Changing hands
American firm GE Money will venture into new areas of the banking sector following its purchase of the so-called "Mini BPH," analysts predicted this month. The acquisition will make GE Money, which is part of the General Electric group, the fifth-largest bank in the domestic market, giving it the necessary breadth and expertise to expand its offering.
When Italian Unicredito merged with German bank HVB, in the largest merger in the history of European banking, the resulting entity, Unicredit, was forced to break up HVB's Polish subsidiary Bank BPH. Part of it merged with Unicredito subsidiary bank Pekao and other part, known as Mini BPH, was to be sold. On August 3, GE Money agreed to purchase 66 percent of Mini BPH from Unicredit for E625.5 (zł.2,389) million.
The takeover will give GE Money and Mini BPH a joint value of zł.21.3 billion. It will boost GE Money's outlet network by 200 branches and its client base by 500,000 people - GE Money currently has 1,418,000 clients.
The contract is still awaiting the approval of supervisory and anti-monopoly bodies. Approval for the deal is expected by the end of this year at the earliest.
Keeping them guessing
"Although GE Money will use the takeover to extend its offer, it is too early to speak of any concrete plans," said Aleksandra Kwiatkowska, spokesperson for GE Money Bank (GE Money's Polish consumer-banking arm). This has left analysts guessing what lies ahead for the firm.
Experts believed that GE Money, which specializes in loans and mortgages, will use the takeover strengthen its position in these markets and break into new areas. "The takeover will affect the market of the loans, especially mortgages and credit cards, where the bank will become the leading issuer, since 888,000 cards will add up with 519,000 of the BPH part," says Michał Macierzyński, an expert form the Bankier.pl financial portal.
Other strengths
BPH also has strengths in other areas that GE Money could capitalize on. "BPH has a strong investment-fund base," said Open Finance analyst Mateusz Ostrowski, "It's hard to say how many specialists will remain after the split, but BPH certainly does have the necessary know-how." He added that under a separate agreement GE Money also bought a 49-percent share in BPH TFI investment fund from another Unicredit subsidiary.
As for individual accounts, Bankier.pl's Macierzyński suggested that the price of the service to the customer may be considered high. Yet, it may offer a relatively high interest rate, said Macierzyński.
