Ministry invites 15 banks to bid for 55% of Pekao
Among those invited were the four banks that initially expressed an interest in Pekao - Bank Handlowy, Citicorp, Deutsche Bank and Bank of America. A more complete list, published in daily newspaper Rzeczpospolita, included the U.S.'s Chase Manhattan Bank and GE Capital; Germany's Bayerische Vereinsbank; Finland's Merita; Sweden's Scandinaviska Enskilda Banken (S-E-Banken); and France's Credit Agricole.
But executives working on the privatization said that the list was neither complete nor necessarily accurate. Rzeczpospolita attributed its list to an unnamed source.
"The source who provided the list was not a reliable one," said Marek Gul, president of Credit Suisse First Boston (CSFB), which is advising the Treasury Ministry on Pekao's sale.
Bidders for Pekao must submit their offers along with a detailed proposal, including their price, by mid-October. A short list containing three or four names will be ready by the end of October and selected investors will then be able to carry out due diligence.
The ministry has set the first quarter of 1999 as the deadline for picking Pekao's partner. A further 10% of the bank is to be floated on the Warsaw Stock Exchange (WSE) by the middle of next year.
"But the Treasury Ministry will do its best to complete the deal by the end of this year," said Magdalena Nienaltowska of the Treasury Ministry's press office.
One thing is clear, however, Bank Handlowy will make an offer.
"Bank Handlowy is still interested in acquiring Pekao," said Handlowy's President, Cezary Stypulkowski. He refused to say anything more regarding Pekao's privatization.
Handlowy has been in hot pursuit of Pekao since the ministry this year announced it intended to sell the bank. Buying Pekao would give Handlowy, primarily a corporate bank, quick access to the retail banking market and the cheap funding that comes with having a base of deposits.
Handlowy's loan-to-deposit ratio is 150%, according to Merrill Lynch's calculations - which is considered to be extremely high.
In the meantime, Handlowy is trying to build its own retail arm. Handlowy plans to establish a network of 60 retail outlets through a subsidiary called Handlobank.
It has taken Handlowy longer to open those outlets than originally expected, however. The first outlet was supposed to open in July, but was then delayed until mid-September as Handlowy straightened out problems with its software.
A merged Handlowy and Pekao would create the largest bank in Poland, with total assets of roughly zl. 70 billion ($21 billion) and more than 500 branch outlets.
But in spite of Handlowy's determination, Pekao's management rebuffed its advances. Pekao President Maria Wisniewska told the Business Journal in an interview this summer that her bank needed a partner with retail banking experience, something Handlowy lacks.
The government already floated 15% of Pekao on the WSE in June, the first step in the bank's privatization. The institution, which comprises bank Pekao, Bank Depozytowo-Kredytowy of Lublin, Pomorski Bank Kredytowy of Szczecin and Powszechny Bank Gospodarczy of lodz, is the largest financial services group with a 20% market share. The total assets of the four banks amount to zl. 50 billion ($14.28 billion).
But executives working on the privatization said that the list was neither complete nor necessarily accurate. Rzeczpospolita attributed its list to an unnamed source.
"The source who provided the list was not a reliable one," said Marek Gul, president of Credit Suisse First Boston (CSFB), which is advising the Treasury Ministry on Pekao's sale.
Bidders for Pekao must submit their offers along with a detailed proposal, including their price, by mid-October. A short list containing three or four names will be ready by the end of October and selected investors will then be able to carry out due diligence.
The ministry has set the first quarter of 1999 as the deadline for picking Pekao's partner. A further 10% of the bank is to be floated on the Warsaw Stock Exchange (WSE) by the middle of next year.
"But the Treasury Ministry will do its best to complete the deal by the end of this year," said Magdalena Nienaltowska of the Treasury Ministry's press office.
One thing is clear, however, Bank Handlowy will make an offer.
"Bank Handlowy is still interested in acquiring Pekao," said Handlowy's President, Cezary Stypulkowski. He refused to say anything more regarding Pekao's privatization.
Handlowy has been in hot pursuit of Pekao since the ministry this year announced it intended to sell the bank. Buying Pekao would give Handlowy, primarily a corporate bank, quick access to the retail banking market and the cheap funding that comes with having a base of deposits.
Handlowy's loan-to-deposit ratio is 150%, according to Merrill Lynch's calculations - which is considered to be extremely high.
In the meantime, Handlowy is trying to build its own retail arm. Handlowy plans to establish a network of 60 retail outlets through a subsidiary called Handlobank.
It has taken Handlowy longer to open those outlets than originally expected, however. The first outlet was supposed to open in July, but was then delayed until mid-September as Handlowy straightened out problems with its software.
A merged Handlowy and Pekao would create the largest bank in Poland, with total assets of roughly zl. 70 billion ($21 billion) and more than 500 branch outlets.
But in spite of Handlowy's determination, Pekao's management rebuffed its advances. Pekao President Maria Wisniewska told the Business Journal in an interview this summer that her bank needed a partner with retail banking experience, something Handlowy lacks.
The government already floated 15% of Pekao on the WSE in June, the first step in the bank's privatization. The institution, which comprises bank Pekao, Bank Depozytowo-Kredytowy of Lublin, Pomorski Bank Kredytowy of Szczecin and Powszechny Bank Gospodarczy of lodz, is the largest financial services group with a 20% market share. The total assets of the four banks amount to zl. 50 billion ($14.28 billion).
