Big acquisition on the Polish bank market

Polish banking sector has seen some big changes this year. Not long ago, BNP Paribas finished its merger with BGŻ. Alior made a deal with Bank BPH and took over a large part of its assets. But the biggest event of all in terms of mergers and acquisitions in Poland in 2016 will be the purchase of Bank Pekao shares by the state-owned PZU.

Bank Pekao is one of the biggest financial institutions in Poland and a strong brand recognizable by a vast majority Poles. It has assets in the amount of 37.9 billion PLN. The bank maintains account for almost five million Poles, has over 900 branches across the country and more than 1,700 ATMs. It is also the biggest player on the loan market. The financial institution is listed on Warsaw Stock Exchange. In other words, the purchase is certainly a huge reshuffle when it comes to the Polish banking sector.

The current owner of Bank Pekao is an Italian financial group UniCredit. The company announced it intends to sell all of its shares in Bank Pekao. 20 percent of the shares in the bank will go to Powszechny Zakład Ubezpieczeń (PZU). 12.8% of the shares will be purchased by Polski Fundusz Rozwoju (Polish Development Fund). The shares will be purchased for 123 PLN per share, which media experts regard as reasonable or even good. The acquisition will be performed in two stages.

Deputy Prime Minister Mateusz Morawiecki said he believes the purchase will strengthen Polish banking sector and Polish economy. He noted the transaction is being carried out very professionally. The negotiations lasted several months.

PZU believes the purchase will allow them to increase profits and return on equity. Polski Fundusz Rozwoju announced it hopes to reach a 10% return on the investment.

Unicredit informed the sale is a part of their strategy of strengthening the group’s financial situation. The Italian conglomerate was the owner of Bank Pekao for over 16 years.