The Czech National Bank (CNB) has initiated steps to withdraw the license of Sberbank CZ.
The reason is the deterioration of the bank’s situation, which occurred with the outflow of deposits after Russia launched its military invasion of Ukraine.
At the same time, CNB has prevented the bank from handling assets and liabilities, including new loans and taking deposits.
According to the Bank Board, the stability of the Czech financial sector should not be affected.
“The liquidity crisis of Sberbank CZ was caused by external, geopolitical developments. This is an isolated and specific problem of the bank, which is not significant from the point of view of the domestic banking sector. It thus remains one of the most robust and stable in Europe,” said CNB Governor Jiří Rusnok.
Deposits of banks’ clients, including Sberbank, are legally insured for up to €100,000 (roughly CZK 2.5 million) per depositor at a single bank or cooperative bank.
Financial compensation to clients will be provided by the Financial Market Guarantee System, which should start paying to people within seven working days of receiving written notification from the CNB of the inability of a bank in crisis to meet its obligations to its clients.
A total of CZK 35 billion is available in the Financial Market Guarantee System for the payment of deposits subject to insurance.
“I assure depositors that the Guarantee System has sufficient funds to satisfy all legitimate claims for the payment of compensation of deposits,” said Renáta Kadlecová, Executive Director of the Financial Market Guarantee System.
