Impact on ratings of Alior share sale to Pekao to be assessed once negotiations are completed - Fitch

"The potential acquisition of a minority stake in Alior Bank by Pekao could increase the diversification of the bank's business but weaken its capital buffer. However, the impact on the ratings of both Pekao and Alior will not be clear until the parties agree on the terms and form of the group's reorganisation," the commentary wrote.

On December 2, PZU insurer published its strategy for 2025-27. In the presentation, the insurer said it planned to sell Alior shares to Pekao to generate value for the PZU group and other shareholders of both banks.

PZU said that a sale and purchase agreement is planned to be signed in the first half of 2025, with a target value generation model to be developed by the end of 2025.

PZU Group has 31.91 percent in the share capital of Alior Bank.

Fitch assesses that Pekao is well placed to fund a potential acquisition in cash.

"If the transaction takes place, the consolidation of Alior's assets would strengthen Pekao's underrepresented position in the SME and unsecured retail lending segments," it wrote.

"There is no certainty that negotiations will conclude on a transaction and current information is insufficient to reliably estimate the potential financial impact for Pekao," it added.

Fitch said that it will assess the rating implications when PZU and Pekao announce the outcome of the negotiations, including the financial terms, as well as the accounting treatment of the transaction.

doa/ han/