By Cary Springfield – cary.springfield@internationalbanker.com
State-controlled PZU SA, Poland’s largest insurer, is on a mission to win back the country’s banking sector from foreign ownership, particularly Eurozone ownership. The company has agreed to buy a 25.3-percent stake in Alior Bank SA, Poland’s 10th-largest bank by assets, and has indicated its plans to follow this acquisition up with the purchase of two additional banks. Its goal is to form one of the nation’s most substantial lending enterprises, a plan that has received government approval.
PZU SA purchased Alior shares for 89.25 zloty per share (1.63 billion zlotys in total, or 431 million USD) from Italy’s Carlo Tassara, a holding company belonging to French financier Romain Zaleski, the bank’s biggest single shareholder. Alior has a strong track record for growth, seeing its first-quarter net profits rise 33 percent to 91 million zlotys (25.5 million USD).
Poland’s current government is all for reducing foreign involvement in its banking sector, fearing that Eurozone member debt problems will spread to domestic financial operations. Treasury Minister Wlodzimierz Karpinski expressed his approval of the Alior deal in an emailed press statement. “After years of importing capital and know-how from foreign banks, it’s time for the ‘repolonization’ of the financial sector.” The Polish banking sector has a high degree of foreign ownership, partly because of asset sales to foreign entities during its transition to a market economy in the 1990s.
The plan for more Polish capital to be used to buy Polish financial institutions is the brainchild of conservative opposition party Law and Justice–the presidential candidate of which, Andrzej Duda, won the spring presidential election. Polish investors, who own approximately 60 percent of the domestic banking sector’s assets, have experienced limited success in gaining more; state-controlled PKO Bank Polski SA, Poland’s largest bank, did purchase the Nordic’s Nordea Bank AB’s Polish unit.
Poland’s low interest-rate environment makes the acquisition a profitable one for the PZU SA insurance company, which plans to keep its banking involvement separate from its insurance business. General Electric Co and Raiffeisen Bank International AG have expressed their intentions to sell their Polish banks, Bank BPH and Raiffeisen Polbank respectively, creating more opportunity for Polish investors to benefit from the success of the country’s financial sector. Raiffeisen Polbank boasts the largest number of assets on the Polish market, at 53.5 billion zloty, while Bank BPH has an impressive 31.6 billion zloty in assets. Alior, meanwhile, has 30.1 billion zloty in assets but more than 1,000 branches and 2.5 million customers nationwide after its purchase of a majority stake in Meritum Bank.
PZU SA’s CEO Andrzej Klesyk told reporters that PZU’s goal is to “create one of Poland’s top five lenders”. The Alior purchase is the “first step for us to consolidate the Polish banking industry”. Klesyk went on to indicate that Alior CEO Wojciech Sobieraj may in the future head the banking unit.
The deal still needs to win the approval of the Financial Supervision Authority and the UOKiK consumer protection office, but PZU SA has a much better chance of receiving regulatory approval than a foreign entity would.