January 16, 2018 / 7:16 PM / a year ago

UPDATE 1-Regulator rejects Raiffeisen's plan for new bank in Poland

(Adds Raiffeisen CEO comment, more detail)

WARSAW, Jan 16 (Reuters) - Poland’s financial market regulator said on Tuesday it would not approve a plan by Austrian bank Raiffeisen Bank International to set up a new bank in Poland.

RBI wanted to create the new bank to take on a batch of mainly Swiss franc-denominated loans from its existing Polish bank Raiffeisen Bank Polska.

RBI was due to list Raiffeisen Bank Polska to comply with the Polish regulator’s requirement that large banks in Poland list their shares to assure transparency and safety of the sector.

Last year, the IPO plan was shelved as investors offered a much lower price for Raiffeisen Bank Polska’s shares than Raiffeisen was willing to accept. This was partly because of its Swiss franc-denominated loan portfolio, which is seen by some investors as a long-term risk and means the bank must hold more capital.

Two sources familiar with the situation said on Tuesday that RBI had planned to create the new bank to take over the FX portfolio from Raiffeisen Bank Polska which could help to make IPO of Raiffeisen Bank Polska successful.

But the Polish regulator said it would not endorse the plan.

“The commission has unanimously refused to issue an approval to launch by Raiffeisen Bank International a bank in a form of a joint-stock company,” the regulator said in a statement.

The regulator pointed to RBI’s failure to meet requirements to list Raiffeisen Bank Polska on the Warsaw Stock Exchange.

RBI said its plan aimed to facilitate the IPO of Raiffeisen Bank Polska or a potential sale of a majority stake. “We continue to work with the KNF to find an acceptable structure,” it said.

RBI Chief Executive Johann Strobl said the decision meant this specific kind of carve-out for the loan portfolio was no longer an option, but there were other ways it could split the core bank in Poland from the Swiss franc loan portfolio.

“If we have a buyer, we can carve out the core bank so that the foreign currency portfolio remains, if they want,” he told reporters on the sidelines of a Euromoney conference on Central and Eastern Europe.

That was just one option, and both an IPO and a sale of the Polish unit remained possible, he said.

In November, sources said that BNP Paribas had approached RBI to express interest in buying the Austrian bank’s Polish division.

Reporting by Agnieszka Barteczko and Pawel Sobczak,; Additional reporting by Alexandra Schwarz-Goerlich and Francois Murphy in Vienna; editing by Louise Heavens and Jane Merriman

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