PZU pulls out of talks on buying GE's Polish bank

By bne IntelliNews October 9, 2015

bne IntelliNews -

 

PZU is no longer in talks with GE Capital over the acquisiton of the US giant's local banking arm BPH, a representative for the Polish state-controlled insurance company said on October 8.

Reports suggest negotiations have broken down over a failure to agree on price. Huge uncertainty currently reigns over the Polish banking sector, with the populist PiS, which is leading opinion polls ahead of general elections later this month, threatening to hit lenders by converting forex loans and imposing a  bank tax.

Those issues have all but halted M&A in the banking sector this year. The Polish sector was previously seen as offering perhaps the best potential in Europe; however, the uncertainty makes valuations highly problematic.

"I can currently confirm that we are not in talks over [Bank BPH]," PZU spokesman Michal Witkowski told Reuters. His statement comes less than two weeks after PZU’s CEO Andrzej Klesyk said it was “possible” PZU would buy the bank by the end of 2015.

Citing unnamed sources, Puls Biznesu reported that price was the ultimate factor that saw the talks break down. The news pushed BPH’s share price in Warsaw down nearly 9%; PZU's stock gained almost 3%.

Following its takeover of Alior in May, PZU’s representatives have repeatedly said they were pursuing more takeovers in the banking sector as part of a strategy to build a top-five Polish lender. The strategy has the blessing of the Polish government, which is suddenly keen to increase local ownership.

Bank BPH has typically been mentioned by PZU as the nearest takeover target, after another possible buy, Raiffeisen Bank International's Polish unit Raiffeisen Polbank, was reportedly withdrawn from the market in July. The sale of Polbank is believed to have run into problems over the risk attached to its forex loans portfolio.

Bank BPH is also strongly exposed to forex loans; they make up around half of its loan portfolio. However, GE had suggested it could be preapred to split the foreign-currency assets from the rest of the bank in order to push through a sale.

Related Articles

UK demands for EU reform provoke fury in Visegrad

bne IntelliNews - The Visegrad states raised a chorus of objection on November 10 as the UK prime minister demanded his country's welfare system be allowed to discriminate between EU citizens. The ... more

Poland's Law and Justice nominates hardline cabinet

Wojciech Kość in Warsaw -   Poland’s Law and Justice (PiS) party, which won an outright majority in the parliamentary elections on October 25, has announced a hardline ... more

Kaczynski expected to appoint hardline cabinet

Wojciech Kość in Warsaw -   The Law and Justice (PiS) party, which won an outright ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss