BGZ ordered to raise zl. 1 billion additional capital

Banking inspectors have ordered state-owned bank BGZ to raise an additional zl. 1 billion ($247 million) of capital over the next two years, a government official said yesterday. Last year the government gave BGZ, and several other state-owned institutions, stakes in dominant telecoms firm TPSA, prompting periodic share price weakness on worries that the new owners would dump their shares to raise cash. "BGZ has already received zl. 600 million, including zl. 200 million in TPSA shares and [hotel chain] Orbis," Treasury Ministry official Agata Rowinska told a parliamentary committee, referring to last year's transfers. "It should get another zl. 500 million by June 30, 2004, and zl. 500 million in the following year," she added, without specifying where the cash would come from. BGZ has said the European Bank for Reconstruction and Development could take a stake. Currently 70% of the bank's stock is held by the Treasury and the remainder by independent banks. (Reuters; Parkiet, p. 4) J.K.