Česká Spořitelna, a leading Czech bank, has completed its acquisition of Sberbank CZ’s loan portfolio. The transfer of the loan portfolio, which has been cleared of non-performing and problematic loans, was recorded in the register. Česká Spořitelna paid CZK 41.053 billion for the loans, which had a nominal value of CZK 47.1 billion.

Sberbank CZ declared bankruptcy in August 2021, and the Czech National Bank (ČNB) revoked the bank’s license in May 2022. The ČNB initiated steps to revoke the license due to the bank’s deteriorating situation caused by the outflow of deposits after the Russian invasion of Ukraine. Sberbank CZ’s insolvency administrator, Jiřina Lužová, signed a purchase agreement with Česká Spořitelna in December 2021 to sell the bank’s loans.

Lužová expects that the proceeds from the sale of the loan portfolio, along with the available cash of the bank, including accrued interest, and the expected proceeds from the sale of other assets of Sberbank CZ, will likely be sufficient to fully satisfy creditors in the first and second groups, and with a high probability of over 95% satisfaction of creditors in the third group. The third group includes regions, cities, municipalities, and large companies. Lužová even stated that it is possible that even creditors in the third group will be satisfied with almost 100%.

The acquisition of the loan portfolio by Česká Spořitelna marks another consolidation of the Czech banking sector, with larger banks acquiring smaller ones. It is expected that this trend will continue in the coming years. The acquisition will also bring new clients to Česká Spořitelna, who will benefit from the bank’s range of products and services.

The sale of the loan portfolio is a positive development for Sberbank CZ’s creditors, who are expected to receive full satisfaction. It also marks the end of Sberbank CZ’s operations in the Czech Republic. The acquisition by Česká Spořitelna will help to ensure that the clients of Sberbank CZ continue to receive banking services and support.

Article by Prague Forum