WILLEMSTAD - According to the government, in a letter to parliament, the solution for Giro Bank consists of a split into a partial takeover of the portfolio by APC Bank, which they called "good bank" and the portfolio that stays with the Giro Bank, the “bad bank”. This portion includes 41 percent of the account holders, APC (pension fund), Refineria Isla / PdVSA, and the other creditors.
The 'bad bank' then consists of a series of residual debts from Giro Bank: account holders 126.5 million deposits; General Pension Fund Curaçao (APC) 110 million; Refineria Isla 44 million; Central Bank CBCS 257 million (advances related to the emergency scheme); creditors 18 million; "Non-performing loans" 160 million. This is offset by $ 20 million in legal claims (this is a claim from Giro) and Giro Bank assets (buildings, furniture, software, etc.).
The Giro issue and the values that are relevant here appear to be "partly dynamic", the government writes. The quantities known are the nominal value of the funds of the account holders and deposits of 482 million guilders, including a deposit of pension fund APC of 100-110 million and a deposit of PdVSA subsidiary Refineria Isla of 43-44 million.
Furthermore, a loan portfolio of nominally 404 million, of which the value of the so-called "performing loans" is currently unknown, "due to the persistent postponement of settlement and the Covid-19 effects." In addition, an advance of no less than 267 million is also due to the CBCS supervisor.
The government states that it is out of the question and that the "Country Curaçao has in principle no obligations to the parties involved" (CBCS, APC, account holders, creditors). Nevertheless, according to the cabinet, the bankruptcy of the Giro Bank will have such major consequences for the financial sector and the confidence/image in the banking world that the Minister of Finance will "use all alternatives to find a solution." “In the event of bankruptcy, account holders are likely to lose their assets; if the agreements between APC, CBCS and Country Curaçao can be executed, the account holders will eventually have access to their balances through the APC Bank.”
The minister has taken a mediation action in an attempt to guarantee part of the assets of the account holders by selling part of the portfolio of Girobank ("good bank") to APC Bank. "Negotiations have been held between APC and CBCS and the minister to prevent the CBCS from filing for bankruptcy of Giro Bank, which will cause all stakeholders to lose their assets."
At the moment there is a draft agreement - Principles document - between the parties Country, CBCS and APC and a loan agreement between CBCS and Country Curaçao, whereby the account holders have access to their credit balances (between one and five years) on the one hand and the CBCS on the other hand and APC can dispose of their receivable or credits in the longer term through the APC Bank.
"Crucial is the option/wish of the minister to be able to finance this agreement partly through surcharges," according to the memorandum to parliament. This will be submitted to Parliament in the coming weeks for support and approval.
