New Digital Bank “Partners Banka” to Launch in Czech Market, Focusing on Investment Advisory Services

A new entrant, Partners Banka, is poised to make its debut in the Czech banking sector in the coming spring. Operated by the financial advisory company Partners, which secured a banking license in August, Partners Banka will have a specific focus on individual customers and intends to provide investment advice as a central service, considering this advisory role as its competitive advantage.

The bank will commence its full operations on November 1st, initially with a small team of employees. It plans to open its services to the public in the first quarter of 2024. Moreover, Partners Banka is already contemplating expansion plans, including potential entry into foreign markets, with Slovakia being among the options.

While the bank will offer traditional banking products like current and savings accounts, it will also specialize in specific target groups, such as providing mortgages for entrepreneurs and financing energy-related investments, like insulation projects. However, this landscape may present formidable competition, particularly from building societies that are expected to offer subsidized loans for energy-saving initiatives from the next year.

Partners Banka’s primary focus will be on serving individual clients and families rather than catering to legal entities. Nevertheless, self-employed individuals, including freelancers, will be able to open accounts, allowing separate management of personal and business finances. Notably, Partners Banka is a purely digital bank and does not handle cash transactions, except for ATM withdrawals.

The bank’s strategy is to offer most basic banking services free of charge, covering account maintenance, ATM withdrawals within the Czech Republic and abroad, and domestic and EU payments. Partners Banka plans to generate revenue through investment advisory services and interest margins.

With the backing of over 160 existing branches and advisors from the Partners financial group, the bank intends to develop its business and customer services primarily through mobile banking. It will not provide traditional internet banking, as this approach aims to protect clients from phishing cyberattacks.

Partners Banka positions its core value proposition within the investment advisory field, leveraging Partners’ extensive experience in this domain. In line with this focus, the bank is planning to apply for a license as a securities trader.

The bank’s initial capital amounts to three billion Czech koruna and is entirely owned by Czech entities, including around a thousand advisors, managers, directors, and employees from the Partners group. External entities like Pale Fire Capital, Reflex Capital, and Tomáš Čupr have invested in the project, collectively holding 18.5% of the bank. The remaining 81.5% is held by Partners’ co-founders Radim Lukeš and Petr Borkovec, along with other individuals from the company.

Partners Banka is not the sole player gearing up to enter the Czech banking market. Investment group RSBC is also planning to make a foray. In contrast, Hello Bank is wrapping up its operations, with its assets being acquired by Česká spořitelna. Additionally, Sberbank faced financial difficulties last year. Moreover, there had been discussions of a potential merger between Moneta Money Bank and Air Bank, both owned by PPF; however, PPF ultimately withdrew from the proposed deal.

Article by Prague Forum

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