Bidders to place final BPH offers
Germany's Bayerische Vereinsbank, Allied Irish Bank, the Netherlands' ABN Amro and Sweden's Skandinaviska Enskilda Banken (S-E-Banken) beat out 11 bidders to make the short-list for BPH. All four have already completed due diligence.
"The short-list looks very interesting," said Christine Bogdanowicz-Bindert, a supervisory board member at BPH. "Any of the investors would be an interesting solution for the bank."
The final decision, however, is up to the bank's owner - the Treasury Ministry.
Out of the four banks, three already have a presence in Poland. AIB holds 61% in Wielkopolski Bank Kredytowy (WBK), while Bayerische Vereinsbank and ABN Amro operate local branches. S-E-Banken, although a newcomer, is well known for its unsuccessful bid for Polski Bank Rozwoju (PBR). It lost the bank in a public bidding war to domestic contender Bank Rozwoju Eksportu (BRE).
Analysts point out that S-E-Banken has illustrated that it is determined to enter the Polish market and therefore may offer an attractive price for BPH. They also said that the Swedish group may be the easiest option to digest politically.
"BPH's board is afraid of those investors who are already present on the Polish market," said a source close to the deal. "And somebody completely new might be the best choice."
But the ultimate decision depends on what criteria the Treasury Ministry uses. Foreign investors often use two approaches when taking over a bank here, said Pawel Szymanski, an analyst with London-based Schroders. The first is to dig in and improve the bank's efficiency; the second is to make a quick grab for market share.
AIB has used the first approach with WBK, he said, while ING Barings has employed the second with Bank Slaski by investing heavily and quickly opening up new branches to expand the Polish bank's retail presence.
"But ING can afford it," Szymanski said.
These two approaches are reflected in both banks' financial performance. At the end of 1997, Slaski reported a return on equity (ROE) of 16%, while WBK's was a strong 21%. At the end of 1998, WBK expects to achieve a ROE of 27%, while Slaski will be lower at 20%.
BPH is the seventh largest bank in Poland with total assets of zl. 10 billion ($2.9 billion). At the end of 1997, the bank posted a net profit of zl. 314 million ($91 million). BPH is especially strong in southern Poland and has 180 branches.
The sale of 41% will leave the state treasury with 5.67% of the bank. BPH's other major shareholders are the European Bank for Reconstruction and Development (EBRD) with 15.06% and ING Barings with 12.6%. The remainder is traded on the Warsaw Stock Exchange (WSE).
The winner of the 41% stake will also be able to buy the EBRD's shares, giving it a majority stake.
"The short-list looks very interesting," said Christine Bogdanowicz-Bindert, a supervisory board member at BPH. "Any of the investors would be an interesting solution for the bank."
The final decision, however, is up to the bank's owner - the Treasury Ministry.
Out of the four banks, three already have a presence in Poland. AIB holds 61% in Wielkopolski Bank Kredytowy (WBK), while Bayerische Vereinsbank and ABN Amro operate local branches. S-E-Banken, although a newcomer, is well known for its unsuccessful bid for Polski Bank Rozwoju (PBR). It lost the bank in a public bidding war to domestic contender Bank Rozwoju Eksportu (BRE).
Analysts point out that S-E-Banken has illustrated that it is determined to enter the Polish market and therefore may offer an attractive price for BPH. They also said that the Swedish group may be the easiest option to digest politically.
"BPH's board is afraid of those investors who are already present on the Polish market," said a source close to the deal. "And somebody completely new might be the best choice."
But the ultimate decision depends on what criteria the Treasury Ministry uses. Foreign investors often use two approaches when taking over a bank here, said Pawel Szymanski, an analyst with London-based Schroders. The first is to dig in and improve the bank's efficiency; the second is to make a quick grab for market share.
AIB has used the first approach with WBK, he said, while ING Barings has employed the second with Bank Slaski by investing heavily and quickly opening up new branches to expand the Polish bank's retail presence.
"But ING can afford it," Szymanski said.
These two approaches are reflected in both banks' financial performance. At the end of 1997, Slaski reported a return on equity (ROE) of 16%, while WBK's was a strong 21%. At the end of 1998, WBK expects to achieve a ROE of 27%, while Slaski will be lower at 20%.
BPH is the seventh largest bank in Poland with total assets of zl. 10 billion ($2.9 billion). At the end of 1997, the bank posted a net profit of zl. 314 million ($91 million). BPH is especially strong in southern Poland and has 180 branches.
The sale of 41% will leave the state treasury with 5.67% of the bank. BPH's other major shareholders are the European Bank for Reconstruction and Development (EBRD) with 15.06% and ING Barings with 12.6%. The remainder is traded on the Warsaw Stock Exchange (WSE).
The winner of the 41% stake will also be able to buy the EBRD's shares, giving it a majority stake.
