Pekao S.A. Bank saved Idea Bank from bankruptcy
Last year, Idea Bank announced that it was on the verge of bankruptcy. At that time the Polish Bank Guarantee Fund or BFG carried out a restructuring in order to improve the institution’s affairs. However, the steps taken did not yield results, and Poland’s largest bank, Pekao S.A., absorbed Idea Bank.
BFG was created to control processes in the financial system of the country, it monitors the stability of institutions and also takes over a part of operations for bankruptcy procedures.
Idea Bank includes offices in Poland, Belarus, Ukraine and Romania. Now all of them are taken over by Pekao bank. According to the takeover deal, the operational processes will be fully integrated by the end of this year.
It is worth mentioning that the Polish bank did not manage directly the Ukrainian subdivision of Idea Bank. The full package of shares of the institution belonged to the company Getin Holding from Poland. The latter, in turn, was the majority shareholder of Idea Bank, which owns more than 54% of the bank. This implies that the Ukrainian division was not transferred to Pekao.
Idea Bank’s bankruptcy first came to light when its capital reached the negative $130 million mark. According to a statement from Pekao representatives, the institution pledged to take care of the bank’s clients and their deposits and loans, but owners of Idea Bank’s shares and bonds will not be compensated for their investments. This decision is in accordance with the rules of compensation of losses of owners of banks that are going through bankruptcy proceedings. According to the legal norms, shares and bonds of the bank should be redeemed without financial compensation.
Recently it became known that the Ukrainian division of Idea Bank plans to buy Alfa Bank. The deal should be completed by the end of this year. A statement to this effect has already been received from Getin Holding, which claims that the deal has reached its final stage and the details of the transition are being negotiated. The purchase process itself is carried out by the Polish owner through an intermediary who works on the Ukrainian market and is familiar with the nuances of the local legislation.
Prior to the deal with Alfa Bank, Getin Holding had already planned to sell Ukrainian Idea Bank. Then, in 2019, the Polish holding wanted to transfer the bank to the investment company Dragon Capital, the acquisition amount was announced at UAH 1.368 billion. However, in the summer of 2020, Getin Holding decided to suspend the sale procedure. A few months later, the Polish government began the procedure of arresting the Polish billionaire, who until recently owned Idea Bank.
At the beginning of this year, the National Bank of Ukraine applied a number of punitive programs for the local division for cooperation with customers who are on the international sanctions list.
