22.05.2017

CZECH NATIONAL BANK GRANTS ITS FIRST LICENCE TO A BRANCH OF A BANK REGISTERED OUTSIDE THE EU

Prague, 22 May 2017 – In early May, the Czech National Bank granted its first ever licence to a branch of a bank with its registered office in a non-EU country. The bank is Industrial and Commercial Bank of China. From the perspective of the Financial Market Guarantee System, this is the only branch of a bank that does not have its registered office in the Czech Republic but is governed by the Czech deposit insurance system.

Industrial and Commercial Bank of China (ICBC), whose head office is in Beijing, is the world’s largest bank according to the latest data on its balance sheet total. Previously, the bank was represented in Europe by ICBC Europe S.A. Luxembourg, with branches in France, Belgium, the Netherlands, Luxembourg and Spain. Now another branch has been added, this time in the Czech Republic. However, its head office is in Beijing.

Unlike the branches of banks which have registered offices in EU Member States and which participate in the deposit insurance systems in their respective countries (such as the branch of mBank from Poland, ING Bank from the Netherlands, and the branch of Bank of China – another Chinese bank, whose European head office is in Hungary), the situation is different for newcomer ICBC.

“As the head office of the branch is outside the EU, it participates in the Czech deposit insurance system. Thus, ICBC is the first and only branch of a bank on the Czech banking market that does not have its registered office in the Czech Republic but is governed by the Czech deposit insurance system,” Renáta Kadlecová, Managing Director of the Financial Market Guarantee System, explains. Hence, client deposits in the ICBC branch in Prague are insured with the Financial Market Guarantee System and are subject to the same insurance conditions as deposits in Czech banks, building societies and credit unions. The basic insurance limit is again €100,000 per client per institution.

Insurance covering the branches of foreign banks with registered offices in the EU and operating in the Czech Republic – the deposits in these institutions are insured with the deposit insurance system in the country where the bank has its registered office. The minimum deposit insurance level in EU Member States, just as in the Czech Republic, is 100% of the deposit but no more than €100,000. The deposit insurance information must be provided to depositors by the relevant branch of a foreign bank, and can also be obtained from the relevant deposit insurance system.

Insurance covering the branches of foreign banks with registered offices outside the EU and operating in the Czech Republic – the deposits in these institutions are insured with the Financial Market Guarantee System and subject to the same insurance conditions as deposits in Czech banks, building societies and credit unions.

The list and precise classification of banks and bank branches is available at:

https://www.garancnisystem.cz/where-is-it-insured/

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