WARSAW (Reuters) - Poland’s biggest bank PKO BP (PKO.WA) has shortlisted insurance firms that may buy around 50 percent of its newly-acquired insurance business, part of plans to diversify into higher margin areas in Poland’s overcrowded financial sector.
The state-controlled bank will also sell a stake in its card payment business, eService, which, together with the insurance stake sale, would add to profits in the next financial year, managing director Pawel Borys told Reuters in an interview.
“We are choosing a partner for our bancassurance business,” Borys said. He said this decision would be made in the third and fourth quarters and the transaction could be finalized in the first quarter of 2014.
The search for an insurance partner follows PKO’s first ever takeover deal last month when the bank purchased Poland’s tenth-largest lender Nordea Bank Polska NDAP.WA and its insurance business from Sweden’s Nordea (NDA.ST) for 2.83 billion zlotys ($852 million).
PKO has long been touted as potential consolidating force in Poland’s financial services sector, where foreign players dominate and margins are under pressure because of record low interest rates.
Analysts view PKO’s insurance joint-venture plans as similar to a partnership between Banco Santander’s (SAN.MC) Polish unit BZ WBK (BZW.WA) and British insurer Aviva (AV.L), which included BZ WBK getting a 10-percent stake, worth 500-600 million zloty, in Aviva’s local business.
Poland’s insurance sector is dominated by the state-controlled PZU (PZU.WA), eastern Europe’s No.1 insurer.
Borys said around 200 million zlotys should come from the stake sale in PKO’s eService card business, where it wants to retain a minority holding. There is already a shortlist of bidders.
“The closing of the transaction and its influence on our results will most probably happen at the beginning of next year,” the director said.
PKO has said its Nordea deal would add 255 million zlotys to its net profit next year. This would mean a seven percent addition to the 3.56 billion zlotys bottom line expected by analysts in 2014.
PKO has done enough M&A for the moment.
“PKO for the time being has no plans, either domestically or abroad, when it comes to bank takeovers,” Borys said.
“We’re eyeing smaller transactions in the local segments of leasing and asset management.” ($1 = 3.3226 Polish zlotys)
Writing by Adrian Krajewski. Editing by Jane Merriman