Four banks short-listed for BPH stake
The banks were selected from among the seven banks that submitted bids. The Treasury Ministry is expected to make a final decision by autumn on the winner of the 41%, which will constitute a controlling stake in the bank.
Analysts said last week that two contenders, AIB and Deutsche Bank, would be the best match for BPH.
AIB already controls a strong regional bank here, Wielkopolski Bank Kredytowy (WBK), in which it has 61%. AIB is credited with helping WBK quickly expand its network, develop new products and update its technology.
"AIB already has a track record in Poland," said Merrill Lynch analyst Denise Vergot Holle. "They did a very good job with WBK."
BPH is the seventh largest bank in Poland with zl. 10 billion ($2.9 billion) in total assets. At the end of 1997, the bank posted a net profit of zl. 314 million ($91 million).
Both WBK and BPH are strong in their respective regions. WBK has more than 120 branches operating primarily in western Poland, while BPH has 178 in the south.
The two banks have already begun to cooperate on the insurance front. Last week both WBK and BPH signed an initial agreement to establish a pension fund with insurer Commercial Union (CU). The two banks also said they will sell CU's insurance policies through their networks.
"Having AIB in BPH would mean all the advantages of having a strategic investor as well as further consolidation" in the industry, said Jean-Pierre Lambert, an analyst with London-based Dresdner Kleinwort Benson.
Deutsche Bank, which has a subsidiary here called Deutsche Bank Polska, submitted the best offer for BPH, said a source close to the negotiations, although the exact bids by each bank were not disclosed.
For that reason, Deutsche Bank may end up winning BPH, sources said. They added that it is doubtful that either the U.S.'s GE Capital or the Netherlands' ABN Amro will walk away with the bank.
Lambert said that selling BPH to either the Americans or the Dutch would further fragment Poland's already scattered banking market. Foreign investors such as the Netherlands' ING Barings, Citibank, Bank Austria Creditanstalt and Commerzbank are already present here.
At the same time, however, Lambert said that the government may not want to give the Irish too much influence and will instead bring in the Germans.
"It would be a very strong signal sent to foreign investors," said the source. "And it's especially important in light of Poland's membership in the European Union."
Germany's close proximity to Poland may also make it easier for Deutsche Bank to manage BPH. In addition, the German bank has considerable experience in electronic banking, through its subsidiary Bank 24.
"In my opinion, Deutsche Bank is much better prepared to manage a Polish bank than any other," said Thomas Marsillio, senior analyst with New York-based Arnhold & Bleichroeder. "It's a natural, strategic fit."
The sale of 41% of BPH will leave the state treasury with 5.67%. BPH's other major shareholders include the European Bank for Reconstruction and Development (EBRD) with 15.06% and ING Barings with 12.6%. The remainder of the bank is traded on the Warsaw Stock Exchange (WSE).
Eleven banks initially expressed an interest in buying the BPH stake including Bank Handlowy, BIG Bank Gdanski, ING Barings, Bank of America, Skandinaviska Enskilda Banken and Bayerische Landesbank.
Analysts said last week that two contenders, AIB and Deutsche Bank, would be the best match for BPH.
AIB already controls a strong regional bank here, Wielkopolski Bank Kredytowy (WBK), in which it has 61%. AIB is credited with helping WBK quickly expand its network, develop new products and update its technology.
"AIB already has a track record in Poland," said Merrill Lynch analyst Denise Vergot Holle. "They did a very good job with WBK."
BPH is the seventh largest bank in Poland with zl. 10 billion ($2.9 billion) in total assets. At the end of 1997, the bank posted a net profit of zl. 314 million ($91 million).
Both WBK and BPH are strong in their respective regions. WBK has more than 120 branches operating primarily in western Poland, while BPH has 178 in the south.
The two banks have already begun to cooperate on the insurance front. Last week both WBK and BPH signed an initial agreement to establish a pension fund with insurer Commercial Union (CU). The two banks also said they will sell CU's insurance policies through their networks.
"Having AIB in BPH would mean all the advantages of having a strategic investor as well as further consolidation" in the industry, said Jean-Pierre Lambert, an analyst with London-based Dresdner Kleinwort Benson.
Deutsche Bank, which has a subsidiary here called Deutsche Bank Polska, submitted the best offer for BPH, said a source close to the negotiations, although the exact bids by each bank were not disclosed.
For that reason, Deutsche Bank may end up winning BPH, sources said. They added that it is doubtful that either the U.S.'s GE Capital or the Netherlands' ABN Amro will walk away with the bank.
Lambert said that selling BPH to either the Americans or the Dutch would further fragment Poland's already scattered banking market. Foreign investors such as the Netherlands' ING Barings, Citibank, Bank Austria Creditanstalt and Commerzbank are already present here.
At the same time, however, Lambert said that the government may not want to give the Irish too much influence and will instead bring in the Germans.
"It would be a very strong signal sent to foreign investors," said the source. "And it's especially important in light of Poland's membership in the European Union."
Germany's close proximity to Poland may also make it easier for Deutsche Bank to manage BPH. In addition, the German bank has considerable experience in electronic banking, through its subsidiary Bank 24.
"In my opinion, Deutsche Bank is much better prepared to manage a Polish bank than any other," said Thomas Marsillio, senior analyst with New York-based Arnhold & Bleichroeder. "It's a natural, strategic fit."
The sale of 41% of BPH will leave the state treasury with 5.67%. BPH's other major shareholders include the European Bank for Reconstruction and Development (EBRD) with 15.06% and ING Barings with 12.6%. The remainder of the bank is traded on the Warsaw Stock Exchange (WSE).
Eleven banks initially expressed an interest in buying the BPH stake including Bank Handlowy, BIG Bank Gdanski, ING Barings, Bank of America, Skandinaviska Enskilda Banken and Bayerische Landesbank.
