EGAP Takeover Of Czech Export Bank ApprovedPetr Dubinsky
The government has approved the State Export Guarantee and Insurance Corporation (EGAP) takeover of the Czech Export Bank (CEB). To streamline the operations of both agencies.
The move, proposed by the Ministry of Finance will lead to lower operating costs. CEB will no longer compete with commercial banks but will complement their credit services in areas the banks don’t serve.
CEB provides Czech exporters with financial products and advice for export to riskier territories and new prospective markets. EGAP, which currently holds a 16% stake in CEB, provides support for exports by insuring exports, primarily to countries outside the EU.
The state has exercised ownership rights in both EGAP and CEB since last year’s government decision only through the Ministry of Finance. Previously, the Ministry of Industry and Trade, Agriculture and Foreign Affairs had a stake in both institutions.
Last year, the Czech Export Bank increased its net profit by 37 percent year-on-year to CZK 352 million. The bank’s assets decreased by 8.5 percent to CZK 57.45 billion. EGAP made its first profit since 2010. After losing CZK 2.7 billion last year, with earnings of CZK 210 million. Last year, the company supported 61 Czech exporters, with exports worth almost CZK 36 billion and 203 new insurance contracts.