Denial from the former Chairman of the Board of "Eurostandard Bank" about the accusations of Trifun Kostovski

Skopje, 13 August 2020 / Photo: Dragan Mitreski - Free Press.

Former Chairman of the Board of "Eurostandard Bank", Nikolce Petkoski denies the allegations of Trifun Kostovski that he is guilty of losing the bank's license.

Kostovski will sue the National Bank, she will sue him

"With indignation, I condemn and deny the allegations made at the press conference held on 14.08.2020 by Mr. Trifun Kostovski and Mr. Kosta Kostovski, where I was unfoundedly accused as a person responsible for losing the bank's license. On this occasion, I want to inform the public about the true picture and situation.

As of October 01.10.2019, 29.11.2019, I have no contact with the bank regarding its operations. Although until November 01.10.2019, 14.03.2020 I was formally President of the Board of Directors of the bank, I was prevented from having any insight into the operation of the bank, as I mentioned, starting from October XNUMX, XNUMX. Moreover, since March XNUMX, XNUMX, I am not even employed in the bank.

I have been in the bank since December 2009, and from February 2010 until my departure I held the position of Chairman of the Board of Directors of the bank for ten years. The Board of Directors of the bank consists of two members and takes care of the operational operations of the bank. Above the Board of Directors is the Supervisory Board which appoints and dismisses the members of the Board of Directors and which has a control role. The Board of Directors submitted a monthly report to the Supervisory Board on the operation of the bank. Loans are approved by the Credit Board, and certain loans, above a certain percentage of the bank's capital, are subject to approval by the Supervisory Board. The Chairman of the Credit Board was Kosta Kostovski, with the position of Assistant to the Board of Directors. The President of the Supervisory Board was Trifun Kostovski. I found this situation in the bank with my arrival and it was unchanged until my departure.

In addition, there are other services in the bank such as the Risk Management Center and the Internal Audit Center that control the loan portfolio and they reported directly to the Supervisory Board on a monthly basis.

So, in terms of credit placements, they were always informed about the real situation in the bank through the reports that were presented to the Supervisory Board, including Mr. Trifun Kostovski, while Mr. Kosta Kostovski was up to date with the developments in his daily work! !! Regarding the accusations of mismanagement, damages, etc. caused by the previous management, they forget that they were part of the management of key functions of the bank, were fully involved in the day-to-day operations of the bank and were fully aware of the situation and developments in the bank. a more important decision in the operation of the bank was not made without the knowledge of any of them. That is why the accusations of giving loans to newly registered companies, spilling funds without a trace, paying fictitious invoices, etc., are ridiculous to say the least. There is a Central Register, a credit register, files in the bank. So you can easily check which company when it was formed, by whom, how long it operates, when and how much credit it owed.

When I came to the bank by the above mentioned gentlemen I was given the primary task to ensure the growth of the bank balance sheet, and their obligation as shareholders was to provide additional capital of at least 3 million EUR in the next 3-4 months from outside as new assets . For the success of my work, I will present the data on the bank balance sheet when I came to the bank (end of 2009) and when I left it to the management of the new management (30.09.2019).

  • The balance sheet of the bank: 2009 - 27,8 million EUR, and in 2019 - 161 million EUR
  • The loan portfolio 2099 - 12,5 million EUR, and in 2019 - 97 million EUR
  • Cash and cash equivalents: 2009 - EUR 9,2 million, and in 2019 - EUR 41,4 million
  • Shares in Postenska Banka: 2009 - problematic investment in shares of Postenska Banka AD Skopje of EUR 4 million for which there was a Decision from the NBRM to be sold, and in 2019 - Eurostandard Bank AD Skopje became the owner of 100% of the shares of Postenska Banka AD Skopje and annexed Postenska Banka AD Skopje in 2014, and in December 2016 a new agreement was signed with Makedonska Posta AD Skopje with much greater positive effects on the bank balance sheet.
  • Customer deposits: 2009 - 16 million EUR, and in 2019 - 145,3 million EUR, and a quarter earlier (30.06.2019) were 170 million EUR
  • The Fi-com case: 2009 - problematic placements in Fi-com with unrecognized mortgages, and in 2019 - the claim from Fi-com collected
  • Market share of the bank: 2009 - the bank was in the group of small banks with a market share of 0.63%, and in 2019 - in the group of medium-sized banks with a market share of 1,87% (at the beginning of 2019 the market share of the bank was up to 2,3%)
  • In 2009 - out of the paid EUR 18 million share capital for the needs of calculation of the coefficients provided by the supervisory standards, only EUR 7 million could be used (on a portfolio of EUR 12,5 million)
  • By 2019 - the bank acquired the property - the business building in which the Bank's Headquarters were located. The group owned by the Kostovski family acquired (part directly part indirectly through the bank) two business buildings with over 8,000 m2 in the center of Skopje
  • By 2019 - the bank became the largest shareholder in the Macedonian Stock Exchange AD Skopje and Central Securities Depository AD Skopje

