1 March 2022
The European Single Resolution Board has launched winding up proceedings at the parent of Sberbank Hungary, the Austrian Sberbank Europe AG. Due to the serious liquidity and capital problems of Sberbank Hungary Ltd, the Magyar Nemzeti Bank has revoked the domestic credit institution’s operating licence and has ordered its winding up. The National Deposit Insurance Fund will reimburse all eligible customers their deposit claims up to EUR 100,000 within ten working days.
On 1 March, the Single Resolution Board (SRB), the resolution authority of the European Union, announced that it ordered the winding up of Sberbank Europe AG, the Austrian parent company of Sberbank Hungary Ltd. Earlier, serious solvency (liquidity) problems arose at Sberbank Hungary, due to the negative effects from its Austrian parent company and its owner, Sberbank Russia, itself subject to international sanctions, in the wake of the Russo-Ukrainian crisis.
With the parent company declared insolvent, the Magyar Nemzeti Bank (MNB) revoked the operating licence of Sberbank Hungary Ltd and initiated its winding up at court. The MNB designated Financial Stability and Liquidator Non-profit Limited Liability Company (PSFN) as the liquidator of the company.
Over the past few days, the MNB has attempted to address the situation of Sberbank Hungary in a satisfactory manner, in order to protect the interests of the customers and all parties concerned, but the attempts have been unsuccessful.
Depending on the actual amount of their deposit, the National Deposit Insurance Fund (NDIF) will reimburse depositors with insured claims up to EUR 100,000 (over HUF 36,000,000 at current exchange rates) within ten working days under the Act on Credit Institutions. Based on information provided by Sberbank Hungary to the NDIF, the reimbursement will take place automatically, without the need for customers to request it at the Fund.
Except in the case of investment funds, insurers and investment enterprises, protection provided by the NDIF applies to all customers. The protection also extends to forint or foreign currency deposits, including current account deposits, time deposits, certificates of deposit, and their interest. The insurance provides protection for deposits not only of private individuals but also of undertakings, associations, foundations, including persons living abroad and foreigners. Local authorities with annual budgets of less than EUR 500,000 are also protected. If a customer has more than one deposit with the bank, these will be added together in establishing the amount of compensation, and will be payable up to the insurance limit.
The NDIF will provide further and more detailed information to customers. The MNB will also keep customers and all interested parties informed on the relevant issues. The MNB’s customer service in Budapest and the Financial Navigator advisory offices in county seats will answer customers’ enquiries in writing, by phone or personally.
The recent events have no effect on other members of the domestic financial system, which continue to serve their customers in a stable and normal manner, as has been demonstrated by recent periods of calm.
Magyar Nemzeti Bank