Former FinMins question gov't bank sale plans
In a confidential letter to Finance Minister Leszek Balcerowicz, three of his predecessors - Marek Belka, Jerzy Osiatynski and Andrzej Olechowski - have asked the government to reconsider its privatization strategy for the banking sector, the Business Journal has learned.
The letter, along with three drafts of parliamentary resolutions questioning bank privatization strategy that were due for debate this week, prompted the government to quickly wrap up the sales of Bank Pekao and Bank Zachodni to strategic investors last week. (See related story, page 25)
"Of course, the external pressure was not the only reason why we did it so fast," said Henryka Bochniarz, president of Nicom Consulting, which advised the Treasury Ministry on the sale of 80% of Zachodni to Allied Irish Bank (AIB). "But they were an important impulse."
Bochniarz said she heard about the letter, but had not seen a copy of it.
However, the sales of Zachodni and Pekao, in which a majority stake was sold to a consortium of UniCredito Italiano and German insurer Allianz, were well advanced by the time the three former finance ministers had sent their letter on June 18.
This has led bank industry observers to believe that the letter is part of a lobbying effort aimed at seeing that Powszechna Kasa Oszczednosci Bank Panstwowy (PKO BP) is sold to a Polish bank. Apart from the problem-plagued Bank Gospodarki Zywnosciowej (BGZ), PKO is the last large, state-owned bank to be privatized and its sale could take place later this year.
The letter to Balcerowicz spoke of the already high participation of foreign capital in the Polish banking sector and questioned whether the sale of Bank Pekao, the second largest bank in terms of total assets, was beneficial to the bank and economy as a whole.
"The letter was aimed at PKO BP and Olechowski's presence is an indicator," said an investment banker who did not wish to be named. "It's part of the lobbying to sell PKO BP to Bank Handlowy."
Olechowski is chairman of the supervisory board of Handlowy, which had unsuccessfully bid for both Pekao and Zachodni. PKO BP would be Handlowy's last chance to snap up a ready-made retail network through a privatization. Belka is a member of BIG Bank Gdanski's supervisory board.
Neither Olechowski nor Belka would comment on the letter. Osiatynski was unavailable for comment. Finance Minister Leszek Balcerowicz was not available for comment late last week and his spokesman Piotr Dubno said he was unaware of the letter.
The letter is likely to fuel debate by parliamentarians who have questioned the government's bank privatization strategy. (Ironically, Osiatynski is a member of the Freedom Union (UW), which is headed by Balcerowicz.) Resolutions related to bank sales have been offered in Parliament by members of government coalition member Solidarity Election Action (AWS), as well as from opposition deputies with Democratic Left Alliance (SLD) and the Peasants Party (PSL).
The SLD said its resolution was not aimed at halting bank sales, but rather was intended to force the government to answer basic questions about the sector and the plan for its development.
"We simply wanted the Treasury Ministry to present the government strategy in the long term," said Wieslaw Kaczmarek, an SLD deputy, author of his party's resolution and a former privatization minister. "I'm afraid such a strategy doesn't exist."
He added that SLD addressed the question to the Treasury Ministry several times and has never received an answer.
"So the resolution was the last resort," Kaczmarek said.
The resolution, which Kaczmarek said has awaited discussion in Parliament for two months, asks the Treasury Ministry to clarify three issues. First, to explain the future of the banking sector envisaged by the government. Second, what the total cost is of bank sector restructuring, including restructuring bonds and loans from the World Bank that the government will have to repay. And third, what government policy is in terms of banking sector competitiveness and development.
"And also, what are the conditions that would allow Polish banks to accumulate capital and to create strong financial groups," Kaczmarek said. At the end of its resolution, SLD suggested holding off on further bank sales until Parliament receives answers to these questions, Kaczmarek added.
This is now a moot point due to the sale of Pekao and Bank Zachodni, he said. But it might be important in case of PKO BP and BGZ. "From the Treasury Ministry point of view, (Minister Emil) Wasacz made the right decision finalizing the deals so quickly," Kaczmarek said. "Albeit it was a cowardly one. Being in his shoes, I would be personally interested in a wider debate on the issue."
