On 7 August 2013
the Polish financial website Parkiet reported that Bank Pekao (Bank
Polska Kasa Opieki SA), a Polish subsidiary of Italy’s UniCredit S.p.A., is
interested in buying BGŻ (Bank Gospodarki Żywnościowej SA), a Polish
subsidiary of the Rabobank Group of Utrecht, Netherlands, a leading bank in the
food and agricultural sector worldwide.
Parkiet reported that the
president of Bank Pekao, Luigi Lovaglio, had obtained authorization from
UniCredit to submit a bid to Rabobank for the purchase of BGŻ. The report estimated the value of the deal at
PLN 7-8 bln (€ 1.7-1.9 bln), but stated that the Italians had deliberately
submitted a bid that was low. (At the
time of writing EUR 1 = PLN 4.1994 and USD 1 = 3.1643.)
Earlier, on 20 December 2012 Rabobank had indicated that
by mid-2016 it intended to reduce its holdings in BGŻ. Specifically, it announced that having
recently succeeded in raising its stake in BGŻ from 60% to more than 98%, its
intention was to merge the bank with Rabobank’s preexisting wholly-owned Polish
subsidiary, Rabobank Polska S.A., with Rabobank Polska being absorbed by BGŻ “before
the end of 2013 and no later than mid 2014”.
After that merger, Rabobank intended to reduce its holdings of the
resulting bank to 75% by increasing the free float of BGŻ shares on the Warsaw
Stock Exchange to at least 25% by no later than mid-2016.
On 12 May 2013 the newssite Rzeczpospolita
reported that Rabobank was looking to “sell” BGŻ – apparently its entire
interest in the bank – and was canvassing among the larger Polish banks for
potential interest.
On 28 June 2013 Parkiet reported that Rabobank
was evaluating its options for selling the bank, and that four Polish banks
were interested in acquiring BGŻ: ING Bank Śląski S.A.
The 7 August report
by Parkiet therefore adds a fifth bank to the list of Polish banks
reportedly interested in acquiring BGŻ from its Dutch parent.
Background data – BGŻ
On 14 August 2013 the management
of BGŻ published audited, consolidated financial statements
for 1H 2013. As of 30 June 2013 the key
data consolidated data* were as follows (EUR 1 = PLN 4.3292):
Total assets: PLN 36,702.0 mln
(€ 8.478 bln)
Total loans: PLN 25,968.8 mln (€
5.999 bln)
Total deposits: PLN 26,677.9
mln (€ 6.162 bln)
Ratio of impaired loans to
total loans: 7.93%
Coverage ratio for impaired
loans: 49.58%
Share capital: PLN 51.1 mln (€
11.8 mln)
Number of branches: 402
Number of ATMs: 425
Number of employees: 5,710
*Besides the bank itself, the consolidated data include a 100%-owned
real-estate subsidiary (Bankowy Fundusz Nieruchomościowy Actus Sp. z o.o.) and
a 49%-owned leasing subsidiary (BGŻ Leasing Sp. z o.o.).
At end-2012 BGŻ ranked as the 10th largest commercial bank in
Poland
At the time of writing the market capitalization of the bank is
calculated at PLN 3.293 bln (€ 772 mln) and its book value at PLN 3.475 bln (€ 827
mln).
Quarterly financial
results for Bank Gospodarki Żywnościowej (BGŻ),
2010-2013 (in PLN)
Quarter
|
Net interest income
for quarter |
Net fee and commission income
for quarter |
Net profit/loss
for quarter |
1Q 2010
|
127,199,000
|
62,919,000
|
9,677,000
|
2Q 2010
|
146,015,000
|
68,820,000
|
13,618,000
|
3Q 2010
|
159,330,000
|
70,345,000
|
23,009,000
|
4Q 2010
|
171,774,000
|
69,443,000
|
66,037,000
|
1Q 2011
|
171,140,000
|
64,061,000
|
33,829,000
|
2Q 2011
|
198,639,000
|
68,191,000
|
26,453,000
|
3Q 2011
|
228,440,0oo
|
69,251,000
|
40,600,000
|
4Q 2011
|
235,792,000
|
68,394,000
|
27,215,000
|
1Q 2012
|
244,805,000
|
70,609,000
|
40,479,000
|
2Q 2012
|
257,456,000
|
77,573,000
|
-1,023,000
|
3Q 2012
|
262,571,000
|
77,308,000
|
38,202,000
|
4Q 2012
|
256,535,000
|
70,687,000
|
52,391,000
|
1Q 2013
|
239,035,000
|
69,329,000
|
29,544,000
|
2Q 2013
|
242,537,000
|
60,771,000
|
52,988,000
|
As of 28 June 2013 , BGŻ was owned 98.50% by the Rabobank
Group: 8.41% by Rabobank Nederland (Coöperatieve Centrale
Raiffeisen-Boerenleenbank B.A.) and 90.09% by its wholly owned subsidiary
Rabobank International Holding B.V.
