The forced takeover of Investicni a Postovni Banka (IPB), once the third largest Czech bank, in June 2000 has become the costliest and most controversial bank failure ever in central and eastern Europe. Since armed police stormed IPB’s Prague headquarters and put it under forced administration, the Czech government has had to pay about Kc130bn (€4bn) to repair the stricken bank’s balance sheet. It now faces more costs and potential embarrassment from a bitter legal dispute with Nomura Securities of Japan, the bank’s minority owner.
For its part, Nomura has lost its once commanding position in the Czech investment banking business and also faces serious allegations over its behaviour at IPB. A Nomura representative has been charged with criminal offences and both the government and Ceskoslovenska Obchodni Banka (CSOB), IPB’s new owner, are pursuing it for huge damages.
