Supervisory commission to decide on PKO BP's future

The Banking Supervisory Commission (KNB) is expected today to decide on PKO BP S.A.'s restructuring program, a state-backed financial aid package including substantial help from the State Treasury and other public institutions including the Banking Guarantee Fund (BFG), which is to inject zl.600 million into the bank. PKO, Poland's largest retail bank, was forced to introduce fundamental changes to its structure to cover losses in 1998 amounting to zl.1.3 billion, losses which in turn caused its capital adequacy to fall under the central bank's obligatory 8% level. The bank is to receive zl.425 million, as the first part of restructuring, through the transfer of shares of five Treasury-controlled companies. The second part of the program, which was recently endorsed by the Sejm, includes the government's paying off zl.300-400 million in housing loans from the bank's so-called old portfolio. It is thought that the National Bank of Poland (NBP) would also buy half of PKO's low interest-bearing bonds amounting to a few billion zlotys, issued by other banks. Moreover, NBP may exempt PKO from paying a quarter of obligatory reserves owed to the central bank. (Rzeczpospolita, pp.A1, B1)