IPB depositors to be refunded starting July 1, c-bank governor

Starting on July 1, money will be available at the headquarters of the failed Investprivatbank (IPB) and its subsidiaries for depositors to be able to take their savings back, stated Leonid Talmaci, the governor of the National Bank of Moldova, at a news conference Friday evening, Info-Prim Neo reports. Talmaci said the depositors would be able to either take all their money from the savings accounts, plus the interest, or redeposit it with the Banca de Economii (BEM), IPB’s prospective acquirer. BEM was the only bank which expressed its intention to take over ownership of IPB, the governor revealed. On Friday, the National Bank’s board examined the information presented by the liquidator of the bankrupt bank, Ion Ropot, and authorized him to sign a deal with BEM. The National Bank’s decision to repeal Investprivatbank’s license was published in the Official Gazette on June 23. The financial results for 2008 proved that the bank’s board and its executives had failed to observe many of the undertakings stipulated in the business-plan of the institution, said Talmaci. According to him, the excessive focus on construction loans, the use of funds contrary to the purposes stipulated in the credit agreements, the provision of new loans to some clients which had failed to repay prior loans, led to the worsening of the bank’s loan portfolio, up to the point where overdue loans constituted 52 percent of the total. A faulty decision was also considered the bank’s practice to attract deposits on short terms and invest them on long terms, which exposed greatly the bank to liquidity-related risks. At the same time, the board approved deals with the bank’s managers and personnel at much more favorable conditions than normally offered to other clients. The bank indicated in its reports substantial amounts of money placed with foreign banks, which proved untrue when the National Bank audited its accounts. “These and other violations of the law made it impossible to alleviate the financial situation at Investprivatbank, led to its insolvency and, consequently, to the revocation of its license”, explained Talmaci. Talmaci added that Investprivatbank’s assets are fairly modest, constituting 3.7 percent of Moldova’s total banking assets. Deposits are estimated at 909 million lei, including 611 million lei of personal savings. “The BEM has enough capital and sufficient liquidity to integrate Investpivatbank into its structure. However, the National Bank stands ready to help the BEM with credits if need be. The existing liabilities of the companies that took out loans from Investprivatbank remain in place”, declared the governor.