BRE Bank's reported interest in taking over Fortis Bank Polska would allow it to bulk up its retail banking assets, its newest target market. But it could also herald a gradual paring of Commerzbank's strategic 50% stake in BRE, analysts said.
For the past year, Polish and German markets have been rife with as-yet unsubstantiated rumors that Commerzbank's position in BRE was up for grabs, amid worries that both banks' financial footings were too precarious to remain close partners. Commerzbank had announced plans to cut its staff this year. And BRE has put itself in a number of financial tight spots, a result of aggressive investments, such as its shares in ailing conglomerate Elektrim.
Analysts said that in the expected merger, BRE would likely issue new shares to give to the parent company Fortis, instead of paying cash. That would result in a dilution of Commerzbank's share in BRE.
Robert Sobieraj, a banking analyst at Bank Handlowy, said he expected that move to be the first step in the German bank's gradual withdrawal from the Polish market.
"I think Commerzbank is withdrawing from the (Polish market)," he said. "I think that this means that Fortis may buy shares (in BRE). One investor will replace another."
BRE, Fortis and Commerzbank declined to comment on any aspect of a potential merger.
But an individual close to Commerzbank said: "That Commerzbank in no longer interested in Poland is nonsense."
The source's comment differs sharply from those of Warsaw-based analysts.
"For Commerzbank, BRE Bank is not part of its core business," said Marcin Materna, a banking analyst at BIG Bank Gdański. He added that the German bank is more of a financial investor than a strategic investor because it's "not as active."
Whether or not their predictions come to pass, analysts said that Fortis Bank Polska's operations would dovetail with BRE's.
"I would say it's a good move; it's what would be expected," Materna said.
He explained that the merger would agree with BRE's stated business plan to beef up its retail assets, the sub-sector that many banks now consider the next financial frontier in Poland.
BRE might be spearheading the move.
"I think it's in line with the expectations of (Chief Executive Officer Wojciech) Kostrzewa," Sobieraj said.
Also, if the merger goes through, BRE could find itself more attractive to other banks, such as Bank Przewysłowo-Handlowy PBK and Bank Pekao.
"BRE Bank is a bigger option for bigger banks," Materna said.
He added that the banks' silence spoke volumes.
"They didn't deny it, so there's some truth to it," he said.