The letter, along with three drafts of parliamentary resolutions questioning bank privatization strategy that were due for debate this week, prompted the government to quickly wrap up the sales of Bank Pekao and Bank Zachodni to strategic investors last week. (See related story, page 25)
"Of course, the external pressure was not the only reason why we did it so fast," said Henryka Bochniarz, president of Nicom Consulting, which advised the Treasury Ministry on the sale of 80% of Zachodni to Allied Irish Bank (AIB). "But they were an important impulse."
Bochniarz said she heard about the letter, but had not seen a copy of it.
However, the sales of Zachodni and Pekao, in which a majority stake was sold to a consortium of UniCredito Italiano and German insurer Allianz, were well advanced by the time the three former finance ministers had sent their letter on June 18.
This has led bank industry observers to believe that the letter is part of a lobbying effort aimed at seeing that Powszechna Kasa Oszczednosci Bank Panstwowy (PKO BP) is sold to a Polish bank. Apart from the problem-plagued Bank Gospodarki Zywnosciowej (BGZ), PKO is the last large, state-owned bank to be privatized and its sale could take place later this year.
The letter to Balcerowicz spoke of the already high participation of foreign capital in the Polish banking sector and questioned whether the sale of Bank Pekao, the second largest bank in terms of total assets, was beneficial to the bank and economy as a whole.
"The letter was aimed at PKO BP and Olechowski's presence is an indicator," said an investment banker who did not wish to be named. "It's part of the lobbying to sell PKO BP to Bank Handlowy."
Olechowski is chairman of the supervisory board of Handlowy, which had unsuccessfully bid for both Pekao and Zachodni. PKO BP would be Handlowy's last chance to snap up a ready-made retail network through a privatization. Belka is a member of BIG Bank Gdanski's supervisory board.
Neither Olechowski nor Belka would comment on the letter. Osiatynski was unavailable for comment. Finance Minister Leszek Balcerowicz was not available for comment late last week and his spokesman Piotr Dubno said he was unaware of the letter.
The letter is likely to fuel debate by parliamentarians who have questioned the government's bank privatization strategy. (Ironically, Osiatynski is a member of the Freedom Union (UW), which is headed by Balcerowicz.) Resolutions related to bank sales have been offered in Parliament by members of government coalition member Solidarity Election Action (AWS), as well as from opposition deputies with Democratic Left Alliance (SLD) and the Peasants Party (PSL).
The SLD said its resolution was not aimed at halting bank sales, but rather was intended to force the government to answer basic questions about the sector and the plan for its development.
"We simply wanted the Treasury Ministry to present the government strategy in the long term," said Wieslaw Kaczmarek, an SLD deputy, author of his party's resolution and a former privatization minister. "I'm afraid such a strategy doesn't exist."
He added that SLD addressed the question to the Treasury Ministry several times and has never received an answer.
"So the resolution was the last resort," Kaczmarek said.
The resolution, which Kaczmarek said has awaited discussion in Parliament for two months, asks the Treasury Ministry to clarify three issues. First, to explain the future of the banking sector envisaged by the government. Second, what the total cost is of bank sector restructuring, including restructuring bonds and loans from the World Bank that the government will have to repay. And third, what government policy is in terms of banking sector competitiveness and development.
"And also, what are the conditions that would allow Polish banks to accumulate capital and to create strong financial groups," Kaczmarek said. At the end of its resolution, SLD suggested holding off on further bank sales until Parliament receives answers to these questions, Kaczmarek added.
This is now a moot point due to the sale of Pekao and Bank Zachodni, he said. But it might be important in case of PKO BP and BGZ. "From the Treasury Ministry point of view, (Minister Emil) Wasacz made the right decision finalizing the deals so quickly," Kaczmarek said. "Albeit it was a cowardly one. Being in his shoes, I would be personally interested in a wider debate on the issue."
