BPH-PBK merger with BRE not in the cards - yet

Bank Przemysłowo-Handlowy PBK's (BPH-PBK) management is steering clear of any acquisitions in the near term, but there is still a possibility that its parent company might consider a merger with BRE Bank, Józef Wancer, BPH-PBK's president, told the WBJ last week. "Of course, if something happens outside of Poland (with HVB Group) because of globalization, just like how BPH and PBH were merged, we will be advised (who to merge with)," Wancer said. He added that a BPH-PBK merger was out of his hands. BPH PBK was formed when Bank Przemysłowo-Handlowy and Powszechny Bank Kredytowy merged last year, following the consolidation of parent companies Bank Austria and Bayerische Hypo- und Vereinsbank of Germany (HVB Group). BPH PBK said the companies' operations would be fully merged next year. At the same time, analysts said the firm's management in Poland was negotiating the purchase of BRE, whose share price has been pummeled by wary investors. Commerzbank, BRE's majority owner, is also trimming costs and laying off staff. But Wancer was quick to counter the rumors. "No work is being done here," he said. He added that "if we read tomorrow that something happens in Western Europe," he has no control over it. BRE said that it is not looking for a buyer.

Analysts discounted the two banks' remarks about a potential merger. "That is what they said, but it doesn't mean anything," said Artur Szeski, a banking analyst at CDM Pekao. He said the two banks would never make their intentions known ahead of time, even if a merger made sense. Analysts said they didn't expect the banks to consolidate anytime soon. "I don't believe it will happen in the short term," Szeski said. "BPH PBK has to deal with its (recent) merger. That is the major task at the moment." Wancer said the bank is working to implement its IT system in all BPH PBK branches. It will also have to lay off as many as 2,300 employees. Nevertheless, analysts said a marriage between BPH PBK and BRE makes sense since the two institutions are compatible, and the banking sector is still too crowded. "There are potential synergies," Szeski said. BRE boasts Poland's most active investment banking arm - something that BPH PBK lacks. And the two banks' strong retail banking operations would create an industry powerhouse for regional customers. Whatever the benefits of a merger, Wancer considers banking industry rumors to be business as usual. "I was told that these sorts of discussions have been going on for the past two or three years, if not longer," he said. "So every once in a while, someone says this is going to happen. Officially, I can tell you there are no discussions on that subject whatsoever. No work and no preparations are being done."