BGŻ shareholders say no to raising banks capital

The shareholders of BGŻ have again failed to raise the banks capital. The issue of shares worth zł. 200-300 million for the European Bank for Reconstruction and Development (EBOR) would give it 20% in the bank, was blocked on Sunday by the cooperative banks. These minor shareholders control just 30% of the votes, yet according to the memorandum of association, an 80% majority is required to make crucial decisions. "We disapprove of the 20% stake for EBOR but we may accept a smaller one. We may accept an issue that would let us keep 26% of the shares," said Paweł Siano, president of the Polish Cooperative Bank, the biggest of the minor shareholders. Yet, their proposal of limited issue was not accepted by the State Treasury, that holds the biggest stake in BGŻ. The bank desperately needs to find new funds, as its own capital makes it unable to expand the activity and overcome the current crisis - BGŻ recorded net losses of zł. 339.2 million last year. Furthermore, raising the capital by zł. 500 million till June 2004 and another zł. 500 million within the following year, was demanded by the banks supervisors as BGŻ's capital was too low, relative to its credit action. (Gazeta Wyborcza, p. 23) M.K.