Croatias central bank says small banks safe, no reasons for deposit withdrawal.

By bne IntelliNews December 5, 2011
Croatias banking system is stable and there is no reason for clients of certain banks to consider withdrawing their money and terminating their contracts, the central bank, HNB, said on its website. HNB added that Credo Banka, which licence was revoked last month, was an isolated case and cannot be compared with the situation in other banks, including small ones. The average capital adequacy ratio of the Croatian banks was 19.3% at the end of September versus a minimum required 12%. HNB said it has been closely monitoring banks compliance with the required capital adequacy ratio and intensifies its supervision over lenders as soon as it notices that any of them is approaching the limit. HNB added it is ready to help securing the necessary liquidity at any bank, which operates is accordance with the law. On November 24, HNB said it has put on watch four small lenders in order to maintain their capital adequacy above the minimum required. A day earlier, it withdrew the licence of Credo Banka, which was no longer able to meet the liquidity requirements. Local media quoted vice-governor Davor Holjevac as telling a TV programme the four lenders under supervision were Banka Kovanica, Nava Banka, Karlovacka Banka and Vaba. The central bank said the situation in the four banks was stable both in terms of capital adequacy and liquidity and cannot be compared with the state of Credo Banka. It added that maintaining capital adequacy above the minimum rate is especially important for smaller lenders who are not part of strong banking systems that could support them in case of difficulties. According to preliminary unaudited data of credit institutions, the capital adequacy rate of Banka Kovanica was 15.09% as of end-September 2011, of Vaba 12.23%, of Karlovacka Banka - 12.01% and of Nava Banka - 12.59%.

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