Polish lender Alior Bank is in talks to buy BPH Bank from General Electric, industry sources claimed on March 7.
State-controlled insurer PZU, the biggest shareholder in Alior, has been nominated as the leader of a reinvigorated effort to “repolonise” the Polish banking sector. After efforts late last year to buy the lender, PZU now appears back as a favourite to buy BPH, which the US group has been trying to offlaod for some time as part of a global pullback from banking.
"Alior plans the bank acquisition transaction during the second or third quarter. The plan assumes that Alior will conduct a rights issue to raise money both for the bank and to strengthen its own capital position," a source “familiar with the matter” told Reuters. Another unnamed source suggests PZU could buy BPH to sell it to Alior.
PZU, which said last year it pulled out from talks to buy GE’s local unit, is now reported to have revived its interest in building a banking group. “PZU should get interested in banking activity," Treasury Minister Dawid Jackiewicz told local media in late February. "The capital [PZU has should be] invested in banking in order to strengthen Polish capital in the sector," the official insisted.
Polish media has speculated GE would likely seek to take advantage of the renewed push, after struggling to offload BPH for some time due to the uncertainty overhanging the Polish banking sector. The US company is reported to have halted talks with other potential buyers to focus on carrying out the deal with PZU.
GE pulled off a similar feat in 2014, when it unloaded its Hungarian unit Budapest Bank to the Hungarian state. PiS has made no secret of its admiration for the nationalist and populist Fidesz government in Budapest, and is copying several of its policies.
GE has 87% stake in BPH Bank, worth some PLN2.2bn (€510mn). Transactions in the banking segment in Poland have been few and far between lately. Banks have recently begun paying a sectoral tax and were forced to increase payments in the Bank Guarantee Fund, another fund set up to help distressed borrowers, as well as to cover for deposits of failed SK Bank. On top of these burdens, there looms PiS‘ promise to enact a law allowing CHF borrowers to convert their mortgage loans into the Polish zloty – at a cost possibly running into tens of billions.
The push from PZU to build a banking group would also likely earn the blessing of the regulator. Poland’s financial market regulator has said M&A in banking should better be carried out by those from outside the sector, in order to prevent further consolidation.
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