Italy''s Unicredito
Italiano SpA (UniCredit) will sell a 66-per cent stake in Poland''s third biggest
bank, BPH, to GE Money for €625.5 million ($861.2 million). The sale means
the regulatory authorities will allow UniCredit, which also owns Poland''s number
two lender Pekao, to merge its two local units by year''s end. The deal needs approval
from Polish regulators. The
Italian group had promised Poland''s conservative government it would sell the
BPH brand, 200 of its 485 branches and other assets, as a condition for completing
BPH''s tie-up with Pekao, which would become Poland''s largest bank in terms of
assets. The
price suggests that UniCredit was in a hurry to sell; analysts had expected the
group to get €1 billion to €1.5 billion from the deal. To
appease the regulators, the Italian lender earlier sold Croatian HVB Splitska
Banka, the country''s fourth-largest bank, to French rival Société
Générale SA for €1 billion. After
Polish regulators refused to clear at UniCredit''s plans to merge the country''s
second- and third-biggest banks, UniCredit agreed to sell 200 BPH branches and
not retrench any bankers until the second quarter of 2008. The
GE acquisition includes 49.9 per cent of the BPH mutual fund unit, which has €1.8
billion of assets under management. The 200 branches represent about 66 per cent
of BPH itself and have assets of €2.2 billion, net loans of €1.4 billion,
deposits of €1.2 billion, and shareholders'' equity of €400 million All
figures are for end-2006. The deal will be closed in end-2007 after the remaining
part of Bank BPH is merged into Bank Pekao, which is expected to be complete by
October. The
stake sold - 200 branches - had a net profit of €7 million against the €324
million profit of the 285 branches that Unicredito kept. Additionally, the part
sold had a cost to income ratio of 86 per cent against 35.3 per cent for the branches
the Italian bank kept. The total assets in the remaining part of BPH bank, which
will be merged with Pekao, totalled €14.7 billion. GE
already has 130 GE Money Bank outlets in Poland. It seems to be banking on Eastern,
rather than Western Europe. Last month, the conglomerate announced an auction
of its 36 retail Money Bank outlets in Austria, after they showed a return on
equity of just 10 per cent, half of the minimum GE demands. Its Austrian operations
employed 600 bankers, had 200,000 customers representing assets of €1.2 billion.
The company
also wants to sell its German Money Bank outlets after it failed to become
the country''s biggest retail bank, attracting just half a million customers. GE
sold its reinsurance business to Swiss Re AG for $7.8 billion last year. Analysts
say that GE regularly reviews the performance of individual units, and divests
underperforming subsidiaries.
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