Raiffeisen confirms Polish regulator threatening its voting rights at Polbank unit

By bne IntelliNews March 6, 2015

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Raiffeisen Bank International (RBI) has confirmed earlier reports that it is at loggerheads with the Polish financial regulator over plans to sell its Polish unit, and faces a threat that it could lose control of Polbank. 

The Polish Financial Market Authority (KNF) has "informed RBI about the initiation of administrative proceedings" that potentially "could result in a prohibition of exercising voting rights" at the Polish unit, RBI said in a supplement to a debt issue prospectus, PAP news agency reported on March 6.

The Austrian bank insists the "allegations are unsubstantiated and such proceedings ultimately shall be dismissed."

The regulator - which has regularly expressed its oppositon to further consolidation of the Polish banking sector over the past couple of years - has been infuriated in recent months by a series of foreign owners announcing that they plan to exit the country. 

After RBI said in February that it's looking to sell Polbank as part of a region-wide programme aimed at reducing risk-weighted assets, KNF was swift to complain that commitments made when the Austrians bought the bank in 2012 had still not been met.

RBI has regularly said it will honour its pledge to list Raiffeisen Polbank on the Warsaw Stock Exchange by 2016, and even said in recent weeks that it could accelerate the move.

Meanwhile, KNF insists that any buyer of the country's eighth-largest lender must have a rating to match RBI's. Moody's rates the parent Raiffeisen Zentralbank Österreich at 'Baa2', S&P at 'A-', and Fitch at 'A'. 

The regulator also says it would "prefer" a suitor not already present in Poland. KNF has made no secret that it would oppose further consolidation in the sector. However, that has not stopped speculation that some of the biggest players in Poland are keen to get their hands on the bank. Pekao, the country's second-largest lender owned by Italy's UniCredit Group, said it would be interested. Parkiet reported that Societe Generale and BNP Paribas could also be potential bidders. Those not currently present in Poland and mentioned as candidates to take over Polbank include Hungary's OTP Bank and Austria's Erste Group.

The conditions placed on RBI mirror those imposed on GE late last year when it raised KNF's ire by putting BPH Bank up for sale. The sale of the US group's local unit has now been put on hold because of the surge of the Swiss franc, which is causing problems for its custmers who took out Swiss franc loans. Polbank also has a hefty stock of Swiss franc mortgages.

KNF has been pushing for banks to take a sizable hit to help borrowers with the sharp currency shift, which raises their monthly installments dramatically. The government has said it wants to avoid large losses for lenders. However, any deals to sell Polish banks are unlikely to move forward until Warsaw's plans in that regard are clarified.

Italy’s Carlo Tassara group is interested in selling its stake in Alior Bank. The tiny FM Bank PBOP is also up for sale after its owners at the Abris private equity outfit got into a fight with KNF. The regulator blocked Abris' voting rights last year. 

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