Banco Santander buys out the Poznań-based bank BZ WBK

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Edited by: Ziemowit Mar 30, 11, 11:18 #1

The buy-out had been initiated as a result of the September 2010 agreement between the Irish Allied Bank [AIB] and Banco Santander of Spain in which the latter offered to pay more than 11.5 billion zloty to the AIB for slightly more than 70 per cent of shares in the Poznań-based BZ WBK [Bank Zachodni - Wielkopolski Bank Kredytowy] held by the AIB, if Santander calls for buying out of all the remainning shares.

The call has won an overwhelming response from the market resulting in 95.67 per cent stake now in possession of Santander. This means that pension funds as well as investment funds have decided to join those answering the call at the price of 226.89 zloty per share which ended Friday, 25th of March.

If Banco Santander wishes BZ WBK to remain in the listings of the Warsaw Stock Exchange, the Spanish bank would be expected to sell part of the acquired shares onto the market to reach the level of 25 per cent of stock in free float, a condition usually imposed on major publicly listed banks by KNF, the Polish Financial Supervision Authority.

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Mar 30, 11, 15:18 #2

Meanwhile, financial analysts are trying to resolve the following question: is Barclays too big for Britain or is it Britain which is too small for Barclays? Barclays' gross balance sheet is 100% of UK GDP, whereas that of JP Morgan, the US bank of a comparable size and a broadly comparable mix of retail, commercial and investment banking activities is only 24% of US GDP. JP Morgan has recently updated its target share price for one of the two biggest Polish banks, PKO BP, which it has left unchanged at 55 zl a share in one year from today. As plans for a secondary public offering have been announced for the bank's shares by the Ministry of Treasury and the state-owned bank BGŻ, the announcement prompted the analysts of Credit Suisse Securities to put the PKO BP bank on the list of 15 most prospective banks for the region of Central Europe, Middle East and Africa with a prognosis of its share value up to 52.5 zł in a year, a 20 per cent rise from the present quotation.

PennBoyThreads: 157 Posts: 3,440 Joined: Dec 7, 08 ♂	Mar 30, 11, 16:25 #3
Ziemowit: Banco Santander of Spain Didn't they say the Spanish had the best chances in buying it?

OlafThreads: 8 Posts: 1,369 Joined: Oct 29, 09 ♂	Apr 6, 11, 12:00 #4
They bought it actually.

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Edited by: Ziemowit Apr 8, 11, 13:35 #5

Indeed, they did. Today it is most interesting to read what Gerry Byrne, the director of AIB for the region of Central and Eastern Europe, had told the daily RZECZPOSPOLITA on the matter on the 17 December 2009. - We don't want to sell BZ WBK. We own assets in the US, Britain and Poland, but our intention is clear: we will keep our assets in Poland. First of all, we will keep BZ WBK since it is our most valuable foreign investment and at the same time a highly profitable one. The bank has effective capital, good liquitidy and builds up the strength of AIB. The bank is a very important part of our whole group and crucial from the perspective of the future profitability of the group.

- It would have been much more dificult for us to regain our financial strength without BZ WBK - said the manager in his interview of more than a year ago. - But you have to remember about this principle: never say never - he underlined, adding that it is impossible to predict market conditions in a few years' time.

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Were these market conditions so unfavorable for AIB or was the Irish bank so weak that it had no choice but to sell its Polish assets to survive?

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Apr 8, 11, 13:40 #6

Ziemowit:

Were these market conditions so unfavorable for AIB or was the Irish bank so weak that it had no choice but to sell its Polish assets to survive?

Pretty much. The Irish government had no choice but to sell BZWBK - they needed the cash to inject into AIB, and their hand was really forced.

Either way, this is the worst possible deal for BZWBK employees - Santander have a long established model of moving into a new market, rebranding after a while, then culling all the back office jobs and sending the jobs to Spain instead. On the other hand, it does mean that Poland has another large, stable bank.

VarsovianThreads: 91 Posts: 568 Joined: Nov 23, 06 ♂	Apr 8, 11, 16:53 #7
AIB is bust - for example, they're willing to take huge penalties in the UK just to release capital. Santander was already here, but it's easier to buy someone else's customers than get your own. That said, Santander itself is terribly exposed to the Spanish real estate market ...

grubasThreads: 20 Posts: 1,452 Joined: Feb 1, 10 ♂	Apr 8, 11, 17:24 #8
Varsovian: AIB is bust And which Irish bank isn't?

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