Bank Guarantee Fund initiates resolution procedure for Idea Bank

Poland's Bank Guarantee Fund launched a resolution procedure for Idea Bank SA due to its difficult capital position, with Bank Pekao SA acquiring certain assets and liabilities of the financially troubled lender.

The takeover of Idea Bank's business will increase Bank Pekao's assets by 14.4 billion zlotys and will accelerate the lender's growth in the segment of micro, small and medium-sized companies. The assets acquired from Idea Bank include liquid funds and Treasury bonds, loans and advances to customers and other financial instruments. The lender also took over Idea Bank's customer deposits.

Meanwhile, holdings in the subsidiaries and affiliates of Idea Bank, corporate bonds issued by debt collector GetBack and other assets, rights and liabilities associated with actions, legal acts or unlawful activities that Idea Bank might have been involved in were excluded from the transaction.

As part of the takeover, the Bank Guarantee Fund provided Bank Pekao with a loss-coverage guarantee against potential risks related to the acquired rights and liabilities, thanks to which the transaction will have a minimal impact on the capital position of Pekao. The takeover will not affect the dividend capacity of the bank and it will also receive a 193 million-zloty subsidy from the Bank Guarantee Fund to cover the difference between the value of assets and liabilities taken over from Idea Bank.

Idea Bank's main shareholder Leszek Czarnecki, who also controls Getin Noble Bank SA, plans to appeal the Bank Guarantee Fund's resolution decision in court and could sue Polish authorities for damages, news agency PAP reported Dec. 31.

Pekao Bank also said that its management board vice presidents Tomasz Styczyński and Grzegorz Olszewski decided to resign due a "different vision of the bank's development," with Parkiet attributing the resignations to Pekao's decision to participate in Idea Bank's resolution procedure. Olszewski's resignation became effective Dec. 31, and Styczyński will step down Jan. 31.

As of Jan. 1, US$1 was equivalent to 3.73 Polish zlotys.