Half a year after the collapse of Sberbank CZ, the Guarantee System has paid out over 97 percent of insured deposits to its clients
Prague, 9 September 2022 – The Financial Market Guarantee System commenced the payout of deposit compensation to clients of the bankrupt Sberbank CZ at Komerční banka branches six months ago. Since then, more than 84,000 clients have come to receive payouts for their insured deposits, with more than CZK 25 billion being returned.
In terms of total compensation paid, the payout for Sberbank clients is the largest that the Guarantee System, formerly called the Deposit Insurance Fund, has ever made. Total insured deposits at Sberbank CZ amounted to CZK 25.878 billion. “In terms of the total amount of insured deposits, the Sberbank payout is the largest. In terms of the number of clients receiving payments, the largest payout in history was that for clients of the bankrupt Union banka in 2003, which was for 130,000 clients. However, Sberbank comes in second place with over 121,000 clients,” explains Renáta Kadlecová, FMGS managing director.
In the six months since the commencement of deposit compensation payout, more than 84,000 clients have either collected their compensation for insured deposits at Komerční banka branches or applied for it by correspondence. The Guarantee System has paid out more than CZK 25.188 billion to them. This means there is around CZK 700 million still to be paid out, to which 37,000 clients of the failed bank are entitled. “Bank clients entitled to the payout of deposit compensation include a large number who had small balances at Sberbank. It is not uncommon for such clients not to come to collect compensation. It is simply not worth it for them to go to a branch of the paying bank for a payout of only a few crowns,” Renáta Kadlecová explains. Such uncollected funds will remain in the Guarantee System and will be used for other deposit compensation payout.
Interesting payout figures
Komerční banka’s paying branch in Brno has seen most clients, with a total of 4,894 by the end of August. Jihlava is in second place with 2,103 clients, while Komerční banka’s branch on Wenceslas Square in Prague recorded the third-largest number of clients.
Most clients (68%) came for their compensation in March. About a sixth came in April. “As a rule, most clients come for their compensation in the days immediately after payout commences. 13,348 clients arrived on Wednesday, 9 March, 7,971 the next day, and 6,301 clients on Friday, 11 March. Since the end of March, several hundred clients have been coming every day,” Renáta Kadlecová calculates.
In addition to basic compensation, a maximum of the equivalent of EUR 100,000 per client, it was also possible to apply for increased compensation, which can reach up to twice that amount. This can only be obtained in cases strictly defined by law, such as in relation to the sale of a residential property or inheritance. 309 clients of the bank applied for increased compensation within the statutory deadline, with 124 meeting the conditions for such payout.
In addition to ordinary clients (natural and legal persons), institutional clients are also entitled to payouts of deposit compensation in cases strictly defined by law. The Guarantee System has received 18 eligible requests from institutional clients. All were from bailiffs, which kept accounts for 18,024 clients. In such cases, the compensation for deposits went to the bailiffs, which will then settle with the individual creditors.
The ages of the youngest and oldest clients receiving payouts might be of interest. The youngest client to whom deposit compensation has been paid out (through their legal representative) was born in 2021. The oldest was born in 1923.
If clients do not agree with the compensation amount or have found a discrepancy, they can complain to the Guarantee System. Since the commencement of the payouts, 750 Sberbank CZ clients have done so, with the Guarantee System assessing approximately 20% of such complaints as justified. The most common reasons for unjustified complaints were, for example, that clients were not paid their entire deposits because they exceeded the legal limit of EUR 100,000 per person, that they were not paid out in the currency of the account (often in rubles), or that they were not compensated for balances on investment accounts (securities), which are not subject to statutory insurance.
Payouts for insured deposits continue
Deposit compensation payout relating to Sberbank will continue for three years from its commencement, meaning until 10 March 2025. Clients of the bank can go to branches of the paying bank, Komerční banka, a.s., for the payout of compensation from insured deposits.
In order to claim the payout of basic compensation (meaning up to the equivalent of EUR 100,000, in the case of Sberbank CZ CZK 2,499,500), it is not necessary to fill in anything, or to report to or register with the Guarantee System. All you have to do is submit a proof of identity at a branch of the paying bank proving your entitlement to collect the compensation, and choose the account onto which you want the deposit compensation to be transferred, or indicate that you want the compensation to be paid out in cash.
All Sberbank clients entitled to the payout of compensation for insured deposits have received a registered letter from the Guarantee System with precise instructions and the amount of their insured deposits at the bank. The insurance applies to all deposits (e.g. current and savings accounts, term deposits, etc.), as well as to interest on deposits calculated as of the record date (28 February 2022).
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