Austrian banking group Raiffeisen Bank International (RBI) on July 6 postponed the initial public offering (IPO) of Polish unit Raiffeisen Bank Polska citing “insufficient interest”.

It was, however, hardly a bombshell announcement as speculation that the IPO would flop has been rife almost since the day RBI announced the offering. The bank was actually pushed to do so by Polish financial market regulator KNF despite the unfavourable market environment. Pricing conditions on the Polish banking market remain poor as lenders continue to face pressure from the government to unwind huge Swiss franc-mortgage loan portfolios. Some half a million Poles have foreign-currency mortgages.

Raiffeisen Bank Polska, sometimes referred to as Raiffeisen Polbank, was required to sell a 15% stake in its business in return for KNF’s consent in 2012 for the Austrian parent bank's acquisition of the unit from Greek lender Eurobank.

However, speculation lately emerged that investors were seeking a huge discount on Raiffeisen Bank Polska shares in the offering. “There is a small subscription for 0.6 [of book value]. The IPO will likely be suspended or cancelled," an unnamed source told Reuters shortly before book building was due to close on July 6.

The postponement was “due to an insufficient level of interest in the offer on terms that meet the parameters of RBI’s commitment to [the KNF] to float shares of Raiffeisen Bank Polska on the Warsaw Stock Exchange,” RBI said in a statement.

An RBI spokeswoman was quoted by Reuters as saying the listing was attempted in good faith. "We took this IPO very seriously. We spoke to more than 100 investors. We sent more than 350 research reports. We carried out a very detailed investor analysis beforehand. And we completed roadshows in Paris and Warsaw," she reportedly said.

No new timetable for the offering was yet available. According to rumours on the market, RBI may now try to sell its Polish unit, with state-controlled bank Pekao reportedly interested.

RBI also said it is in discussions with the Polish regulator on how to proceed following the IPO postponement. The KNF said it was “concerned” about the Austrian bank’s decision to postpone the float as it meant the bank had not carried out a “key commitment” it had made to the regulator.

“The KNF will seek to find a full explanation of the circumstances that led the investor to not carry out the commitment it made, why such circumstances occurred and whether they were or were not independent of the investor,” the KNF said in a statement.