Biggest bank failure in Czech history: IPB collapses a quarter of a century ago
In June 2000, Czechia experienced the biggest banking crash in its history. The Investment and Postal Bank (IPB), once the third largest bank in the country, found itself in a deep crisis, ultimately resulting in a dramatic intervention by the state.
Following the 1989 revolution, Czech banks grew rapidly, handing out loans easily and without sufficient oversight. IPB invested in newly privatized companies, many of which proved unable to meet their debt obligations. In 1998, the Japanese investment group Nomura became a strategic investor in IPB, with the goal of stabilizing the bank. Instead, the situation was marked by complex asset transfers, including the controversial "Czech Beer" project, in which IPB was involved in the transfer of ownership of Pilsner Urquell (Plzeňský Prazdroj).
By the late 1990s, reports of the bank’s financial troubles began to emerge. In June 2000, panic erupted and people rushed to withdraw their savings, and tens of billions of crowns left the bank in just a few days. The situation quickly became unsustainable.
The government responded decisively: on June 16, IPB was placed under forced administration, and armed police entered the bank’s headquarters to secure control. Just days later, IPB was taken over by ČSOB for a symbolic one crown. However, the state had to provide massive financial support to cover the bank’s huge losses.
The bailout of IPB ultimately cost taxpayers over CZK 150 billion. Legal disputes with Nomura and other stakeholders dragged on for years, with part of the case ending in international arbitration. The Czech Republic eventually paid Nomura CZK 3.6 billion in settlement, despite arguments that Nomura’s management played a key role in the bank’s collapse.
The fall of IPB became a symbol of the wild 1990s in Czech banking. It was a period of rapid expansion, insufficient regulation, and political infighting. Its consequences affected the country’s financial sector for many years.
