The first bank was fined because the auditor's report was late

The first bank was fined because it did not submit the auditor's report on its operations last year to the Central Bank within the legal deadline, "Vijesti" from the Central Bank (CBCG) reported.

All banks are obliged to submit auditor's reports to the Central Bank within 120 days after the end of the year, i.e. by the end of April, after which the CBCG publishes them on its website. The Central Bank of Serbia has published audit reports for all banks, except for Prva banka. The majority owner of that bank is Aco Djukanovic, brother of the president of the state Milo Đukanović, while the largest small shareholder and depositor of the bank is the state-owned Elektroprivreda.

"The financial report of Prva Banka with the opinion of the external auditor for 2021 was not published on the website of the Central Bank, because the said document has not yet been submitted to the CBCG. Namely, Prva banka failed to hire an external auditor in a timely manner to audit the financial statements for 2021 in accordance with the prescribed deadlines. Prva banka informed the Central Bank of all the circumstances due to which it could not hire an external auditor in a timely manner, requesting an extension of the deadline for submitting the said report, to which the Central Bank did not agree, but according to Prva banka, it took adequate and timely actions and activities in accordance with penal provisions of the Law on Credit Institutions", stated the CBCG when asked by "Vijesti" why the auditor's report was not published, whether the CBCG approved this delay and whether Prva banka was fined for violating the law.

According to the Law on Credit Institutions, the penalty for not submitting annual financial statements, with the report and opinion of the external auditor, to the Central Bank within 120 days from the end of the business year to which the report refers, amounts to 10 to 40 thousand euros.

The Law also states that the CBCG shall, without delay, publish on its website information on final penalties imposed on the credit institution and responsible persons in the credit institution, in misdemeanor proceedings for violation of the provisions of this law or regulations adopted on the basis of this law. However, the CBCG did not publish this fine on its website. The CBCG has the right to postpone the publication of the fine or publish it in a way that does not disclose information about the credit institution and responsible persons, if it considers that "the publication would cause disproportionate damage to the credit institution or responsible persons".

According to data from Prva banka's website, on March 29 of this year, its supervisory board proposed BDO Audit Company as auditor. The shareholders' assembly was supposed to elect him at the session scheduled for April 20, but it was not held and was postponed to May 5.

"Acting within the scope of their supervisory powers, representatives of the CBCG held a meeting with the audit company engaged by Prva banka to audit the financial statements for 2021, where they discussed issues related to the audit, as well as the expected deadlines for its completion. According to the information received from Prva banka, the process of auditing the financial statements for 2021, on an individual and consolidated basis, is in the final stage and its submission to the Central Bank is expected after its consideration and adoption at the Bank's Shareholders' Assembly, scheduled for 25.8.2022/XNUMX/XNUMX. year", they stated from the CBCG.

There is no information about this scheduled Shareholders' Meeting on the website of Prva banka.

The former auditor warned about the withdrawal of deposits

Are there any problems in the work of Prva banka, which is why the auditor's report is delayed, and if there are, whether the Central Bank has determined any additional measures for Prva banka, the CBCG answered:

"Based on all the available information, delivered by Prva banka, as well as indirect and direct controls, the results of the AQR exercise and the application of its results, all indicators of Prva banka's operations are within the parameters defined by law and Prva banka is in regular business mode", they stated from the CBCG.

The auditor for 2020 "Crowe MNE", while writing the report, in the first half of 2021, noted a large withdrawal of deposits and drew attention to that problem. During 2021, EPCG, after the change of management, withdrew a significant part of deposits, but they also need the consent of the CBCG to withdraw subordinated debt from Prva banka of six million.