BZ expands network through acquistion
The decision comes at a crucial moment for Polish banks faced with the prospect of "privatize yourself or be merged" (WBJ Oct. 13-19), and could be seen as a move to buy some time from the Finance Ministry for finding a strategic investor.
Tadeusz Gluszczuk, chairman of Bank Zachodni's board, said that if BZ goes ahead with the acquisition it will need around a year to absorb Rolbank's zl. 80 million ($32.65 million) in losses and integrate it into Zachodni's branch network, meaning that the bank would be privatized in 1997.
But Finance Minister Grzegorz Kolodko said earlier in the month that the ministry is working on a plan calling for the privatization of most of the banking sector, including Bank Zachodni, by the end of 1996 - the deadline set by western governments which chipped in around $600 million to a bank privatization fund.
There are some doubts, however, concerning the ministry's reaction to Gluszczuk's statements. "The ministry has a policy of trying to let these managers manage their own banks," said an adviser to the Finance Ministry on the banking sector who requested anonymity. "This could be seen as a move to buy some time, but I don't know how the ministry will look at it."
The deal would enable Bank Zachodni to extend its client base to northern and eastern Poland by picking up Rolbank's branches in cities like Lodz, Bialystok, Lublin, Elblag, Przemysl, and Suwalki.
"Extending our network is recognized as a priority in strengthening the bank and its customer service," Gluszczuk said. "The purchase of Rolbank signifies for Bank Zachodni the entrance into the entire Polish market, increasing the bank's efficiency" through economies of scale.
Bank Zachodni has been one of the most active in the Polish market, having earlier bought out Poznan-based Market Bank SA, Warszawski Bank Zachodni SA and Glogowski Bank Gospodarczy SA.
One condition set forth by BZ is that the depositors not covered by the Bank Guarantee Fund (those with deposits in excess of ECU 3,000 or $3,900) agree to keep their deposits in the bank for a period of five years at BZ's current one-month deposit rates of 16% annually. Of Rolbank's zl. 170 million ($69 million) in deposits, approximately zl. 80 million ($33 million) would be covered by the Bank Guarantee fund. Krzysztof Kuczynski, Rolbank's board chairman, said that around 90% of depositors had agreed to the terms.
But some questioned the timing of the acquisition, calling it a case of misplaced priorities. "On the one hand it could be justified by saying if you're going to go to the market, why not become national," said the ministry advisor. "But the first priority should be privatization, and you shouldn't be building a franchise when you're not private yet."
Tadeusz Gluszczuk, chairman of Bank Zachodni's board, said that if BZ goes ahead with the acquisition it will need around a year to absorb Rolbank's zl. 80 million ($32.65 million) in losses and integrate it into Zachodni's branch network, meaning that the bank would be privatized in 1997.
But Finance Minister Grzegorz Kolodko said earlier in the month that the ministry is working on a plan calling for the privatization of most of the banking sector, including Bank Zachodni, by the end of 1996 - the deadline set by western governments which chipped in around $600 million to a bank privatization fund.
There are some doubts, however, concerning the ministry's reaction to Gluszczuk's statements. "The ministry has a policy of trying to let these managers manage their own banks," said an adviser to the Finance Ministry on the banking sector who requested anonymity. "This could be seen as a move to buy some time, but I don't know how the ministry will look at it."
The deal would enable Bank Zachodni to extend its client base to northern and eastern Poland by picking up Rolbank's branches in cities like Lodz, Bialystok, Lublin, Elblag, Przemysl, and Suwalki.
"Extending our network is recognized as a priority in strengthening the bank and its customer service," Gluszczuk said. "The purchase of Rolbank signifies for Bank Zachodni the entrance into the entire Polish market, increasing the bank's efficiency" through economies of scale.
Bank Zachodni has been one of the most active in the Polish market, having earlier bought out Poznan-based Market Bank SA, Warszawski Bank Zachodni SA and Glogowski Bank Gospodarczy SA.
One condition set forth by BZ is that the depositors not covered by the Bank Guarantee Fund (those with deposits in excess of ECU 3,000 or $3,900) agree to keep their deposits in the bank for a period of five years at BZ's current one-month deposit rates of 16% annually. Of Rolbank's zl. 170 million ($69 million) in deposits, approximately zl. 80 million ($33 million) would be covered by the Bank Guarantee fund. Krzysztof Kuczynski, Rolbank's board chairman, said that around 90% of depositors had agreed to the terms.
But some questioned the timing of the acquisition, calling it a case of misplaced priorities. "On the one hand it could be justified by saying if you're going to go to the market, why not become national," said the ministry advisor. "But the first priority should be privatization, and you shouldn't be building a franchise when you're not private yet."
