Emptying the bank

It's all about cheap assets, a banker told us a few days before Union banka closed its doors and left the Deposit Insurance Fund to pay out about Kč 16bn to the bank's customers. Those pulling the strings at UB might now have found a way to sell off the bank's assets and to avoid ever repaying the Kč 16bn liability to the Fund. With the help of a friendly judge, UB has been swiftly converted to a regular stock company, thereby allowing it to escape the Czech National Bank's control, and has been declared bankrupt. The asset stripping can now begin, unless the authorities step in. The sell-off will happen fast, before the Deposit Insurance Fund can file a claim. By the time it does, the company will be an empty shell. The loser will be the banking industry and depositors in general, because someone is going to have to cover the Deposit Insurance Fund's loss. Invesmart