This statement provides information that has become available since the issuance of the staff report on March 16, 2017. The thrust of the staff appraisal remains unchanged.
1. The Central Bank of San Marino (CBSM) has recently (announced on March 3, 2017) placed one bank (about 7 percent of total assets, the sixth largest by asset size) under special administration in accordance with Article 78 of Law no. 165/2005, “Law on Companies and on Banking, Financial and Insurance Services.” The CBSM has also appointed a surveillance committee to make recommendations for necessary actions to be taken by the bank in the coming days.
2. The CBSM informed staff that the most recent recapitalization of the largest bank, Cassa di Risparmio di San Marino (CRSM) in 2016 entailed the use of an inflated value of a real estate asset, which brought CRSM’s capital adequacy ratio to 11.4 percent, meeting the regulatory requirement. The CBSM is investigating the matter further, as well as assessing the bank’s financial position in the context of the pending AQR exercise.