S-E-Banken challenging German bank for PBR stake
The emergence of a new suitor could throw a wrench into the plans of Bayerische Landesbank (BLB), which in January had applied to the National Bank of Poland (NBP) for permission to acquire 51% of PBR.
Mieczyslaw Groszek, PBR's president, last week confirmed that there are two foreign financial institutions interested in buying a majority stake in the bank. He would not reveal the names of the investors.
Sources within PBR said, though, that S-E-Banken was the new investor interested in PBR, which is traded on the Warsaw Stock Exchange (WSE) and has a market capitalization of zl. 274.4 million ($78.4 million). They added that both S-E-Banken and BLB have recently carried out due diligence on PBR.
Officials at S-E-Banken refused to comment on whether the bank was interested in a stake in PBR.
A final decision on which bank is chosen as the new strategic investor will be up to PBR's existing shareholders, which include: Powszechny Bank Kredytowy (PBK) with 33%, the Industrial Development Agency with 15%, the State Treasury with 30% and Citibank with 7%.
Although BLB first expressed interest in PBR, analysts said S-E-Banken may make more sense as a strategic investor.
"It would be a better fit than BLB," said Denise Vergot Holle, a banking analyst with Merrill Lynch in London. "PBR, which is active in corporate financing, might be their investment arm in this part of Europe."
Vergot Holle added that BLB is already a major shareholder in the Hungarian Foreign Trade Bank (MKB) and that this seems to be its main focus in Eastern Europe. BLB is the seventh largest bank in Germany and is 50% owned by the Bayerische government.
"The concept of S-E-Banken as a majority investor would be much better for PBR," added Pawel Szymanski, an analyst with Schroders in London. "It's one of the strongest banks in Western Europe and is experienced in asset management."
S-E-Banken is part of the S-E-Group and the Wallenberg family empire. It is listed on the Stockholm Stock Exchange and is one of the largest financial groups in the Nordic area, with SEK 420 billion in funds under management and total assets of SEK 669 million. The bank is active in retail and corporate banking and recently made a foray into the insurance industry through the acquisition last year of Swedish insurer Trygg-Hansa. This purchase gave S-E-Banken its first foothold in Poland as Trygg-Hansa has signed a cooperation agreement with the OPZZ trade union, which has slightly more than 4 million members.
OPZZ and Trygg-Hansa now are planning to form a jointly owned company, Garda Life, which has received a license to sell group insurance to the trade union's member. Trygg-Hansa has also signed an agreement to become part-owner of Polish non-life insurer Partner, which is focusing on households and small and medium-sized companies.
The possible formation through a PBR-S-E-Banken alliance could compete with Bank Handlowy, which is planning a similar strategy of having corporate and retail banking services as well as an insurance arm. In addition, one of Handlowy's partners is Swedbank, a direct competitor to S-E-Banken.
An alliance with either the Swedish or German bank would be a new twist for PBR, which was originally supposed to form a banking and insurance group with Polish banks Powszechny Bank Kredytowy (PBK), Bank Przemyslowo-Handlowy (BPH) and insurer Warta.
The group split, however, when BPH pulled out of the consortium and after the privatization of PBK. At that point, PBR began looking for a foreign, strategic investor. A potential investor could either purchase a stake in PBR from existing shareholders or by taking up a new share issue approved by a general shareholders meeting in February 1997. The new issue could be 1 million-4.45 million shares.
At the end of 1997, PBR was the 18th largest bank in Poland in terms of capital (zl. 312.6 million/$89.3 million) and the 20th largest bank in terms of assets (zl. 1.47 billion/$420 million). In 1997, the bank saw gross profit decline 6.1% to zl. 42.4 million ($12.1 million) compared to the previous year, but net profit grew 35.2% to zl. 27.6 million ($7.8 million).
Mieczyslaw Groszek, PBR's president, last week confirmed that there are two foreign financial institutions interested in buying a majority stake in the bank. He would not reveal the names of the investors.
Sources within PBR said, though, that S-E-Banken was the new investor interested in PBR, which is traded on the Warsaw Stock Exchange (WSE) and has a market capitalization of zl. 274.4 million ($78.4 million). They added that both S-E-Banken and BLB have recently carried out due diligence on PBR.
Officials at S-E-Banken refused to comment on whether the bank was interested in a stake in PBR.
A final decision on which bank is chosen as the new strategic investor will be up to PBR's existing shareholders, which include: Powszechny Bank Kredytowy (PBK) with 33%, the Industrial Development Agency with 15%, the State Treasury with 30% and Citibank with 7%.
Although BLB first expressed interest in PBR, analysts said S-E-Banken may make more sense as a strategic investor.
"It would be a better fit than BLB," said Denise Vergot Holle, a banking analyst with Merrill Lynch in London. "PBR, which is active in corporate financing, might be their investment arm in this part of Europe."
Vergot Holle added that BLB is already a major shareholder in the Hungarian Foreign Trade Bank (MKB) and that this seems to be its main focus in Eastern Europe. BLB is the seventh largest bank in Germany and is 50% owned by the Bayerische government.
"The concept of S-E-Banken as a majority investor would be much better for PBR," added Pawel Szymanski, an analyst with Schroders in London. "It's one of the strongest banks in Western Europe and is experienced in asset management."
S-E-Banken is part of the S-E-Group and the Wallenberg family empire. It is listed on the Stockholm Stock Exchange and is one of the largest financial groups in the Nordic area, with SEK 420 billion in funds under management and total assets of SEK 669 million. The bank is active in retail and corporate banking and recently made a foray into the insurance industry through the acquisition last year of Swedish insurer Trygg-Hansa. This purchase gave S-E-Banken its first foothold in Poland as Trygg-Hansa has signed a cooperation agreement with the OPZZ trade union, which has slightly more than 4 million members.
OPZZ and Trygg-Hansa now are planning to form a jointly owned company, Garda Life, which has received a license to sell group insurance to the trade union's member. Trygg-Hansa has also signed an agreement to become part-owner of Polish non-life insurer Partner, which is focusing on households and small and medium-sized companies.
The possible formation through a PBR-S-E-Banken alliance could compete with Bank Handlowy, which is planning a similar strategy of having corporate and retail banking services as well as an insurance arm. In addition, one of Handlowy's partners is Swedbank, a direct competitor to S-E-Banken.
An alliance with either the Swedish or German bank would be a new twist for PBR, which was originally supposed to form a banking and insurance group with Polish banks Powszechny Bank Kredytowy (PBK), Bank Przemyslowo-Handlowy (BPH) and insurer Warta.
The group split, however, when BPH pulled out of the consortium and after the privatization of PBK. At that point, PBR began looking for a foreign, strategic investor. A potential investor could either purchase a stake in PBR from existing shareholders or by taking up a new share issue approved by a general shareholders meeting in February 1997. The new issue could be 1 million-4.45 million shares.
At the end of 1997, PBR was the 18th largest bank in Poland in terms of capital (zl. 312.6 million/$89.3 million) and the 20th largest bank in terms of assets (zl. 1.47 billion/$420 million). In 1997, the bank saw gross profit decline 6.1% to zl. 42.4 million ($12.1 million) compared to the previous year, but net profit grew 35.2% to zl. 27.6 million ($7.8 million).
