Polish bank M&A still on pause says PZU

By bne IntelliNews November 10, 2015

Talks on Polish bank M&A remains on pause as potential sellers await policy decisions from the new government, the CEO of PZU - annointed to build a new domestically-owned banking giant by the outgoing administration - said.

The Warsaw-listed insurer is not currently conduction talks on acquisitions because bank owners are waiting to know more about planned regulations to affect the banking sector, Andrzej Klesyk told reporters on November 10.

PZU spent late summer looking to buy banks in a drive to become an important Polish-owned player in the foreign-dominated banking sector. Banks are however wary of new regulations the new government of Law and Justice (PiS) has promised that will affect Polish lenders, he said. PZU failed to agree a valuation with at least one bank ahead of the October 25 election.

A planned tax on banks and a law allowing conversion of FX mortgages to the Polish zloty are especially likely to impact valuations. Before the election, PiS wanted a 0.39% tax on bank assets that the party hoped would add estimated PL5bn-6bn (€1.2bn-1.4bn) to the budget. The cost of forex loan conversion has been estimated at at least PLN30bn.  

"The transactions market is to some extent in standstill - everybody is waiting for what the new government will come up with when it comes to the banking tax and regulations regarding Swiss franc borrowers," Klesyk told PAP. He reiterated, however, PZU is still “willing” to buy banks.

PZU took over Alior Bank in May. Since then, the company has been reported to be in talks with GE Capital about taking over its Polish unit Bank BPH and with Raiffeisen Bank International (RBI) about buying Raiffeisen Polbank. However, it was also reported PZU and GE Capital could not agree on price. 

Meanwhile, the sale of Polbank has stalled over risks attached to its portfolio of forex loans. RBI’s CEO Karl Sevelda said in late October he will restart efforts to sell Polbank as soon as there is clarity on what the government intends to do on forex loans. 

 

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