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Panama banking watchdog seizes bank with shady links

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Posted 09/09/2019

Panama’s Bank Superintendent (SBP) ordered the  takeover of AllBank, Corp as of 3 pm on Monday, September 9, four days after  Banco del Orinoco,  another bank belonging to the main shareholder of AllBank, was intervened in Curaçao, and closed its  doors after reports of non-compliance with the Capital Legitimation and Terrorist  Financing System.

The president of the Board of Directors of AllBank in Panama is the Venezuelan banker Víctor Vargas Irausquín, who leads the holding Grupo Financiero Banco Occidental de Discount (BOD), owner of Banco del Orinoco.

Curaçao has been listed as one of the countries with the highest money laundering alert, according to the 2019 International Narcotics Control Strategy Report of the US State Department

"One of the banks owned by the main shareholder of AllBank, Corp, in the jurisdiction of Curaçao, (Banco del Orinoco, NV) where a quarter of the bank's liquid assets is placed and also provides custody services for a third party part of the investments in securities that are part of the productive assets of Allbank, Corp., was intervened on September 5 by the Centrale Bank van Curacao in Sint Maarten (CBCS), which results in the Bank Orinoco NV not being able to continue lending its regular services, it will not be able to offer new services, nor to attract clients and it will not be able to fulfill its debts, the reason why at the moment all its assets will be frozen ", said a Superintendency statement.

It also notes "a big  weakness in the health of the loan portfolio", "fragile management of the Corporate Governance", a business model that becomes unfeasible "and" the uncertainty generated by access to Allbank's assets, as well as potential contagion effects that derive from the situation of the banking group in Curacao " would jeopardize the interests of depositors.

The SBPsays  that the takeover does not represent a risk of contagion for the Panamanian Banking System since there is no connection between AllBank and other banks in the country
 

https://www.newsroompanama.com/business/panama-banking-watchdog-seizes-bank-with-shady-links

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Great grandson of Spanish dictator Franco linked to suspended bank

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Posted 10/09/2019

A great-grandson of the Spanish dictator Francisco Franco, Luis Alfonso de Borbón Martínez Bordiú, is one of the directors of the AllBank Corp bank, suspended  Monday, September 3, in Panama to safeguard its  clients,

The bank is  chaired by Venezuelan banker Victor Vargas Irausquin., who is also the father of Martínez Bordiú's wife, Maria Margarita Vargas Santaella.

The AllBank Corp, a Panamanian financial branch with headquarters in Curacao, is one of the many companies that make up the BOD group, owned by the father-in-law of the Spanish aristocrat, Duke of Anjou reports the EFE news agency.

The Superintendency of Banks of Panama (SBP) intervened on Monday the operations of AllBank Corp in order to protect and safeguard the interests of the depositors of the bank, according to the Panamanian regulator.

The Panamanian financial authorities explained that the shareholder group "did not attend in due time and opportunity" to the requirements of the corrective actions that the SBP instructed to "diversify the high degree of exposure of its liquid assets and custody services of its investments in values placed in related parts. "

In addition, it recalled that one of the banks owned by the main shareholder of AllBank in the jurisdiction of Curaçao (Banco del Orinoco, NV), where a quarter of its liquid assets is placed and provides custody services for a third of the investments in values its productive assets, was intervened on September 5 by the Centrale Bank van Curacao in Sint Maarten (CBCS).

According to its own corporate information, the BOD Financial Group is made up of: BOD Banco Universal (Venezuela), Allbank Corp (Panama), BOI Bank Corporation (Antigua and Barbados), Banco del Orinoco NV (Curacao) and Bancamérica (Dominican Republic).

In the capital market, by BOD Valores Casa de Bolsa (Venezuela), Corp Casa de Bolsa (Venezuela), Plus Capital Market (Panama), Plus Capital Market (Dominican Republic), BOD Mutual Funds (Venezuela) and Element Capital (Venezuela- Panama).

The BOD group responded on Monday to the decision of the Panamanian financial authorities with a statement saying  that "on September 3 of the current year the BOD Financial Group decided to liquidate the Banco del Orinoco NV, as part of a strategic decision before the impossibility of operating on a regular basis in the jurisdiction of Curacao ".

"Subsequently, the Central Bank of Curaçao requested an emergency measure in order to control the liquidation process, contrary to the legitimate decision of the shareholders of said Bank."

"Mainly considering the actions of the Central Bank of Curaçao, the Superintendency of Banks of Panama in the exercise of its powers, has decided to participate actively in the review of the assets that AllBank Corp maintains in the Bank of Orinoco NV, through a process of administration for a period of 30 days, which implies the temporary cessation of the bank's operations ", according to the financial group

BOD considers the measure of the Panamanian authorities "disproportionate" and assures its clients that "the strength of AllBank Corp is guaranteed"

 

https://www.newsroompanama.com/business/great-grandson-of-spanish-dictator-franco-linked-to-suspended-bank

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AllBank Intervention in Panama

On September 9, local authorities took operational and administrative control of AllBank, Corp, arguing that the group of "shareholders did not respond in a timely manner to the requirements of the corrective actions" that were instructed.

Tuesday, September 10, 2019

The results of the latest supervisions carried out by the Superintendence of Banks of Panama reflect a strong weakness in the health of the loan portfolio, which added to a fragile management of Corporate Governance, the institution reported.

You may be interested in "Bank Credit: Positive Outlook for Panama

From the Superintendency of Banks of Panama statement:

September 9, 2019. Through Resolution SBP 0169-2019 the Superintendency ordered the operational and administrative takeover of AllBank, Corp, effective as of 3:00 p.m. on September 9, 2019, based on the provisions of Article 131 of the Banking Law.

