Tutorial: Business Academy Topic: Financial Market and Banks Prepared by: Ing. Ingrid Ilčíková Projekt Anglicky v odborných předmětech, CZ.1.07/1.3.09/ je spolufinancován Evropským sociálním fondem a státním rozpočtem České republiky.

TYPES OF BANKS

 central - the CNB – since 1993, care of currency stability, inflation targeting  universal - the most important part of the banking system, they provide a wide range of banking products, may have a domestic or foreign owner, the dominant role is played by big banks – in the CR called The Big Four  savings banks – originally orientated rather on retail, nowadays on natural persons, legal entities, entrepreneurs, cities; the name of the bank - i.e. savings bank - is legally protected, it is equal to a bank  building societies – a special kind of savings banks, for building purposes only, receiving purposed deposits under specified conditions, providing building loans, regular payments for a period of 6 years, a fixed interest rate, state aid (subsidy), the possibility to deduct the interests from the tax base; established in 1993, some changes since 2012 – the maximum amount of the state aid will be 2000 CZK, the money can be used for housing only, the interests will be taxed

 credit cooperatives = farmer´s cooperative banks - small banks based on the banking principles, provide banking services for their members; in the CR being established since 1996; financial problems → bankruptcy – so nowadays supervised by the CNB  mortgage banks – earn money by bond issues, and on the other hand provide mortgage loans (which are secured by a lien on the property) – the bank must have a special licence for mortgage banking by the CNB

SPECIALIZED BANKS The Czech-Moravian Guarantee and Development Bank – a support for small and medium-sized enterprises  a support for small and medium-sized businesses in the form of guarantees and soft loans using funds from the state budget, structural funds and regions  a support for owners of apartment buildings during their reconstruction  soft loans for water projects The Czech Export Bank – provides state export promotion by providing and financing operations that require long-term sources of financing at interest rates in such volumes that would be otherwise impossible eBank, mBank, private banks

 a member of the Commerzbank  is referred to as „The bank of the 21st century“  the first „pure“ Internet bank  in the CR since November 2007  offers minimum fees, for most clients no fees – however there are some fees due to the competition pressure  an effort to maximize the bank´s connection to the Internet

 offers a wide range of banking services for private persons as well as companies; as the first bank in the Czech Republic has introduced direct banking  in 1997 – named Expandia Bank  in 1998 – the pioneer of direct banking in the Czech market  in 1999 – the gates of the virtual eCity opened; it was a joint project of the eBank and other partners, focused on the support of the Internet purchases  in 2001 – the name changed to „eBanka, plc“  the eBank gradually merged and became a part of the Raiffeisenbank

 focus on top clients (sportsmen, bank managers, large companies, former owners of firms)  foreign banks operating in our market, the first was a German private bank Sal.Oppenheim, others are French, Austrian  the client will deposit million CZK, which are free, and let it work (it cannot be withdrawn in a few days)

THE NUMBER OF BANKS

Since 1990, eighteen Czech banks had to close down due to economic problems The CNB introduced the forced administration  in 1993 the Credit and Industrial bank  in 1994 the Bank Bohemia in liquidation  unsuccessful year 1996 – the receivership in the Ecoagrobank, the First Silesian Bank, the Realitbank, the Great Moravian Bank, the Agrobank; the Union bank took over the Eurobank and the banking house Skala. Those are without the licence and in liquidation  in the Pragobank lost the licence  in 1999 – the Universal bank and the Moravia Bank  in 2002 the Czech National Bank with the approval of the government imposed the forced administration on the Investment and Postal Bank, which merged with the CSOB

 the AB Bank, the Agrobank, the COOP Bank, the Czech Bank, the Ecoagrobank, the Credit and industrial bank, the Credit Bank Plzeň, the Moravia Bank, the Pilsen Bank, the Pragobank, the First Silesian bank, the Realitbank, the Union Bank, the Universal Bank, the Great Moravian Bank, the Bank Bohemia, the Eurobank, the banking house Skala

ACTIVITIES:  How many banks are there in the financial market in the CR in 2011?  Find on the Internet at least one name of a private bank.

RESOURCES:  Klínský, P. Ekonomika 3. Praha: FORTUNA, ISBN  Kolektiv. Finanční trh, průvodcem finančním a kapitálovým trhem. Brno: INFORM katalog, s.r.o ISBN  Juřík, P. Historie bank a spořitelen v Čechách a na Moravě. Praha: Libri, ISBN  Švarcová, J. a kol. Ekonomie – stručný přehled. Zlín: CEED, ISBN  Available on:  Available on: /