Dutch agribank close to BRP takeover
"Poland is a very agricultural country, and Rabobank sees it as an important part of their strategy," said Jan Laskowski, deputy president of BRP's management board. "It's a frank strategic decision to be the single-most important bank in a specific market." The deal will depend on obtaining approval from the National Bank of Poland for the deal, as well as receiving a foreign exchange license.
While its core business is agriculture, Rabobank hopes as a result of the deal to compete with major international banks active in Poland.
"We'll be able to do bigger and better things - like move into trade finance and foreign exchange transactions," Laskowski said. "We're not going to be an ING or a Citibank, but we'll definitely be competing for some of their clients."
Other banking specialists said that Rabo came to give some of its traditional rivals a run for their money.
"People think it's just a farm cooperative bank, but they're a very serious and important player," said Gerald Thompson, a consultant with regional investment bank Crimson Capital.
It may be difficult, considering Holland's competitive banking market, Thompson said. "They're coming here partly to keep up with ABN-AMRO and ING," Thompson said. "They're not as specialized as they might seem."
Nevertheless, Thompson noted that Rabo has one major advantage over its competitors, namely, a AAA short and long-term debt rating.
Rabobank will be coming into the Polish market by acquiring a majority stake in BRP through a new share issue. Laskowski said the deal would double the bank's share capital, which currently is zl. 17 million ($7 million). Rabobank does not plan to make changes in BRP's management board, although the bank will be renamed Rabo-BRP Bank Poland SA.
BRP was established in 1993 on the initiative of the European Union Counterpart Fund to support the private agribusiness sector in Poland. The current shareholders in the bank include the European Fund for the Development of the Polish Countryside (45.9%), the Polish-American Enterprise Fund (20%), the Farmers' Social Security Contribution Fund (14.7%), Agricultural Ownership Agency of the State Treasury (8.8%), Agency of the Agricultural Market (6.8%) and Rolimpex SA (3.8%).
The bank showed a net profit in 1994 of zl. 2.1 million ($850,000), with a 5% return on assets but only an 11.5% return on equity. The bank, with very stringent lending policies, has no non-performing loans, and won Gazeta Bankowa's award for the best loan portfolio in 1994. Some of its clients include Zielona Budka, Rolimpex and Animex.
During the past few years, Polish cooperative banks have experienced tough times, with many going bankrupt under the pressure of bad loan portfolios. The dominant figure in the agricultural banking sector is Bank Gospodarki Zywnosciowej, Poland's largest bank in terms of capital (zl. 1.5 billion - $612 million) and widely reported to be the biggest loss maker.
Rabobank plans to assist some of the regional banks with advice and know-how on operating in the agricultural sector, as well as with its advisors. Rabo's advisory arm, RAIS, is also working with the World Bank on the restructuring of BGZ.
"This is a very volatile sector, but we were able to avoid a lot of the mistakes made by other banks in the agricultural sector in the early '90s," Laskowski said. "As they say, you learn from your mistakes."
While its core business is agriculture, Rabobank hopes as a result of the deal to compete with major international banks active in Poland.
"We'll be able to do bigger and better things - like move into trade finance and foreign exchange transactions," Laskowski said. "We're not going to be an ING or a Citibank, but we'll definitely be competing for some of their clients."
Other banking specialists said that Rabo came to give some of its traditional rivals a run for their money.
"People think it's just a farm cooperative bank, but they're a very serious and important player," said Gerald Thompson, a consultant with regional investment bank Crimson Capital.
It may be difficult, considering Holland's competitive banking market, Thompson said. "They're coming here partly to keep up with ABN-AMRO and ING," Thompson said. "They're not as specialized as they might seem."
Nevertheless, Thompson noted that Rabo has one major advantage over its competitors, namely, a AAA short and long-term debt rating.
Rabobank will be coming into the Polish market by acquiring a majority stake in BRP through a new share issue. Laskowski said the deal would double the bank's share capital, which currently is zl. 17 million ($7 million). Rabobank does not plan to make changes in BRP's management board, although the bank will be renamed Rabo-BRP Bank Poland SA.
BRP was established in 1993 on the initiative of the European Union Counterpart Fund to support the private agribusiness sector in Poland. The current shareholders in the bank include the European Fund for the Development of the Polish Countryside (45.9%), the Polish-American Enterprise Fund (20%), the Farmers' Social Security Contribution Fund (14.7%), Agricultural Ownership Agency of the State Treasury (8.8%), Agency of the Agricultural Market (6.8%) and Rolimpex SA (3.8%).
The bank showed a net profit in 1994 of zl. 2.1 million ($850,000), with a 5% return on assets but only an 11.5% return on equity. The bank, with very stringent lending policies, has no non-performing loans, and won Gazeta Bankowa's award for the best loan portfolio in 1994. Some of its clients include Zielona Budka, Rolimpex and Animex.
During the past few years, Polish cooperative banks have experienced tough times, with many going bankrupt under the pressure of bad loan portfolios. The dominant figure in the agricultural banking sector is Bank Gospodarki Zywnosciowej, Poland's largest bank in terms of capital (zl. 1.5 billion - $612 million) and widely reported to be the biggest loss maker.
Rabobank plans to assist some of the regional banks with advice and know-how on operating in the agricultural sector, as well as with its advisors. Rabo's advisory arm, RAIS, is also working with the World Bank on the restructuring of BGZ.
"This is a very volatile sector, but we were able to avoid a lot of the mistakes made by other banks in the agricultural sector in the early '90s," Laskowski said. "As they say, you learn from your mistakes."
