PKO BP: deciding the when and how of capitalization

The government is expected today to decide on capitalizing Poland's largest retail bank PKO BP through the transfer of shares from unnamed state-controlled companies. Market analysts claim that shares from copper conglomerate KGHM Polska Miedz,A (Bare most likely to be transferred to PKO, to enhance its balance sheet ahead of privatization. The bank is said to need another zl.500 million this year. Grzegorz Zawada, an analyst from Erste Securities, said, "according to our calculations this is the value of the Treasury's shares in KGHM." As the state owns 100% of PKO BP, it makes no difference if the state-owned copper giant's shares of 49.5% are transferred to PKO's ownership; the state would still be able to manage KGHM through the bank. However, it is likely that the state will choose to transfer shares from other companies as well, as government officials last week announced that PKO would be capitalized through shares of five to 11 state-owned companies. Analysts say that fuel producer and distributor PKN Orlen will most likely be the second firm chosen to boost PKO's equity. (Puls Biznesu, pp. 1, 7) M.M.