Treasury pushes ahead with state bank privatization
The Treasury Ministry plans to privatize Poland's largest state-owned savings bank this year, but is still weighing its options on whether to launch the bank on the stock exchange or sell to a strategic investor.
The treasury said an initial public offering (IPO) of Polska Kasa Oszczednosci Bank Polski (PKO BP) will likely happen later this year, adding that it intends to retain a 51% stake in the bank after the sale.
"A public offering of PKO BP's shares is one of the privatization options," said treasury spokeswoman Beata Jarosz last week. She said the bank could also be sold to a strong strategic investor, which many in the bank consider to be the preferable option.
The treasury is expected to present PKO BP's privatization program to the government in May or June. "But final privatization plans have to be given the go-ahead by the government," Jarosz said.
Analysts are cautiously optimistic that the government will approve the sale of the state-owned financial concern. "The IPO of PKO BP bank is only a proposal, and we're not sure if the government will approve it," said Andrzej Powierza, an analyst with Wood&Co., a Warsaw-based brokerage company. He said that if the treasury's plans are not approved, the government will hand the proposal back to the ministry, which will then have to formulate a new privatization scheme.
Analysts said PKO BP's shares will be good news for the Warsaw Stock Exchange (WSE), which many say lacks large, liquid companies. The bank is capitalized at zl. 2.3 billion ($561 million), so even if 20-30% of shares are floated, investors may have an additional offer worth $120 million-$180 million. "If (the government) does agree, it will be welcomed by investors because of the large-scale offering," Powierza said.
The PKO BP share issue will also be dominated by politics, with elections looming later this year. According to Powierza, changes in management are likely after the elections, and in the case of a state bank the quality of the new management is critical. "Who would take over the top position in PKO BP after the elections?" he said. "Will it be a politically correct professional or a politically correct layman?"
Although PKO BP's privatization could be approved in June, analysts see little chance of completing it before the autumn elections.
Meanwhile, it's business as usual for the bank until the privatization issue is resolved. "As long as there are no final decisions about PKO BP's privatization, the bank is carrying on without any special adjustments," said Jan Bazyl Lipszyc, a bank spokesman.
Lipszyc refused to comment on whether the bank would prefer to go public or be sold to a strategic investor. But a source close to the privatization issue, who asked to remain anonymous, said it would be better for the bank to have a strong strategic investor that could strike a balance with the treasury. "The bank needs a strong strategic investor to support the management board in implementing tough decisions, such as job reductions, to make PKO BP more flexible and more competitive," a source said.
PKO BP, with zl. 69.9 billion ($17.1 billion) in assets, has a 17% share of domestic banking assets.
