Background
Sberbank CZ was an indirect subsidiary of the Russian state-owned bank Sberbank. In 2020, it was the 10th largest Czech bank by assets and had a total of 95,000 individuals and 11,000 companies on its client list. Its rapid fall into insolvency and subsequent bankruptcy is described in more detail below.
After the start of the Russia-Ukraine war on 24 February 2022, many countries began to take measures against Russian financial institutions and their subsidiaries. The Russian state-owned Sberbank was no exception.
The February events commenced the downfall of Sberbank CZ, as the start of the Russian-Ukrainian war resulted in an immediate mass withdrawal of client deposits, leading to a liquidity crisis. Moreover, the US subjected Sberbank to full blocking sanctions in April of the same year, which also affected its access to banking software. This only contributed to the already difficult situation of Sberbank CZ.
All of this meant the end of Sberbank in the Czech Republic and began a saga of the largest bank insolvency in the history of the Czech Republic.
The fall into insolvency and bankruptcy
As of 25 February 2022, Sberbank CZ was unable to meet its obligations and thus, with effect on 30 April 2022, Sberbank CZ’s bank licence was officially revoked by the Czech National Bank (CNB). Immediately after that, on 2 May 2022, the Municipal Court in Prague appointed Jiřina Lužová as liquidator, which resulted in the Prague Municipal Court declaring Sberbank CZ bankrupt in August that year and appointing Jiřina Lužová as insolvency trustee.
Česká spořitelna enters the scene
After Sberbank CZ went into insolvency and subsequently declared bankrupt, Jiřina Lužová signed a preliminary agreement with Česká spořitelna (CS) in November 2022 for the future purchase of Sberbank CZ’s loan portfolio worth CZK 47.1 billion, with the purchase price set at CZK 41.05 billion.
The purchase agreement was signed with CS a month later after the plan was approved by the CNB and the Office for the Protection of Competition (UOHS). The transaction was also approved by the Municipal Court in Prague.
In early May 2023, the transaction was completed and CS acquired Sberbank CZ’s loan portfolio.
Claims of the Sberbank’s creditors
Following the sale of Sberbank CZ’s portfolio, the insolvency court approved the payment of creditors in the form of a partial distribution in November 2023. The payout was approved for more than 15,300 creditors, who were earmarked to receive over CZK 56.8 billion. However, one of the creditors, LitFin SPV 9, appealed the decision on distribution, which resulted in the payout being postponed. After the appellate court upheld the distribution decision in February 2024, the distribution started on 18 March 2024. According to a member of the Board of Directors and Chief Operating Officer of Komerční banka, which organized the distribution of 26.2 billion to the creditors who were not paid directly by the insolvency trustee, the payout was trouble-free and without complications.
Current situation and notable facts
The largest Czech bank insolvency case – Sberbank CZ – is still in process but is fast approaching a successful conclusion. This is an unprecedented case in the Czech Republic, both in terms of the size of the whole insolvency case and the high percentage of creditors’ satisfaction. Those creditors have been paid 95% of their claim amounts so far, which is an unprecedentedly high level of satisfaction for insolvency situations, and the insolvency trustee is planning a payout of additional 3-4%. The case is likely to continue till the end of 2025.