Rabobank originally acquired a 35.3% interest in BGŻ in late 2004 for
approximately € 150 mln in coordination with an acquisition of a 15% interest
in BGŻ by the European Bank for Reconstruction and Development (EBRD). Rabobank raised its interest to 37% in 2006, to
46.05% in 2007, and to 59.35% in April 2008 through the acquisition of the
12.87% interest still owned at that time by EBRD. In mid-2012 the Dutch bank carried out a tender offer
for outstanding shares of BGŻ, so that at end-2012 the Rabobank Group’s
shareholdings in BGŻ had reached 98.26%.
Background data –
Bank Pekao
On 6 August 2013 the management
of Bank
Pekao published audited, condensed consolidated
financial statements for the Bank Pekao Group for 1H 2013. As of 30 June 2013 the key data consolidated
data* were as follows (EUR 1 = PLN 4.3292):
Total assets: PLN 150,784.6 mln
(€ 34.830 bln)
Total loans: PLN 97,043.6 mln
(€ 22.416 bln)
Total deposits: PLN 108,964.4
mln (€ 25.170 bln)
Ratio of impaired receivables
to total receivables: 7.5%
Share capital: PLN 262.5 mln (€
60.63 mln)
Number of outlets (Bank Pekao +
PJSC UniCredit Bank in Ukraine): 1,040
Number of ATMs (Bank Pekao +
PJSC UniCredit Bank in Ukraine): 1,907
Number of employees: 19,515
*Besides the bank itself, the consolidated data include 18 subsidiaries
consolidated under the full method (podmioty konsolidowane metodą pełną)
and 5 consolidated under the equity method (podmioty wyceniane metodą praw
własności).
At end-2012 Bank Pekao ranked as the 2nd largest commercial
bank in Polish assets, with total assets of PLN 151.0 bln (€ 36.9 bln), well
behind the front runner, PKO Bank Polski, which had total assets of PLN 193.5
bln.
In earlier news, on
16 July 2013 Bank Pekao sold a
100% stake in its principal subsidiary, the Ukrainian commercial bank PJSC
UniCredit Bank (ПАТ «УніКредит Банк»), to the parent bank in Italy October 1, 2010 to July 16, 2013 .” The CEO of PJSC UniCredit Bank in Kiev Ukraine
Earlier still, on
31 January the Italian parent bank, UniCredit S.p.A. of Rome 30
June 2013 , the second-largest shareholder in Bank Pekao was
Aberdeen Asset Management PLC of Aberdeen , Scotland
Principal sources:
BGŻ: List of shareholders as of 2013-06-28: Wykaz
Akcjonariuszy posiadających co najmniej 5% liczby głosów na WZ BGŻ S.A. 28
czerwca 2013 r. (2013-06-28)
BGŻ press release: The
intent to merge Bank BGZ S.A. and Rabobank Polska and plans for increasing
shares in the free float (2012-12-20)
Rabobank press release: Rabobank
announces merger intentions between subsidiaries BGZ and Rabobank Polska
(2012-12-20)
Rabobank press release: Rabobank:
result of Tender Offer almost 100% stake in BGZ (2012-07-31)
Rabobank press release: Rabobank
announces a tender offer on all outstanding Bank BGZ shares (2012-04-11)
BGŻ IPO of May 2011 – Overview and links to documents:
Oferta
publiczna akcji serii A i akcji serii D Banku Gospodarki Żywnościowej S.A.
