The IFIS Fund was the first to buy back receivables from the Czech Sberbank, which the Czech National Bank illegally revoked its license. Clients’ receivables arose mainly from deposits in accounts where balances were above the insured limit of CZK 2.5 million. IFIS currently offers lenders a redemption of half the face value. The majority shareholder of the IFIS fund, Marek Indra announced today. According to him, receivables in the amount of around CZK 50 billion are at stake.
The Czech National Bank revoked Sberbank CZ, which is connected to Russia’s Sberbank, a license last week. The decision is not final, Sberbank may file an appeal. IFIS expects Sberbank to go into liquidation within a few months at the latest.
“Previously, Sberbank’s clients have approached us individually about the possibility of selling receivables to us or helping them realize the offsetting of their mutual liabilities and receivables. The fund also offered a solution to other former Sberbank clients,” said Indra.
According to Indra, the most probable scenario for Sberbank is to go into liquidation. From the cases so far, it can be expected that even if everything starts with liquidation, creditors will not be satisfied with claims from uninsured deposits until insolvency. The whole process can take years, and the settlement will probably cover only a proportion of the receivables, mainly according to the success rate of the bank’s loans and other assets.
The IFIS Fund is involved in large insolvency proceedings. For example, it is one of Arca Investment’s largest creditors. In her case, the creditors were recognized as receivables for almost CZK 16 billion.
In the case of Sberbank, the volume of registered receivables will probably be significantly higher. At the end of September 2021, the bank had a balance sheet total of CZK 85.5 billion. The largest items on assets were loans (CZK 73.4 billion), cash and deposits with banks (CZK 6.7 billion) and financial assets (CZK 2.6 billion). Deposits amounted to almost CZK 75 billion, share capital to CZK 6.8 billion and retained earnings to CZK 2.2 billion. Clients with deposits worth CZK 24.2 billion were entitled to a payment from the guarantee fund, leaving almost CZK 50 billion to claim, Indra pointed out.
The last major bank failure in the Czech market was the case of Union Bank in 2003, where bankruptcy was declared due to insufficient assets. In her case, the creditors received a paid part of the funds within the so-called partial schedule. In 2004, they received one-fifth of the recognized receivables and another approximately one-tenth in 2010. The liquidation of Union Bank has not been completed to this day.
On 28 February 2022, the CNB initiated proceedings with Sberbank to revoke the license in response to a wave of deposit withdrawals, due to which Sberbank did not have sufficient liquidity. From the same date, Sberbank may not accept new deposits or provide new loans. According to the deposit insurance rules, clients were entitled to compensation up to the equivalent of 100,000 euros, in some cases 200,000 euros (about five million crowns). The rest of the deposits above this value are now frozen in the bank until Sberbank settles its receivables and liabilities.
Source: IFIS and CTK
