Friday, August 15, 2014

This Week in Bank Failures

With a caretaker government in place, an audit still pending, and the former owner a fugitive from justice, Bulgaria does not know what to do with the failed CorpBank. Deposits are expected to stay frozen for at least two more months. However, the bank reopened its offices this week to accept loan payments.

For sale: Espirito Santo Bank, the Miami-based U.S. subsidiary of Banco Espírito Santo, is making plans for a sale or possibly a stock offering as part of the liquidation and recapitalization of the failed parent bank in Portugal. Two Espirito Santo family members resigned from the U.S. bank’s board last week to remove any doubt about the bank’s independence. Espirito Santo Bank doesn’t have any known exposure to the problems of the bankrupt Espírito Santo commercial empire.

Failed: In South Africa, African Bank Investments Ltd. or Abil has lined up support from the central bank for its plan to split into a good bank and bad bank. The bank was put in administration and trading in the stock was suspended on Monday, though by then it was already trading for pennies. Details of a stock offering for the good bank will follow.

When IBEW Local 816 Federal Credit Union failed a month ago, the NCUA had not worked out all the details of succession. That can now be told. Yesterday C-Plant Federal Credit Union purchased most of the failed credit union’s assets and assumed the member accounts.