Analysts criticize plan to sell off PKO BP
No queues yet: All Poles will be able to buy into PKO BP under current plans, but analysts are frowning on the idea.
Market analysts criticized the government's plan last week to restrict the sale of 30% of the country's largest retail bank, Powszechna Kasa Oszczednosci Bank Polski (PKO BP), to Polish citizens when the bank is sold in an initial public offering (IPO) in the second half of 2002. They also said the plan to retain 50% plus one share might keep potential investors sidelined.
According to Treasury Minister Aldona Kamela-Sowinska, the 30% sale will go ahead in 2004-2005. Another 15% is earmarked for the bank's employees.
"It is the wrong way to sell this (one) of all Polish banks," said Grzegorz Zawada, head of research at Erste Securities in Warsaw. "From a purely business perspective, a sale to a strategic foreign branch investor makes the most sense."
Critics worried that this method of privatization would not bring in enough capital to upgrade the bank to meet increasing competition in the banking sector. "The bank needs large-scale restructuring and capital investment and that can only come from the big international players," Zawada said. President Henryka Pieronkiewicz said last week the bank needs zl. 1.5 billion-zl. 2 billion ($333 million-$476 million) over the next two to three years, much more than will be available from other sources in the foreseeable future.
Furthermore, the retention of state control over the bank is unlikely to induce institutional investors to take part in the sale, analysts said. They bemoaned the contradictory assumptions behind the privatization strategy, saying the government wants both control of the bank and private capital. "It wants to have its cake and eat it too, and it just doesn't work that way," said a leading analyst.
Staff writer
