WARSAW May 17 The net loss for the Polish unit
of Raiffeisen IPO-RBP.WA rose more than sevenfold in
the first quarter, year-on-year, casting further doubts over the
success of the bank's initial public offering planned for this
Raiffeisen Polbank said on Wednesday its net loss widened to
76 million zloty ($20.15 million) in the first quarter from 10
million zloty a year earlier, mainly because of a write off for
the value of the Polbank brand.
Since buying Polbank and merging it several years ago, the
profitability of Raiffeisen, now Poland's 10th lender by assets,
have worsened, analysts said.
Losses suffered in the first quarter are another sign that
the bank may face difficulties conducting its IPO. It is to
float 15 percent of its shares by June-end.
The stake is worth $255 million, taking into account that
the bank's book value is 6.4 billion zloty. Raiffeisen has
promised the Polish regulator KNF to conduct an IPO or find an
investor for its Polish arm.
It failed to strike a deal with an investor, so the IPO is
imminent, despite the fact that the bank has toxic FX assets --
a huge portfolio of unprofitable Swiss franc-denominated
mortgages -- which implies a discount in IPO.
"It is obvious that the price will be lower than the book
value. There were some talks about P/BV at 0.7, but it will all
depend on discussions with investors," a source close to IPO
Recently, another lender stiffed with Swiss franc credits,
Getin Noble Bank, asked its main shareholder to buy its
new shares at a price two times higher than the market price and
explained that the public offering failure risk was too high.
"(The Raiffeisen IPO) will be a difficult transaction, as
Raiffeisen doesn't bring any new value. If someone wants to have
a bank with Swiss franc-denominated mortgages he can buy listed
Millennium or Getin," a deputy CEO of a rival bank said.
The source close to IPO noted that Raiffeisen Polbank had
said recently it would "fire 900 people, close down number of
outlets and pledged to cut the cost base by 200 million zloty".
($1 = 3.7705 zlotys)
(Reporting by Marcin Goclowski; Additional reporting by Pawel
Florkiewicz Editing by Jeremy Gaunt)