Conservatorship imposed at IPB

With the aim of protecting deposits at Investiční a Postovní banka a.s. (IPB) and of safeguarding the stability of the banking sector, the CNB decided today to impose conservatorship at IPB. It has done so with the agreement of the Czech Government and fully in compliance with the previous announcements of the Government and the CNB.

IPB branches remain open and its clients can continue to have full access to their deposits. The Czech National Bank has also issued a guarantee in favour of IPB depositors and creditors ensuring 100% payment of their deposits and certificates, including interest.

As from today, IPB will no longer be managed by its shareholders and management, but by a conservator appointed by the Czech National Bank. There is no reason for concern regarding the fate of funds deposited with IPB or their withdrawal.

Owing to the rapid decline in deposits at the start of the week, IPB found itself in serious liquidity difficulties. It informed the Czech National Bank that without external help it would not be able to fulfil the payment orders of its clients or to meet its commitments. Following the imposition of conservatorship, the CNB is prepared to help to ensure IPB's solvency. Operations on client accounts will thus again be guaranteed.

The insolvency of IPB, the third largest Czech bank, whose services are used by a large number of firms, could impair the fragile growth in the domestic economy. For this reason, too, the Czech Government, after evaluating the bank's situation, agreed to the imposition of conservatorship. Three million depositors have been provided with a full central bank guarantee that they will in no event lose their savings in IPB. The Government and the CNB are also prepared to take joint steps to provide the bank with financial support.

The task of the conservator, who took over the management of IPB today, is to ensure the smooth operation of IPB so as not to jeopardise the stability of the banking sector of the Czech Republic. In line with previous statements, the deposits of all clients - households, businessmen, firms, municipalities and other institutions - are guaranteed in full. During the period of conservatorship, IPB's operations will not be impaired.

Libor Vacek, Finance Ministry spokesman
Milan Tománek, CNB spokesman