What the bank needed, said Vavra, was a strategic partner skilled in commercial and retail banking, the type of partner that would likely back off without government guarantees. IPB, the nation's largest bank, learned the lesson the hard way. It collapsed just two years after being purchased by an investment banking firm that had little desire to help build a commercial bank. The fiasco, still being sorted out, will cost the government billions. The government was more conservative, putting the top figure at between 35 billion Kc and 45 billion Kc.
Most analysts agree with the government figure.
Early rumors place Societe Generale's and UniCredito's bids around 40 billion Kc, and HypoVereinsbank's as the lowest. In the red for three years, Komercni returned to profitability in the first quarter of this year, posting a net profit of 1.3 billion Kc. Its return on equity, a main profit indicator for banks, jumped from minus 36 percent in 1998 to a projected 20 percent by 2002. The Prague Post Online contains a selection of articles that have been printed in The Prague Post , a weekly newspaper published in the Czech Republic. Unauthorized reproduction is strictly prohibited.