A major obstacle to kick-starting this process is the limited capacity of NRB´s capital resources. Thus, the government intends to significantly increase the lending and guarantee capacity of the NRB in a way that does not burden the state budget. The solution will be to integrate both institutions into one group, with the CEB as a 100% owned subsidiary of the NRB. This step is expected to be implemented within the period of 12-18 months. During such a period, both banks will continue to operate independently.
“Today’s government decision is the first step towards building a strong banking group to support small and medium-sized enterprises, exports and the financing of infrastructure projects. The integration of CEB and NRB will not only significantly increase NRB’s lending capacity by tens of billions CZK, but also bring unified strategic management of both banks and cost optimisation reaching tens of millions CZK per year,” said Finance Minister Zbyněk Stanjura. “It is important to emphasise that the integration of the banks will in no way burden the state budget,” he added.
By becoming a wholly owned subsidiary of the NRB, the CEB will strengthen NRB’s capital by CZK 7-8 billion, and will enable an increase in NRB’s immediate lending capacity by up to CZK 30 billion (or an increase in its guarantee capacity at the level of tens of billions CZK), all without additional demands on the state budget. Both entities will also coordinate their strategic activities within the banking group and optimize IT and other processes with the aim of reaching operational saving up to EUR 80 million annually.
“We want to further strengthen the cooperation between the NRB and Czech companies. This will multiply the amount of support we provide through modern financial instruments. At the same time, it is important that the CEB continues to fulfil its specialised role in the area of export support, in line with the new Export Strategy of the Czech Republic,” commented the Minister of Industry and Trade Jozef Síkela on today’s government decision. Adding that the merger of the two banks will also bring savings for the state budget. “We must prepare for the Czech Republic not to be dependent on European subsidies. Strengthening the lending and guarantee capacity of the NRB is one of the important ways to achieve it”.
In the future, the NRB should speak much more in areas such as financing public infrastructure with an emphasis on supporting regions,” said Deputy Prime Minister for Digitisation and Minister for Regional Development Ivan Bartoš.
“The launch of the integration process of the National Development Bank with the Czech Export Bank is an important step in the ongoing transformation of the bank into a full-fledged promotional bank of European format. The integration with CEB creates the background for the NRB to significantly increase its capacity to provide guarantees and preferential loans. It will also bring a number of synergies, particularly in the areas of corporate governance, regulation and business model. Moreover, it should have the benefit of increasing the convenience for clients of both banks in the form of an expanded product portfolio, reduced administration, more comfortable communication and the creation of complementary products and services,” says Tomáš Nidetzký, Chairman of the Board of Directors of the National Development Bank.
Daniel Krumpolc, Chairman of the Board of Directors of the Czech Export Bank, adds, “In cooperation with the Ministry of Finance as our majority shareholder, over the past two years we have managed to transform the Export Bank into a modern and profitable institution that complements the commercial banking sector and offers Czech export-oriented companies tailor-made solutions for their expansion into foreign markets. The launch of the integration process with the NRB will enable the bank to maximise its capital to move the Czech economy towards an economy built on innovation, added value and final products.”