PKO - OTP merger rumors heat up

Speculation about the impending merger of PKO BP and Hungarian OTP Bank reached fever pitch last week, though talks on such a merger have been held for years.

The CEO of OTP Bank, Sándor Csányi, visited Warsaw at the end of September to meet with Treasury Minister Aleksander Grad and the president of the Warsaw Stock Exchange, Ludwik Sobolewski. According to daily Puls Biznesu Treasury Minister Grad offered a share swap between the two banks as the first step towards a merger.

However, on Wednesday Minister Grad told the press that while the talks had covered various issues,  the question of a merger was not mentioned.

Despite these statements, it became clear that talks of a merger between the two banks have been going on for quite some time. The Financial Times last week quoted Csányi as saying that discussions have been continuing for the last five years. Former PKO BP presidents Rafał Juszczak and Andrzej Podsiadło had also held talks on such a merger during their tenures, it was widely reported.

While the share swap was never confirmed, such a move could be a good introduction to further activities leading to a merger, Puls Biznesu quoted Juszczak as saying.

OTP's Csányi also told the press last Monday that the Hungarian bank wants to put 20 percent of its existing shares on the WSE by the end of the year.

One of the biggest and oldest Polish banks, PKO BP, is controlled by the state, which owns a 51.49-percent stake. According to Minister Grad's declarations last month, the Treasury Ministry wants to reduce its share to no less than 30 percent.