
(Reporting by Gordana Katana; Writing by Daria Sito-Sucic;
Editing by Zoran Radosavljevic and Greg Mahlich)
((daria.sito-sucic@thomsonreuters.com; +38733 295 484; Reuters
Messaging: daria.sito-sucic.thomsonreuters.com@reuters.net))
Keywords: BOSNIA BANKS/