This decision was taken as a result of a series of factors that put at risk the security of the claims entrusted by the Bank's clients. The shareholder group did not attend in time and opportunity to the requirements of the corrective actions that this Superintendency instructed in order to diversify the high degree of exposure of its liquid assets and custody services of its investments in securities placed in related parties.

Read full statement (In Spanish).

 

https://www.centralamericadata.com/en/article/main/AllBank_Intervention_in_Panama

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Legal battle looms as Allbank liquidated

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Posted 08/11/2019

The Panama Banks  Superintendency of dered on Friday, the forced liquidation of the Venezuelan capital bank AllBank. 

The regulator took administrative and operational control of the bank on September 9. An evaluation of the interim administrator and the Superintendency itself  said: "it is demonstrated that, due to the financial, operational and corporate governance situation of Allbank, Corp., it is not appropriate to reorganize it or attempt its sale to another bank." 

The intervention of the bank in Panama came after Banco del Orinoco, NV, a bank controlled by the same group in Curaçao was intervened by the regulator of the Caribbean island reports La Prensa.

A quarter of AllBank's liquid assets are placed in that entity and it also provides custody services for a third of the investments in securities that are part of Allbank's productive assets, the regulator explained in a note dated September 9. "This results in the fact that Banco Orinoco NV cannot continue providing its regular services, it will not be able to offer new services, nor attract clients and it will not be able to comply with its debts so that at the moment all its assets will be frozen."

AllBank's intervention in Panama caused concern among its clients and depositors. A group of businessmen from the Colon Free Zone sent a letter to the Superintendent of Panama, Ricardo Fernández, warning of the operational risk that irs companies were running due to the intervention of AllBank since it was the only bank that allowed relations with Cuba and had deposited in their working capital that entity.

In a statement, the bank warns that the decision of the Superintendency causes property damage to savers and shareholders, "who will activate all legal remedies to reverse this action."

The bank warns that the measures of the Panamanian regulator violate their right to defense and prevent depositors and savers from disposing of their assets. "It is noteworthy that the proceeding of the  superintendency of Banks of Panama contradicts all its previous acts, in which it expressed its agreement with the financial statement of Allbank Corp."

 

https://www.newsroompanama.com/business/legal-battle-looms-as-allbank-liquidated

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AllBank Intervention Concerns

In Panama, a group of businessmen from the Colon Free Zone have expressed concern about the bank's intervention, because although it was under investigation, it was allowed to engage with several companies.

Friday, November 8, 2019

As of September 9, local authorities took over the operational and administrative control of AllBank, Corp, arguing that the group of "shareholders did not respond in a timely manner to the requirements of the corrective actions" that were instructed. In October the Superintendence informed that the institution will continue to be taken, in this case until November 8.

A letter sent by a group of investors from the Colon Free Zone (ZLC) to the Superintendence of Banks of Panama indicates that AllBank is the only entity in the country allowing transactions with Cuba and that in order to establish a contract it requested large sums of money.

Prensa.com reviews that "... It is known by us that this bank was being investigated for different irregularities more than a year ago, however, allowed it to commit on a large scale the capital of countless companies," the entrepreneurs complain."

Faced with this situation, the group of businessmen is asking the regulator for an immediate extraordinary solution to the liberation of the companies' working capital.

The article adds that "... On the other hand, the Chamber of Commerce, Industries and Agriculture ask for 'support before the Superintendence of Banks of Panama to give extraordinary attention to users of AllBank who maintain commercial accounts of operation to not be even more affected by what the economic downturn has caused'. The businessmen say they feel 'helpless and uncertain' and warn that 'the operation of numerous companies that generate employment and taxes to our country is in danger."

 

https://www.centralamericadata.com/en/article/main/AllBank_Intervention_Concerns

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Panama: Forceful Liquidation of AllBank Ordered

Because of the financial, operational and corporate governance situation of the banking entity, the Superintendence of Banks ordered the entire closure.

Monday, November 11, 2019

This measure was taken after the evaluation deployed in the Interim Administrator's Report, as well as the assessment of this Superintendence of Banks, details an official report.

You may be interested in "Panama: AllBank to Keep Intervening"

From the Superintendence of Banks of Panama statement:

Panama, November 8, 2019. The Superintendence of Banks of Panama, by means of Resolution SBP- 0205-2019 of November 8, 2019, ordered the Forced Liquidation of Allbank, Corp. at 3:00 p.m. on November 8, 2019, according to the terms set forth in Articles 154 and subsequent of Chapter XVIII, Title III of the Banking Law.

This measure was adopted after the evaluation deployed in the Interim Administrator's Report, as well as the assessment of this Superintendence of Banks, which shows that, because of the financial, operational and corporate governance situation of Allbank, Corp., it is not proper to reorganize it or attempt to sell it to another bank.

The uncertainty about the possibility of making liquid assets and portfolio of investments in securities issued and guarded in institutions of its banking group make the bank unviable as a going concern, given the weakness and fragility of its real liquidity and solvency. Faced with this situation, Allbank Corp. did not present an effective short-term solution or adequate financial proposals on the real availability of the Bank's funds and securities held in related entities. The repeated evasions, unfeasible terms and conditions demonstrated the risk of the Bank's operation and its unsustainability because of its exhausted business model.

 

https://www.centralamericadata.com/en/article/main/Panama_Forceful_Liquidation_of_AllBank_Ordered

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