The absolute and relative increases in the balance sheet and items can be easily calculated by anyone. Meanwhile, what was provided as additional capital by the shareholders were only EUR 1,5 million of existing deposits in the bank of their companies which were later converted into capital. The remaining recapitalizations were largely provided by me and placed through the companies of the shareholders, although this is not part of the responsibilities of the Chairman of the Board.

The bank's growth was not accompanied by adequate capital growth to be provided by shareholders. The first requests by the National Bank for the need for additional capital are with the Decision of 11.03.2013. At that time, only over 7 million EUR could be used again to calculate the coefficients provided by the supervisory standards, this time on a loan portfolio of over 50 million EUR versus the loan portfolio of 12,5 million EUR from 2009. Since then, in all meetings with representatives of the National Bank, the need for additional capital has always been emphasized.

Given that the bank's shareholders did not provide additional funds for recapitalization, the National Bank imposed restrictions on the bank's operations in order to increase the bank's capital base to adequately cover credit risk. All these operating restrictions have had a negative effect on the bank's operations and the deterioration of the portfolio over the years.

Starting from March 2019, the almost complete communication with the National Bank was led by Mr. Trifun Kostovski. During that period, during the meetings with the Governor of the National Bank, things were promised for which there was no idea whether they could be fulfilled and then I was asked to realize and provide them, primarily additional funds for recapitalization of the bank, which I did it until the moment I had authority.

As Chairman of the Board of Directors of the bank, I fulfilled my part of the task and the bank grew by taking into account the risks of operating within the possibilities, unlike the shareholders who failed to provide adequate capital support. Both in the Decision for revoking the license of the bank and in all the statements of the National Bank it is clearly emphasized that the unfulfilled obligation for recapitalization by the shareholders is the main reason for this outcome. The shareholders were up to date with everything that was happening at the bank, and since they had never fulfilled their part of the obligation, the attempt to amnesty themselves and present themselves as "victims" was, to say the least, frivolous.

Given that shareholders strongly complain and care about customers and how they will exercise their rights, so that the public knows whether shareholders share the fate with the bank's customers, I encourage the media to investigate and ask the following questions:

  • Do shareholders as individuals and their companies have deposits in the bank at the time of revocation of the work permit (I do not mean subordinated and hybrid instruments)?
  • Do individuals and their companies have deposits in other banks?
  • In recent months, have there been withdrawals from them as individuals or from their companies and outflows to other banks?
  • In the last month or two, members of the bank's management have withdrawn deposits?

I do not have information about this and I do not know the answers, but they will help so that the bank's clients can assess the "care and seriousness" of the shareholders for compensating the clients.

Although I have not been in the bank for 11 months and I do not know the current situation, I am still sure that with the responsible conduct of the bankruptcy procedure there will be enough funds to pay the creditors, and maybe even the shareholders will be able to get some of their investments. but the real ones, not the alleged 60-70 million EUR mentioned at the press conference.

Kostovski, instead of looking for other culprits, should deal with themselves. If they had engaged as much as they needed for the bank and respected what the National Bank required of them as shareholders, the situation today would have been completely different. The current situation of the bank is only because the shareholders were not able as owners to follow the bank in its growth.

Hence, despite the press conference, it remains unclear who, according to the shareholders, is to blame for the failure of the bank? Me? The National Bank? A political party (for which I was also accused by the shareholders in previous situations)? Any business lobby? Kostovski did not have an answer to these questions, and convened a press conference in order to inform the public about these questions.

Instead of making accusations, shareholders should seriously reconsider their guilt for the bank's collapse. Not because the previous management made the wrong choice. On the contrary. As shareholders, they were obliged and had to know what it means to be a dominant shareholder and owner of a bank and how to follow the directions of the competent institutions, in this case the NBRM.

In view of all the above, I seek a PUBLIC APOLOGY for the untruths, misinformation and baseless accusations that attempt to discredit me both as a person and as a professional with more than 25 years of banking experience. "Otherwise, I will be forced to protect my personal reputation and seek protection of my rights before competent institutions," Petkoski said.

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