WOOD Flash – Bank Pekao: resolution of Idea Bank announced on 31 December 2020
Bank Pekao is to acquire certain assets and liabilities of Idea Bank, as a result of the application of the resolution tool by the BFG, announced on New Year’s Eve. We expect a somewhat negative market reaction in the case of Bank Pekao, but we also see a crossread for the other Polish banks. We see it as negative for Alior Bank’s shares, as we believe that its current market valuation might have included some takeover premium, due to a potential acquisition by Bank Pekao. It is also negative for PZU, on the margin. We had hoped for the integration of the two banks under the PZU umbrella and, therefore, some tidying up of the group structure and material cost synergies. Instead, we see a third bank, with a cumbersome integration process attached, which could yield incomparable, lower synergy effects instead. However, we see it as a positive catalyst for the Polish banking sector as a whole, as it removes the huge uncertainty diagnosed by the market a long time ago, and we assess the financial cost for the sector as less than could have been feared, with the risk staying unaddressed, in previous quarters. This positive impact may be hindered somewhat, if the financial stability risks spill over (e.g., deposit outflows) onto Idea Bank’s sister bank, Getin Noble Bank, which is also controlled by Leszek Czarnecki.Bank Polska Kasa Opieki (the Bank) is a commercial bank providing a range of banking services, mainly in Poland. The segments of the Bank are as follows: Retail banking, which comprises all banking activities related to retail customers and small and micro companies; Private banking, which comprises all banking activities related to the affluent individual customers; Corporate and Investment banking, which comprises all banking activities related to the companies, interbank market, debt securities and other instruments; and Assets and Liabilities Management and other, which is engaged in the supervision and monitoring of fund transfers, and other activities centrally managed.
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