Resolution Banca Cis - Credito Industriale Sammarinese S.p.A. in A.S.

In the past few months, the Central Bank of the Republic of San Marino (CBSM) has been strongly committed to resolving the crisis of Banca CIS - Credito Industriale Sammarinese S.p.A. in A.S. (Banca Cis in A.S.), in full consistency with its legally established purposes of protecting depositors and promoting systemic stability.

CBSM's work was carried out with a two-tiered approach, initially in parallel, in accordance with the provisions of the law and supervisory regulations.

First, CBSM, followed with extreme attention the market initiatives aimed at the acquisition of the CIS Bank under extraordinary administration, only one of which was formalized by potential investors through a special application for authorization filed with the Central Bank, the evaluation of which required repeated interlocutions with the applicants to whom the Supervisory Authority provided timely feedback on the documentation received from time to time.
Having assessed the absence of market solutions consistent with current regulations, CBSM initiated - at the request of the Extraordinary Commissioner of CIS Bank - the resolution procedure provided for by Law 102/2019 - Bank Crisis Resolution Tools to protect the stability of the financial system. The implementation of the law was carried out with a system approach in which all stakeholders such as pension funds, social partners and banks were involved in joint technical tables in order to jointly or in parallel resolve the various issues.

The full awareness of all stakeholders about the importance of joint effort in defense of the system enabled important results, such as:

• the preliminary definition of an agreement with the Pension Funds for the segregation of their deposits outside the bank under resolution;

• the unanimous approval by the Finance Commission for the implementation of the resolution program presented by CBSM and the removal of the deficit;

• the establishment by law of the company for the segregation of pension fund deposits and the cultivation of liability actions;

• the establishment with the banking class of a program to enable the transfer of all protected deposits of up to 100,000 euros from Banca CIS to three banks, thus allowing, subject to the technical timing of the transfer, full availability of the funds described above by the relevant depositors.

The activities described above, which provide an effective response to the legitimate needs of depositors with amounts of up to euro 100,000 and the safeguarding of their investments, represent only two phases of the resolution program approved by BCSM (initiation of resolution with removal of the deficit and securing of deposits under Article 100 of the ISL). It will be up to the new bank to define its new business model on the basis of a business plan, drawn up by the Special Administrator, that will allow it to remain in the market and achieve its income balances.

CBSM will continue to work, together with the other stakeholders described above, to implement this third phase of the resolution path.

The new business model could envisage the evolution of the bank into an entity capable of implementing systemic interventions for the stabilization of the financial system, for example by positioning itself as a vehicle for the centralization and management of non-performing loans of the banking system, fully in line with the Financial Sector Strategy (FSS) outlined by BCSM and made public on its website.

22/07/2019