General Electric (GE) has written off PLN916mn (€215mn) of goodwill at its Polish unit Bank BPH as it pushes to agree a valuation and complete the sale of the lender, the bank announced on March 21.

BPH wrote off PLN761mn on a group level - which includes two asset management companies - and PLN155mn on a bank level, it said. The lender said the action came after taking note of GE's concerns over the valuation of the bank, as the US giant looks to finally offload the asset. The bank said it is unlikely to yield a price larger than book value. 

GE has been trying to sell BPH since 2014, with Alior Bank – in which PZU is the largest stakeholder at 25% - reported in final stage talks to buy the lender. State-run insurer PZU is reviving a push to build a large banking group as part of a state strategy to “repolonise” the sector, according to reports.

The insurer paused the effort last year, however, unable to agree on valuation with BPH, and likely Raiffeisen Bank International's local unit Polbank also - over the past 18 months or so. The massive uncertainty plaguing Poland number of adverse conditions has all but halted M&A deals.

Profitability is suffering due to record low interest rates, while lenders have been forced to bear extra costs to funds guaranteeing the stability of the financial system. However, the main unknown is a forthcoming bill to make the banks take a hit on the conversion of loans. The scheme, focused on Swiss franc mortgages, is likely to cost tens of billions of although the government is thought likely to try to lower the tab somewhat from the original proposal. 

BPH’s CHF loans portfolio is said to be excluded from the sale, as GE faces internal pressure to sell. However, Alior is still likely to push for a discount. The Polish banking sector reported a 25% drop in profitability in 2015, and the outlook for 2016 is far from rosy.

“The likelihood of the potential transaction to sell BPH achieving the bank’s net book value is small,” Bank BPH said in a statement. Polish banks currently trade on the Warsaw Stock Exchange at an average of 1.3x book value.

BPH's market value fell 37% in 2015 on the back of the uncertainty over its Swiss-franc mortgage portfolio. It has regained 12% this year and is now worth $698mn (€621mn) due to market speculation on the sale, reports Reuters.