March 14, 2018 / 3:34 PM / 9 months ago

BNP in final stages of talks to buy RBI's Polish arm: source

WARSAW (Reuters) - BNP Paribas (BNPP.PA) is in the final stages of talks to buy Raiffeisen Bank International’s (RBI) (RBIV.VI) Polish business, a senior banking source said on Wednesday.

A company logo is pictured on BNP Paribas bank in Geneva, Switzerland, October 17, 2017. REUTERS/Denis Balibouse

Reuters reported last year that France’s BNP, which already owns Poland’s Bank BGZ BNP Paribas (BGZ.WA), had expressed an interest in buying Raiffeisen Bank Polska (IPO-RBP.WA), also known as Raiffeisen Polbank.

“It looks like BNP will buy Polbank. The decision will be taken within 2 weeks, at the beginning of April at the latest,” the source said, speaking on condition of anonymity.

Bank BGZ BNP Paribas CEO Przemyslaw Gdanski said on Wednesday he would normally present a new strategy at this time of year, but he had delayed this as the bank was considering its growth options on a “very fundamental” level.

“We must wait a few more weeks, then we will have clarity regarding the main directions of growth the bank will pursue,” Gdanski told reporters.

Asked directly about Polbank, Gdanski said “we are looking at the market, considering various options which could support our growth plans in Poland,” adding it was safe to say the bank would specify its plans in April.

“Our position in Poland, as the 6th (largest bank) is incompatible with the position of the second largest bank in Europe,” he said, referring to parent company BNP.

The potential deal assumes Polbank’s Swiss franc loan portfolio will stay with RBI, sources have told Reuters. Many Polish banks have struggled with exposure to Swiss franc loans, which became more expensive for customers to finance when the Swiss central bank unexpectedly lifted its cap on the currency.

Polbank has a book value of 6.49 billion zlotys ($1.91 billion) and assets of 48.97 billion zlotys. Its Swiss franc mortgage portfolio totals around 9.7 billion zlotys.

A separate source from the Polish financial market said the regulator would likely give a green light for BNP Paribas if it decided buy Polbank, on condition that Austria’s RBI kept the Swiss franc loans on its books.

RBI reiterated on Wednesday it was still planning to float the Polish business, or to sell a majority stake in its main banking operations.

“From what we hear talks between Frenchmen and Austrians are still being conducted and are progressing in a direction of a deal,” said a Polish bank executive who declined to be named.

Another Polish bank executive said BNP Paribas was determined to buy Polbank. Three bankers pointed to the level of around 1.0 to book value or tad lower as the most probable price BNP will pay for Polbank assets.

($1 = 3.4021 zlotys)

Writing by Marcin Goettig; Editing by Justyna Pawlak and Mark Potter

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