Bank PKO BP discloses 2003-2005 development strategy

Poland's savings giant PKO Bank Polski yesterday unveiled a medium-term strategy to cement its leadership of central Europe's top market and set the stage for its partial privatization next year. Under the 2003-2005 expansion strategy, PKO wants to lower its cost-to-income ratio - a key profitability measure - to below 60% from the present 63% and keep its return on equity at above 20%. Thanks to its restructuring PKO, which controls nearly a third of retail deposits and runs 4.6 million personal accounts, hopes to raise its net profit to zl. 2.0 billion ($509 million) in 2005, up from the zl. 1.1 billion-zl. 1.2 billion planned for 2002. That would keep it largely in line with the sector average but much behind rivals Bank Pekao and Bank Zachodni, which are expected to bring their cost-to-income measures below 50% and 60% respectively next year. Poland's left-wing government, PKO's sole owner, is expected to launch a tender in the next few days to pick a privatization adviser. The cabinet wants to float a small stake on the Warsaw bourse in 2003 while keeping strategic control over the bank. (Puls Biznesu, p. 9; Reuters) J.K.