The Polish Financial Supervision Authority (KNF) has nominated the Bank Guarantee Fund (BFG) as a conservator of the ailing bank saying that BFG has all the necessary competencies in this field.
As the details surrounding the scandal that has led to the resignation of the head of the Polish Financial Supervision Authority (KNF)are being...see more
“The purpose of appointing a conservator is to support the bank’s bodies in taking action to improve its financial situation, especially by creating and putting into practice a reliable restructuring plan. This is an alternative for the investors’ scenario, which would have involved rapid recapitalization of the bank.(The conservator) will assure the efficient flow of information between Idea Bank and the Office of KNF and create the possibility of monitoring the restructuring process. processes,” the KNF said in a press release.
The press release said that the decision will not affect services for customers.
At the end of April, Idea Bank released its financials for 2018, reporting a consolidated loss of around PLN 1.9 bln (EUR 442 mln), including several large write-offs. In the following few days, the Polish PM announced that the banks in which the State Treasury has a controlling stake do not intend to take over Idea Bank, in which the controlling stake is owned indirectly by billionaire Leszek Czarnecki.
In November 2018, the press reported about the visit of Mr Czarnecki in the Office of then KNF head, Marek Chrzanowski, during which the official allegedly solicited a bribe of PLN 40 mln (EUR 9.3 mln). The billionaire recorded the conversation, where the proposition was made. However, the actual sum in question did not appear on tape and was allegedly written on a piece of paper.
Mr Chrzanowski was charged with abuse of powers during the conversation with Mr Czarnecki and removed from his post at the KNF. His successor is Mr Jacek Jastrzębski, a legal professor and banking lawyer.
The banking sector reacted nervously to the loss of Idea Bank that was announced at the end of April. The banking index on the stock exchange fell at that time by more than 10% amidst concerns that Idea’s deposits of more than PLN 17 bln (EUR 4 bln) might have to be covered by the Banking Guarantee Fund to which all the banks contribute should it collapse.