IRB caretaker administration may end in December

Vladimír Hromý, the caretaker administrator of state bank Investična a Rozvojová Banka (IRB), said on September 22 he expected the bank's caretaker regime to be canceled as of December 1, 1999. He said there were no longer any reasons for the bank not to govern itself, and said he expected the Finance Ministry and the National Bank of Slovakia to agree.

Hromý said that talks with foreign investors could begin in January 2000, following which IRB would be sold.

According to Hromý, the bank's classified loans total 12 billion Slovak crowns ($285 million). IRB has eight billion crowns in provisions and reserves, he said, leaving about four billion in uncovered classified debt (1.7 billion of which is unrecoverable).

According to a recently-approved government scheme to restructure banks and corporates, IRB and state banks SLSP and VÚB will be left with about 20% of their current classified loans to deal with; the rest will be absorbed by the state.

Over the last several weeks, IRB transfered some 8.3 billion crowns in soft loans for socialist-era housing construction to Konsolidačná Banka, a state owned repository for bad debt. A four billion credit for nuclear power station Mochovce was not moved as planned, because Hromý argued that the loan could prove attractive to an investor.

Hromý said the state has sunk 5.7 billion crowns into the IRB so far, and would have to stump up another two billion within two months before the problem loans could be settled in time for the planned investor talks.

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