BGŻ IPO of May 2011 – Prospectus: Prospekt
emisyjny (2011-04-29)
BGŻ: Consolidated
Financial Statements 2012 (2013-03-04)
Rabobank Group: Consolidated
Financial Statements 2011 (2012-03-29)
Rabobank Group: Consolidated
Financial Statements 2010 (2011-04-08)
BGŻ: Consolidated
Financial Statements 2008 (2009-03-23)
Rabobank Group: Consolidated
Financial Statements 2008 (2009-03-31)
Rabobank Group: Annual Report
2007 (2008-04-15)
Rabobank Group: Consolidated
Financial Statements 2006 (2007-04-04)
Rabobank Group: Annual Report
2004 (2005-05-25)
BGŻ – Financial statements for 1H 2013: 14
sierpnia – Wyniki finansowe Banku BGŻ za I półrocze 2013 r. (2013-08-14)
BGŻ press release – Results for 1H 2013: Komunikat
prasowy: Bank BGŻ - poprawa wyniku po pierwszym półroczu 2013 roku (2013-08-14)
BGŻ – Financial statements for 1H 2012: Wyniki – Półroczne
sprawozdania finansowe – 2012 – Podstawowe dane finansowe BGŻ S.A. w formacie
Excel - plik ZIP
Market cap and book value of BGŻ: Informacje
podstawowe (2013-08-14)
Bank Pekao results for 1H 2013: Skonsolidowane
i Jednostkowe Sprawozdanie Finansowe Banku za 1 półrocze 2013 r.
(2013-08-06)
PJSC UniCredit Bank press release: ПАТ
«УніКредит Банк» закінчив перший етап внутрішньогрупової реорганізації
(2013-07-18)
PJSC Ukrotsbank press release: First Deputy CEO of
"Ukrsotsbank": UniCredit is not leaving Ukraine, but will not buy new
assets – interview to UNIAN agency (2013-07-17)
Bank Pekao press release: 17.07.2013
- Report 28/2013: Information on divestment of a 100% stake in PJSC UniCredit
Bank, subsidiary of the Bank (2013-07-17)
Aberdeen Asset Management PLC: Aberdeen
Emerging Markets Fund – Fund Holdings – 07/31/2013
In other news, on 5
August 2013 the National Bank of Poland (Narodowy Bank Polski – NBP)
published its latest quarterly opinion survey of banks’ senior loan officers. The NBP describes the overlying methodology
as follows: “The survey is addressed to the chairpersons of banks’ credit
committees. Banks’ responses may not take account of the opinions of banks’
divisions other than the credit divisions. The survey was conducted at the turn
of June and July 2013 among 27 banks with a total share of 81% in claims on
enterprises and households in the banking sector’s portfolio.”
The NBP summarizes
the most significant results of this latest survey as follows:
Summary of the survey results
Corporate loans
· Lending policy: a slight tightening of lending standards for
long-term loans; higher collateral requirements and an increase in spreads on
riskier loans; the extension of maximum loan maturity and lowering of non-interest
loan costs.
·
Demand for loans: a slight rise in demand for short-term
loans to large enterprises.
· Expectations for the third quarter of 2013: no change in
lending policy; a slight increase in demand for loans to large enterprises.
Housing loans
· Lending policy: a slight easing of lending standards; an
increase in spreads.
·
Demand for loans: a rise in loan demand.
· Expectations for the third quarter of 2013: a slight easing
of lending policy and a slight rise in loan demand.
Consumer loans
· Lending policy: a significant easing of lending standards;
an increase in maximum size of loan, a decrease in spreads, extending of
maximum loan maturity.
·
Demand for loans: a significant increase in loan demand.
· Expectations for the third quarter of 2013: a significant
easing of lending policy and growth in loan demand.
The survey responding banks eased,
for the first time in four quarters, some of their lending terms in the segment
of corporate loans. In their opinion, this change was driven, inter alia, by
the activation of the government programme of De Minimis portfolio guarantee facility. At the same time, there was a
decline in the percentage of the banks that identified elevated risk associated
with future developments in the economy and industry-specific risk. Changes in
credit standards and lower financing needs for investment had an adverse impact
on loan demand. The banks considered payment backlogs and extended payment
periods as loan demand-driving factors.
For another quarter in succession,
the banks reported a rise in spreads on housing loans. Despite the move, the
demand for housing loans rose, which was attributed by the banks to a reduction
in the availability of this type of credit at other banks and to active selling
and marketing practices.
The banks substantially eased their
lending policies in the segment of consumer loans, which was primarily related
to the implementation of an amended Recommendation T. According to the banks,
an easing of standards and terms on consumer loans helped to increase demand for
this type of funding.
