Good effects of Idea Bank restructuring
The forced restructuring of Idea Bank helped protect some PLN 2.3 billion. This is the result of an audit conducted by PwC for the Bank Guarantee Fund (BFG).
Of this, PLN 0.8bn is the money of the bank’s clients, and over PLN 1.5bn is guaranteed by the fund. If the bank collapsed, owners of equity instruments and bondholders whose claims were written off would get nothing. On the other hand, the remaining creditors would get much less than they would through restructuring. PwC concludes that the forced restructuring process did not breach the principle of non-deterioration of the situation of owners and creditors. Therefore, the BFG does not have to pay a supplementary claim for the losses suffered by owners and creditors. In the optimistic scenario, their potential losses in case of Idea Bank’s bankruptcy would amount to PLN 1.6 billion. In the baseline scenario, these losses could exceed PLN 3 billion. Under the simplified restructuring, they lost only PLN 560 million.
The BFG decided to hand over Idea Bank’s core business to Pekao bank at the end of 2020. Idea Bank is the third case of forced restructuring conducted by the BFG. The first two concerned cooperative banks.