The bank watch of the National Bank of Slovakia (NBS) slapped the Slovak Insurance Company (Slovenská poisťovňa, SP) a.s. Bratislava with a fine of 500,000 Sk ($14,286) for having acquired a large amount of shares in two banks without the consent of the NBS.
The shares were transfered to the SP in the Centre for Securities by the state privatisation agency, the National Property Fund (Fond národného majetku, FNM) in so-called repo trades (buy-back agreements), through which the FNM obtained money from SP to improve its liquidity.
Approximately 16% of shares of the General Credit Bank (Všeobecná Úverová banka, VÚB) a.s. Bratislava thus ended up in SP's account, as well as more than 60% of the shares of Banka Slovakia a.s. Banská Bystrica from the portfolio of the FNM.
The director of the permission-granting department of the bank watch of NBS, Vladimír Hromý, told the weekly economic newspaper Trend that purchases of more than a 10% share of a bank must have the approval of the NBS regardless of other agreements with their original owners.
Moreover, the mandatory agreements between SP and the FNM do not clearly imply that voting rights stayed with the FNM.
SP must now return the shares it bought in VÚB and Bank Slovakia to the FNM.