Banking Crisis 1998–1999: Bankrupt and Disappeared
Introduction
The Croatian banking crisis of 1998-1999 shook the country's financial system and revealed deep structural weaknesses. Several banks collapsed completely, never returning to business. Unlike Dubrovačka banka or Croatia banka, which were rescued, the following institutions went bankrupt and disappeared from the market.
Some banks showed irresponsible management… sometimes even criminal activity, granting a large part of their loans to connected persons, resulting in liquidity problems.
Glumina Banka
Glumina Banka was one of the first major casualties. By mid-1998, its potential losses were several times higher than its capital base. Payment obligations were repeatedly missed, and the Croatian National Bank (CNB) refused to support its rehabilitation. In March 1999, bankruptcy proceedings were officially launched, ending the bank's operations.
Komercijalna Banka (Zagreb)
Komercijalna Banka faced blocked accounts and heavy losses by early 1999. After CNB placed it under temporary administration, it became clear that the bank had no realistic chance of recovery. Bankruptcy proceedings were initiated soon after, leading to its disappearance from the financial landscape.
Gradska Banka (Osijek)
Located in Osijek, Gradska Banka was a regional institution that succumbed to the same crisis dynamics. Huge losses relative to its capital base and frozen accounts led to CNB intervention. Despite attempts at stabilization, bankruptcy was declared, and the bank was wound down completely.
Županjska Banka
Županjska Banka, based in Županja, also collapsed under the weight of bad loans and liquidity shortages. Its inability to meet payment obligations forced the CNB to install administrators, but no turnaround was possible. Bankruptcy proceedings followed, ending the bank's existence.
Vukovarska Banka
Vukovarska Banka, still fragile from the war-damaged economy, failed during the crisis. With insolvency evident and no viable path to rehabilitation, it was liquidated through bankruptcy. This marked the end of one of the key financial institutions in eastern Croatia.
Ilirija Banka
Ilirija Banka was another smaller regional institution that entered bankruptcy in 1999. Weak capitalization, poor management practices, and inability to withstand the crisis pressures sealed its fate.
The central bank concluded that several banks had no chance of recovery - the most effective resolution was urgently initiating bankruptcy proceedings.
Neretvansko Gospodarska Banka
This bank, tied to the Neretva region, also disappeared during the crisis. It had a narrow market base and significant exposure to bad loans. When liquidity collapsed, bankruptcy was unavoidable.
Trgovačko-Turistička Banka
Specialized in trade and tourism financing, this bank was heavily exposed to risky lending. By 1999, it was insolvent. Like other small and mid-sized banks, it was placed into bankruptcy and ceased to exist.
Conclusion
The disappearance of these banks in the 1998-1999 crisis reshaped Croatia's financial system. It was a painful process for depositors and employees, but it also cleared space for stronger institutions and stricter regulation. The lessons from these bankruptcies still echo in Croatia's banking policy today.
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