NBP video presentation of
credit survey results
Sources:
NBP analysis of survey – Polish: Polityka
kredytowa banków (2013-08-05)
NBP analysis of survey – English: Banks’
lending policy (2013-08-05)
Full survey results and analysis – Polish: Sytuacja
na rynku kredytowym, III kwartał 2013 r. (2013-07-22)
Full survey results and analysis – English: Senior
loan officer opinion survey-on bank lending practices and credit conditions
(3rd quarter 2013) (2013-08-02)
NBP video
presentation of credit survey results: Sytuacja na rynku kredytowym
(2013-08-05)
Stefan Kawalec
Ernest Pytlarczyk, Ph.D.
Earlier, in mid-July
2013 the NBP published its Working Paper No. 155: “Controlled
dismantlement of the Eurozone: A proposal for a New European Monetary System and
a new role for the European Central Bank”, by Stefan Kawalec and Ernest
Pytlarczyk. In contrast to the usual
fare offered by central banks, written by staff research economists, this paper
was penned by two people in the private sector: “Stefan Kawalec is President of
Capital Strategy Sp. z o. o. (a strategy consulting company). He is a former
vice-minister of finance in Poland Poland
The authors
summarize the situation of the eurozone as follows:
To the above description
they append the following in a footnote:
Sinn
(2013) gave the following summary of the current Eurozone plight: “Crunch
time is fast approaching. Cyprus is almost out of the euro, its banks’ collapse
having been delayed by the European Central Bank’s provision of Emergency
Liquidity Assistance, while euroskeptic parties led by Beppe Grillo and Silvio
Berlusconi garnered a combined total of 55% of the popular vote in the latest
Italian general election. Moreover, the Greeks and Spaniards are unlikely to be
able to bear the strain of economic austerity much longer, with youth
unemployment inching toward 60%. The independence movement in Catalonia has gathered
so much momentum that a leading Spanish general has vowed to send troops into
Barcelona should the province hold a referendum on secession. France, too, has
competitiveness problems, and is unable to meet its commitments under the
European Union’s Fiscal Compact. Portugal needs a new rescue program, and Slovenia
could soon be asking for a rescue as well.”
Beylin
(2013) advises that in crisis-ridden Portugal, 87% people are dissatisfied with
the democratic regime, and nearly half of the population positively assess the
dictatorship which was overthrown in 1970s (according to an opinion poll in
late 2012). “Across Europe, nostalgia for a strong order and powerful leaders
proliferates, while the memory of misfortunes caused by dictatorships pales,” he
writes.
The abstract for
the paper is reproduced below verbatim:
ABSTRACT
In Kawalec and Pytlarczyk (2013), we argue that the
single European currency constitutes a serious threat to the European Union and
the Single European Market, and we propose a controlled dismantlement of the
Eurozone. In this paper, we undertake a deeper analysis of the measures which
would minimize the risks throughout the process of the Eurozone dismantlement
and contribute to rebuilding confidence in the future of Europe .
· The dismantlement should be
the result of a consensual decision to replace the euro with an alternative
system of currency coordination.
· The dismantlement should
start with the exit of the most competitive countries. In the meantime, the
euro should remain the common currency of less competitive countries.
· The European Central Bank
(ECB) should be preserved as the central bank for all 17 Eurozone member
countries, even after some of those countries have replaced the euro with new
currencies. In this capacity, the ECB should be in charge of designing,
preparing, and implementing the segmentation of the Eurozone as well as
managing the new currency coordination system – European Monetary System 2.
· The forthcoming EU – USA Europe .
As of today, neither the member states of the Eurozone
nor European institutions such as the European Commission or the ECB have been
able to come up with a game-changing proposal such as the Eurozone
dismantlement. However, this may change as a result of adverse economic and
political developments. One of the potential triggers could be the situation in
France
The paper is
available only in English, but the same content was covered by the two authors in
a seminar held at the NBP on 28 June 2013 , “Kontrolowana
dekompozycja strefy euro. Propozycja nowego Europejskiego Systemu Walutowego i
nowej roli dla Europejskiego Banku Centralnego”, the slides for which are
available at the website of the NBP.
Sources:
NBP Working Paper No. 155: “Controlled
dismantlement of the Eurozone: A proposal for a New European Monetary System
and a new role for the European Central Bank”, by Stefan Kawalec and Ernest
Pytlarczyk (2013-07-18)
NBP Economics Institute Seminar: “Kontrolowana
dekompozycja strefy euro. Propozycja nowego Europejskiego Systemu Walutowego i
nowej roli dla Europejskiego Banku Centralnego”, Stefan Kawalec and Ernest
Pytlarczyk (2013-06-28)
