PKO-PZU match not made in heaven
Though the emergence and instability of Prime Minister Marek Belka's new government - and the exit of Leszek Miller - have largely put plans for state-owned institutions on indefinite hold, there have still been rumblings at PZU, the largest insurer, and PKO, the largest bank. Last month, PKO president Andrzej Podsiadło announced an informal deadline of July for issuing the bank's privatization prospectus, at the same time proffering tentative plans that it would buy 10-30 percent of PZU. All of this occurred as, in the background, the bank began to absorb the acquisition of Kredyt Bank's Ukrainian operations, amidst plans to look for yet more M&A opportunities.
This leaves open, again, the oft-talked about prospect of combining the two enterprises, a scenario that more than a few politicians have praised and Cezary Stypułkowski, PZU's president, has pondered.
But the critics are in large numbers. "I don't like this sort of idea," says Michał Gorzyński, economist at CASE.
An ardent proponent of privatizations, he explains that the government is only considering joining the two companies to keep control at the same time as the very same politicians tout the fiscal benefits of privatizations. He says that the interests of the two successful, though still antiquated, companies are not at hand in their considerations.
Further, he says that such a huge combined organization under the government auspices would be chaotic.
"My feeling is that it is not manageable," he notes.
Grzegorz Zawada, analyst at Erste Bank Securities, doesn't expect the government to take any substantive action soon. "This has been going on for years," he remarks. But, he says, at present the cooperation between PKO and PZU, which includes minimal insurance and banking cross-selling, is beneficial to both enterprises.
However, like other analysts, Zawada is wary of the bankassurance business model, in which banking and insurance services are more closely linked. And bankassurance, so highly touted in countries such as Belgium, is exactly the direction in which many see the two firms heading.
"People here are talking about it a lot," he says, referring to the bankassurance model. Yet there is still scant demand.
He says he speaks with personal experience.
Many people are finding their "bankassurance clients by surprise," he says.
Often, a bank will offer a client a specific insurance-related service for free at the outset of their contract, but then mysteriously begin charging. Some customers complain; others smile and endure it. Much of the success of the market is based on similar circumstances, he claims.
"All of this," Zawada notes, "is rather discouraging."
This leaves open, again, the oft-talked about prospect of combining the two enterprises, a scenario that more than a few politicians have praised and Cezary Stypułkowski, PZU's president, has pondered.
But the critics are in large numbers. "I don't like this sort of idea," says Michał Gorzyński, economist at CASE.
An ardent proponent of privatizations, he explains that the government is only considering joining the two companies to keep control at the same time as the very same politicians tout the fiscal benefits of privatizations. He says that the interests of the two successful, though still antiquated, companies are not at hand in their considerations.
Further, he says that such a huge combined organization under the government auspices would be chaotic.
"My feeling is that it is not manageable," he notes.
Grzegorz Zawada, analyst at Erste Bank Securities, doesn't expect the government to take any substantive action soon. "This has been going on for years," he remarks. But, he says, at present the cooperation between PKO and PZU, which includes minimal insurance and banking cross-selling, is beneficial to both enterprises.
However, like other analysts, Zawada is wary of the bankassurance business model, in which banking and insurance services are more closely linked. And bankassurance, so highly touted in countries such as Belgium, is exactly the direction in which many see the two firms heading.
"People here are talking about it a lot," he says, referring to the bankassurance model. Yet there is still scant demand.
He says he speaks with personal experience.
Many people are finding their "bankassurance clients by surprise," he says.
Often, a bank will offer a client a specific insurance-related service for free at the outset of their contract, but then mysteriously begin charging. Some customers complain; others smile and endure it. Much of the success of the market is based on similar circumstances, he claims.
"All of this," Zawada notes, "is rather discouraging."
