Published: June 13, 2013
Scandinavian group divests US$877mn-worth of Polish business.
PKO Bank Polski, the Polish state-owned outfit, has acquired a significant portion of Nordea Bank AB’s business in the country.
According to a press release, the acquisition encompasses Nordea Bank Polski, Nordea Finance, Nordea Polska TUnZ and a portfolio of Polish blue-chip corporate loans equating to 2.8bn zloty (US$877mn) in total. The transaction is subject to regulatory approval.
For PKO Polski, the acquisition will increase the scale of its operations by 16% and earnings-per-share by 10%. In the largest cities its sales network will grow by 25% and its affluent clients segment by 8%.
The acquisition of Nordea Polska TUnZ will give it a foothold in ‘bancassurance’, which has flourished in European markets such as France and Italy, and is a key part of PKO Bank Polski’s growth strategy. Nordea Finance Polska, which offers financial leasing and factoring for corporates, will be consolidated within PKO’s capital group.
Nordea Bank has agreed to provide US$4.8bn funding for mortgages denominated in foreign currencies for a period of seven years. It will also cover 50% of the cost of risk on the mortgage loan portfolio above an annual level of 40bps, for a period of four years.
The acquisition should bring the level of Polish capital in the domestic banking asset base to more than 40%, reducing the level of foreign currency risk. It will also help boost PKO Bank Polski’s already strong capital buffers. The acquisition is expected to be finalised at the end of 2013/start of 2014.