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Bank Pekao SAPoland's state assets and finance ministers welcome decision on PZU and Pekao merger
The decision to merge listed insurance group PZU with listed lender Bank Pekao and create a new structure headed by Pekao is a positive one, Poland's minister of state assets Jakub Jaworowski told the European Financial Congress in Sopot. The finance minister Andrzej Domanski assessed that the assumption of Poland’s state-run insurer and Poland's second largest lender's merger freeing up to PLN 200 billion (EUR 47.1 bln of loan financing is "slightly conservative".
"We are talking about a radical increase in loan supply in Poland," Poland's finance minister Domanski told the conference in Sopot.
"(...) That is why I welcomed today the cooperation agreement between PZU and Pekao, as (...) this transaction could potentially free up PLN 20 bln of Tier 1 capital (...) on the basis of which it will be possible to create lending of even PLN 200 bln, and I think that these are even conservative estimates," he added.
Minister Domanski pointed out that this amount would allow doubling the balance of investment loans in Poland.
"This is an epoch-making event that can push the Polish financial market forward dynamically and can create enormous value for customers, shareholders and the economy," Poland's state assets minister Jaworowski told the same conference.
"I am talking about PZU and Pekao entering the path of creating a strong bancassurance organism, a new structure that will put the bank at the head of the group and thus end the unhealthy and unprecedented situation in the world where an insurer manages two competing banks," he added.
Minister Jaworowski said that he has been heavily involved in the talks and been expressing his support the decision to move towards this agreement.
"This is a step in the right direction," he assessed.
On Monday, listed insurance group PZU and listed lender Bank Pekao have signed a memorandum of cooperation regarding the reorganisation of the group and, in effect, the demerger of PZU through the spinoff of a holding company and an operating subsidiary. The PZU holding company will then be merged with Bank Pekao as the acquirer.
According to the memorandum, it is the intention of the parties to complete the potential transaction, i.e. the merger of Bank Pekao and PZU, following the spinoff of its operations, by June 30, 2026.
Both brands are to retain their identities, separateness and autonomy of operation in their business areas, just as they have for many years within the PZU group, but the new group will be headed by a bank rather than an insurer.
The demerger of PZU will take place through the spinoff of a holding company and a 100 percent subsidiary operating in non-life and other personal insurance. The PZU holding company will be merged with Bank Pekao and ultimately one company will be listed on the Warsaw Stock Exchange.
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