Bank Gdanski prepares for WSE issue
But selling the bank is not going to be an easy task. "Investors have a feeling there's too many banks (on the Warsaw Stock Exchange)," said Andrzej Nowaczek, research analyst at Wood & Co. "The market capitalization of banks is too large, the more banks you have the more difficult it is to sell them."
That's why the Finance Ministry is looking at selling the bank by installments or through an international share issue, he said. Bank privatization has generally involved share sales to strategic investors or public offerings on the stock exchange.
The ministry is looking for ways to attract new investors, said Miroslaw Bojanczyk, deputy director of banking and finance at the Finance Ministry. The ministry is still waiting for approval from the Council of Ministers, he said.
Hubert Janiszewski, director of HSBC Investment Banking, doesn't see the high banking capitalization as a deterrent to investment. "No investor has lost any money," he said. Said Michael Wheelhouse, banking analyst at London-based Nomura Research Institute: "Investors are still there." But Polish banking privatizations have always been unsuccessful, he said.
The ministry is planning to sell 33% of Bank Gdanski to domestic investors, 33% to international investors and 4% to employees. The State Treasury will retain a 30% stake. The international tranche may be offered through a Global Depository Receipt (GDR) issue quoted on the London and Luxembourg stock exchanges.
The Finance Ministry "is pushing very strongly the double IPO," said Stanislas Popow, director of Bankers Trust Company. But it still remains unclear as to how much of the bank will be sold to foreign investors. The Securities Commission (KPW) only approved 5% of existing shares in construction company Mostostal-Export for its American Depository Receipt (ADR) issue. There has been pressure from the Finance Ministry on the Securities Commission to make sure the Bank Gdanski international issue is larger.
"If there is only 5%, it's a non-starter," Popow said. The domestic tranche will be offered in an initial public offering through the Warsaw Stock Exchange.
Miroslaw Andrysiak, analyst with PKO BP brokerage house, said that if the ministry uses the same sales tactic of offering a tax deduction to investors as it did in the Bank Przemyslowo-Handlowy (BPH) issue, this may increase domestic investor interest. Also if share price is lower than average bank p/e ratio of 5, "it could be a profitable investment," he said.
When BPH was privatized earlier this year during a bear market, underwriters picked up 40% of the offering. BPH's p/e ratio was 4.53 on Sept. 15 based on 1994 earnings of zl. 203 million ($82.2), up 163% in nominal terms from the previous year. Bank Gdanski's 1994 net profits were zl. 95 million ($38 million) up 102% in nominal terms from the previous year.
That's why the Finance Ministry is looking at selling the bank by installments or through an international share issue, he said. Bank privatization has generally involved share sales to strategic investors or public offerings on the stock exchange.
The ministry is looking for ways to attract new investors, said Miroslaw Bojanczyk, deputy director of banking and finance at the Finance Ministry. The ministry is still waiting for approval from the Council of Ministers, he said.
Hubert Janiszewski, director of HSBC Investment Banking, doesn't see the high banking capitalization as a deterrent to investment. "No investor has lost any money," he said. Said Michael Wheelhouse, banking analyst at London-based Nomura Research Institute: "Investors are still there." But Polish banking privatizations have always been unsuccessful, he said.
The ministry is planning to sell 33% of Bank Gdanski to domestic investors, 33% to international investors and 4% to employees. The State Treasury will retain a 30% stake. The international tranche may be offered through a Global Depository Receipt (GDR) issue quoted on the London and Luxembourg stock exchanges.
The Finance Ministry "is pushing very strongly the double IPO," said Stanislas Popow, director of Bankers Trust Company. But it still remains unclear as to how much of the bank will be sold to foreign investors. The Securities Commission (KPW) only approved 5% of existing shares in construction company Mostostal-Export for its American Depository Receipt (ADR) issue. There has been pressure from the Finance Ministry on the Securities Commission to make sure the Bank Gdanski international issue is larger.
"If there is only 5%, it's a non-starter," Popow said. The domestic tranche will be offered in an initial public offering through the Warsaw Stock Exchange.
Miroslaw Andrysiak, analyst with PKO BP brokerage house, said that if the ministry uses the same sales tactic of offering a tax deduction to investors as it did in the Bank Przemyslowo-Handlowy (BPH) issue, this may increase domestic investor interest. Also if share price is lower than average bank p/e ratio of 5, "it could be a profitable investment," he said.
When BPH was privatized earlier this year during a bear market, underwriters picked up 40% of the offering. BPH's p/e ratio was 4.53 on Sept. 15 based on 1994 earnings of zl. 203 million ($82.2), up 163% in nominal terms from the previous year. Bank Gdanski's 1994 net profits were zl. 95 million ($38 million) up 102% in nominal terms from the previous year.
