Poland and PZU licking their lips following Pekao stake sale

Poland and PZU licking their lips following Pekao stake sale
Has Christmas come early for the government and PZU with the sale of a stake in Pekao?
By bne IntelliNews July 13, 2016

Polish officials leapt on July 13 in response to UniCredit's swift sale of a 10% stake in the country's second-largest bank Pekao late the previous day. Warsaw made it more than clear it hopes to take the remaining controlling stake off the Italian group's hands.

Speculation that UniCredit wanted to sell part of its 51% stake in Pekao were circulating for weeks before an accelerated book build for a 10% stake, which took place on July 12. The deal has clearly excited the PiS government, which has stated several times since taking office in November that it wants to raise the state's ownship in the banking sector.

“It’s clear that the decision to change Pekao’s ownership structure has just begun. We will be trying to increase the role of Polish institutions in the [banking] industry," Deputy Prime minister Mateusz Morawiecki told PAP

Financial market regulator KNF was also quick to join the party. The watchdog - which rules the banknig sector, M&A in particular, with a firm hand, said it has asked UniCredit about its future plans for the Polish unit. 

"The KNF is, as usual, inquiring into the circumstances of the transaction, among others in the context of future intentions of UniCredit to the investment in Poland,"  a spokesman told PAP.

Poland is keen to reduce the share of foreign capital in the banking sector, in line with its policy of “repolonisation” of the banking industry. That plan, first devised by the previous centre-right Civic Platform government has been taken up with enthusiasm by PiS; it fits with the ruling party's general view that the state should play a bigger role in economy.

State-controlled insurer PZU has played the leading role in those ambitions thus far. On top of the government, KNF has also given its blessing to the plan for PZU to build a top-five banking group. Alior Bank, in which PZU secured a major stake in May 2015 is currently moving forward with an acquisition of BPH from GE Capital.

The insurer has said a number of times in recent weeks that it would be keen to consider buying Pekao should it come up for grabs. Raiffeisen Polbank is another target.

Four other suitors are also reportedly interested in the local unit of Austria's Raiffeisen Bank International, while the likes of state-controlled giant PKO has cast its eyes recently at Pekao. However, KNF has never been shy of imposing terms and conditions on deals, and has long insisted it would oppose any further major consolidation in the bank sector.

PZU certainly sounded confident it is moving closer to buying both lenders following the Pekao transaction, which saw the bank's shares fall to a four year low on the Warsaw Stock Exchange as investors eyed the likelihood of a state takeover.

PZU will mull the possibility of acquiring Raiffeisen and Pekao, CEO Michal Krupinski told public radio. "We have appropriate analyses for the occasion of takeovers of further banks," he said. "PZU has surplus capital that can be used for acqusitions … I think there will yet be opportunities for potential takeovers."