QCOSTARICA — Following two failed attempts to capitalize the struggling financial institution, the Consejo Nacional de Supervisión del Sistema Financiero (Conassif) made the decision to declare Desyfin unviable. It will have to stop operating and close.
Last month, Desyfin sent a document to the intervening team in which it assured that there was a possibility of recapitalization, a new partner was going to inject US$30 million dollars into Desyfin to save it. This did not materialize.
“On September 11, representatives of this third party contacted the intervener and said that there was no intention to invest the indicated amount of money,” said the intervener of Desyfin, Marianne Kött Salas.
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The second way out for Desyfin was for the Shareholders’ Assembly to agree to recapitalize for an amount close to ¢22 billion colones. But this did not happen either.
Next for Deyfin is a resolution headed by Kott Salas.
What is the resolution process?
Recently, in the case of Coopeservidores, the cooperative that was also declared unviable, Desyfin will follow a similar process from now on.
The financial institution will be divided into two parts, known as the “good bank” and the “bad bank.”
The good bank (made up of healthy assets and liabilities) may be acquired by another solvent entity in order for it to continue its administration. In the Coopeservidores case, the Banco Popular bought the “good bank”.
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Meanwhile, what cannot be transferred to another entity is known as the “bad bank.” These assets and liabilities will be transferred to a trust for administration.
The sale of the good bank will allow 76% of Desyfin’s savers (about 3,000 clients) to recover all of their funds since they are equal to or less than ¢6 million colones.
The remaining 24% (956 customers) will experience a haircut to their savings. It is not yet known how much the reduction will be.
What caused the downfall?
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The intervention of Deyfin began on August 13, ordered by the Conassif, originating from “irregular and risky management” by the administration, according to a report by the General Superintendence of Financial Entities (Sugef).
The consequences of these acts are:
- The losses of the financial institution reached ¢21.9 billion colones. These losses have their origin in the adjustments that had to be made for bad loans, for expenses that were not registered as such, for losses from the sale of goods, overvaluation of assets and for provisions for payment of taxes
- Loss of the entire assets of the financial institution and a shortfall of ¢6.7 billion colones. This represents a fall of -158% and a patrimonial sufficiency of -10.7% as of August 2024. In July 2024, this sufficiency reached 10.3%
Laura Suárez, the president of Conassif, stated that the regulatory body filed a criminal complaint for this case in August. One of the elements denounced is the alleged falsification of information that the entity passed to the supervisory body, in such a way that it could conceal its financial shortfall. In addition, reference was made to apparent practices by Desyfin to hinder the supervisory work of the authorities.
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