CNB launches steps to revoke the licence of Sberbank CZ
The Czech National Bank today launched steps towards the revocation of the banking licence of Sberbank CZ, a.s. This is a result of a deterioration of the bank’s liquidity situation in the context of a significant outflow of deposits after the escalation of the conflict between Russia and Ukraine and Russia’s attack on Ukraine. In this context, the CNB has issued a preliminary measure preventing the bank from disposing of assets and liabilities, including the provision of new loans and accepting deposits.
The CNB Bank Board discussed the situation in Sberbank CZ at its extraordinary meeting on 27 February 2022. The steps regarding Sberbank CZ are being taken in the resolution regime, which addresses the situation of failing banks and proposes measures minimising the impacts on the economy and the financial system. The Bank Board acknowledged that Sberbank CZ is failing and that it cannot be assumed that its failure could be prevented using a different measure within a reasonable timeframe. It can also be assumed that the solution adopted will not affect the stability of the Czech financial sector.
“The liquidity crisis of Sberbank CZ has been caused by external geopolitical developments. It is therefore an isolated and specific problem involving a bank that is not significant from the perspective of the domestic banking sector. The Czech banking sector thus remains one of the most robust and stable in Europe,” said CNB Governor Jiří Rusnok. “The Czech National Bank has been intensively addressing the situation regarding Sberbank CZ since the very start and is doing its utmost to minimise the impacts of the bank’s problems on its clients,” added Governor Rusnok.
The deposits of Sberbank CZ’s clients are subject to statutory insurance of up to EUR 100,000 per client (around CZK 2.5 million). Compensation of 100% is provided up to this limit. The deposits of both citizens (natural persons) and firms (legal entities) are insured. The deposits of municipalities and regions are insured only if they are the recipients of tax revenues and their tax revenues do not exceed the equivalent of EUR 500,000, and provided that other statutory conditions are met.
The payout of compensation for deposits will be organised by the Financial Market Guarantee System through a financial institution it designates. The Guarantee System must commence the payout no later than seven business days of the record date, i.e. the date on which it receives written notification from the Czech National Bank that a failing bank is unable to meet its commitments to clients. According to the CNB’s information, the Financial Market Guarantee System now has CZK 35 billion at its disposal for the payout of insured deposits.
“The Financial Market Guarantee System is ready to commence the payout of compensation of insured deposits in accordance with the law of up to EUR 100,000 per client as soon as it receives the relevant notification from the Czech National Bank,” commented Renáta Kadlecová, Managing Director of the Financial Market Guarantee System, on the situation in Sberbank CZ, adding: “I can assure depositors that the Guarantee System has sufficient funds to satisfy all eligible claims for the payout of deposit compensation.”
The Czech National Bank is the resolution authority for banks with a registered office in the Czech Republic. If a bank is part of an international financial group with a registered office in the EU, the CNB cooperates with the Single Resolution Board (SRB) in a resolution college. The SRB is the institution responsible for the resolution of banks in the banking union. As Sberbank CZ is part of the cross-border group Sberbank Europe AG, the SRB has been informed about the solution adopted by the Czech National Bank.
The SRB today issued a statement regarding a 24-hour moratorium on the activities of the Sberbank Europe AG subsidiaries operating in banking union countries – Austria, Slovenia and Croatia.
Markéta Fišerová
Director of the Communications Division and CNB Spokesperson