FZD collected 55 million from the bankruptcy estate of Atlas and IBM Bank

The Deposit Protection Fund is claiming another 58m euros from the bankruptcy estate of the two banks. It is estimated that he will collect 10 million by the end of the year

FZD needs to pay another nine million to depositors of banks in bankruptcy: Markovic, Photo: Zoran Djuric

To date, the Deposit Protection Fund (FZD) has collected EUR 54.73 million from the bankruptcy estate of Atlas and IBM Bank, while it is still claiming around EUR 58 million. This was said for “Vijesti” by the director of FZD, Predrag Markovic.

“From the bankruptcy estate of IBM, 17.73 million or 79.23 percent of the total obligation was returned, while 37 million euros or 49.98 percent of the total obligation was returned from the bankruptcy estate of Atlas Bank,” said Markovic.

Two banks have been in bankruptcy since 2019.

The fund now has about 98.6m euros in its budget, and Markovic expects to increase that figure to 120m by the end of the year, which will come from the collection of regular premiums paid by banks and additional collection from the bankrupt Atlas and IBM banks, which is estimated that it will be about 10 million.

A 50m-euro loan from the European Bank for Reconstruction and Development is available to the fund. That money was approved in November last year, but it was not withdrawn, because it is a “stand-by” arrangement.

From this year, the fund calculates the premium according to the new methodology, which means that the bank allocates money for the premium depending on the risk, while until now all banks paid the same amount of the premium. The methodology was prepared in cooperation with the World Bank.

Of the premium 16 million euros

“Banks will have to set aside a total of 16 million euros this year on the basis of regular premiums. Of this amount, four million have been collected so far, while the rest of the money will be paid in three installments. Last year, banks paid EUR 16,933 million on the basis of the regular deposit protection premium, while this year it is lower by EUR 933,210. The premium in the previous year was paid at the rate of 0.50 percent on the basis of total bank deposits. By changing the base (instead of total, deposits are now guaranteed), the amount of premium changes significantly, so that some of the banks in which the share of guaranteed deposits in total deposits is below average pay less, and those with a higher share of guaranteed deposits pay more. All this is corrected by the degree of risk determined by the Fund on the basis of the methodology. This way of calculating the premium on the basis of guaranteed deposits is much fairer than the previous way when the basis was total deposits. All in all, the total premium is lower in relation to the premium that was paid in the previous year “, explained Markovic.

Legal obligation

According to the new law on deposit protection, the FZD will have to have at least 10 percent of the total guaranteed deposits of all banks by July 2024, which is 147 million euros according to the current calculation of that institution.

“The fund has determined that the target amount of 10 percent of guaranteed deposits will be reached by the end of 2024. According to the balance of guaranteed deposits, the target amount is 147 million euros. The current balance of FZD money is around 98.6 million euros. This year, we collected the first installment of the premium in the amount of four million, and by the end of this year, three more installments in the same amount, which means another 12 million. We expect to collect another 10 million from the bankruptcy estate of banks during the year, so that at the end of this year we would have about 120 million euros. The liability for unpaid guaranteed deposits for two bankrupt banks is around nine million euros, which means that the Fund will have more than 111 million euros at its disposal at the end of this year. Depending on the collection of money from the bankruptcy estate in this and the following years, and the growth or reduction of guaranteed deposits, the FZD will determine the annual target level in such a way that the total target level is reached by the end of 2024. All this on the condition that a new “protected case” does not occur in that period, Markovic explained.

According to him, the determination of the annual target amount is done on the basis of the methodology, by determining the target amount of 10 percent of the total guaranteed deposits that must be reached within a certain period and dividing it by the number of periods determined to reach the target level.

“Every year, the annual target level of premiums for the next year is determined, taking into account the movement of guaranteed deposits and thus possibly correcting the final target level. “The fund signed a stand-by loan agreement with the European Bank for Reconstruction and Development in November last year for 50 million, which additionally gives assurance to depositors that their deposits in banks are protected,” Markovic explained.

The amount of the guaranteed deposit that the Fund pays in case of bankruptcy of a bank is 50 thousand euros, and on the day of Montenegro’s accession to the EU, that amount will be 100 thousand euros.