Building a banking sector giant
If the merger is finalized, it will bring into existence the biggest player in Eastern Europe. Such a transaction would cause a major reshuffle in the Polish banking sector, possibly resulting in a merger of Pekao SA and BPH - second and third biggest Polish banks respectively. UniCredito owns 52.9 percent of Pekao SA while HVB holds 71.2 percent of BPH's shares. The assets of the newly created institution would amount to zł.113 billion, surpassing by zł.25 billion the assets of PKO BP - currently the biggest bank in Poland. Together Pekao SA and BPH employ 25,000 people in 1,200 establishments.
Pekao SA and BPH control many financial institutions that now compete with each other. After the possible merger the new structure would encompass Pioneer Pekao, the biggest investment fund, and the much smaller BPH TFI, such brokerage houses as CDM Pekao, BPH and CAIB Securities, as well as BPH and PKO leasing institutions. Both banks are engaged in open pension funds; BPH has got a minority share in Commercial Union whereas Pekao SA owns Pekao Pionieer.
"The total market share of the giant would amount to almost 50 percent. We can see such a concentration only in the Czech Republic but it is an oligopolistic market. The problem is BPH and Pekao SA have totally different corporate policies. The merger would also cause a major disorientation among customers and, as the branches would have to be joined; it would surely result in layoffs," said Dariusz Górski, banking sector analyst with Deutsche Bank.
Neither BPH nor Pekao SA were willing to comment.
Pekao SA and BPH control many financial institutions that now compete with each other. After the possible merger the new structure would encompass Pioneer Pekao, the biggest investment fund, and the much smaller BPH TFI, such brokerage houses as CDM Pekao, BPH and CAIB Securities, as well as BPH and PKO leasing institutions. Both banks are engaged in open pension funds; BPH has got a minority share in Commercial Union whereas Pekao SA owns Pekao Pionieer.
"The total market share of the giant would amount to almost 50 percent. We can see such a concentration only in the Czech Republic but it is an oligopolistic market. The problem is BPH and Pekao SA have totally different corporate policies. The merger would also cause a major disorientation among customers and, as the branches would have to be joined; it would surely result in layoffs," said Dariusz Górski, banking sector analyst with Deutsche Bank.
Neither BPH nor Pekao SA were willing to comment.
