BFG signs final agreement for sale of VeloBank

“On August 1, the Bank Guarantee Fund signed a final agreement to sell 100 percent of VeloBank SA (the “Bank”) shares to Promontoria Holding 418 BV, which is indirectly owned by Cerberus Capital Management, LP, the European Bank for Reconstruction and Development ('EBOR') and the International Finance Corporation ('IFC', part of the World Bank Group),” the BFG announced on Thursday.

The announcement emphasized that the sale of the bank means the end of the nearly two-year-long process of GNB's compulsory restructuring and fulfillment of obligations towards the European Commission. The Commission “closely monitored” the process of the compulsory restructuring of Getin Noble Bank and the sale of VeloBank. “The purchase price of the shares is PLN 375 million, while the recapitalization of the Bank by the buyer amounts to PLN 687 million. This is the amount of recapitalization necessary to obtain the required, safe and agreed capital ratios in the negotiation process, taking into account the current financial situation and the structure of the Bank's balance sheet,” the BFG informed. In the announcement, the fund recalled that the process of the compulsory restructuring of Getin Noble Bank SA began on September 30, 2022, after the BFG decided to transfer part of GNB's operations to a bridge institution, i.e. VeloBank. “The BFG decision to initiate compulsory restructuring protected all GNB depositors and all of their deposits in the amount of PLN 38.1 billion (as of September 30, 2022)” – the BFG reported. The announcement recalled that the compulsory restructuring process was carried out in cooperation with the Commercial Bank Protection System, consisting of the eight largest commercial banks operating in Poland (Alior Bank, Bank Millennium, Bank Pekao, BNP Paribas Bank Polska, ING Bank Śląski, mBank, Powszechna Kasa Oszczędności Bank Polski, Santander Bank Polska).

“After the transaction is closed, VeloBank will cease to be a bridge institution and will therefore no longer be subject to any restrictions on its operations imposed by the European Commission, becoming a normal banking entity operating on our market,” the BFG reported. “The sale of the Bank has no impact on the situation or customer service. The funds accumulated in VeloBank are still protected by the Bank Guarantee Fund on the same terms as in other banks covered by the Polish deposit guarantee system,” the release reads.