UniCredit Nears Sale of Partial Stake in Poland's Bank Pekao -- Update
October 14 2016 - 2:12PM
Dow Jones News
By Martin M. Sobczyk in Warsaw and Giovanni Legorano in Milan
Italy's UniCredit SpA has agreed on key parameters to sell the
bulk of its controlling interest in one of Poland's largest banks
to state-controlled Polish insurer PZU SA for nearly $3 billion,
people familiar with the matter said Friday.
Under the proposed transaction, PZU would pay about 11 billion
zlotys ($2.8 billion) for about 30% in Bank Pekao SA, the people
said.
UniCredit, which has been eager to raise cash and bolster
capital levels in recent months, would keep an interest of about
10% in Pekao, they said.
A UniCredit spokeswoman and PZU declined to comment. Bank Pekao
didn't respond to requests for comment.
If completed, the transaction would mark a further step in the
electoral pledge Poland's conservative government has made to
regain control over the country's banking industry. With about 60%
of the sector's assets in foreign hands, the government has long
complained that mostly resilient Polish banks are unnecessarily
exposed to bouts of market turmoil and an occasional credit crunch
in the heavily indebted eurozone.
The Pekao takeover by PZU, in which Poland holds a 34.2% stake,
would reduce foreign ownership of the banking sector well below
50%.
UniCredit's management is looking to carry out asset sales
before unveiling a strategic plan on Dec. 13. Proceeds from the
sale are expected to lift the Italian lender's share price, a
welcome boost ahead of a hefty cash call which is likely to be the
corner stone of UniCredit's plan.
By the same token, shedding assets will also allow UniCredit to
raise a smaller proportion of the capital it needs to shore up its
financial position by issuing new shares.
At the end of the second quarter, UniCredit's common equity Tier
1 ratio--a measure of the bank's capital solidity -- stood at
10.51%, very close to regulatory requirements of 10% and lower than
the 12.7% boasted by Italian rival Intesa Sanpaolo SpA.
Write to Martin M. Sobczyk at martin.sobczyk@wsj.com and
Giovanni Legorano at giovanni.legorano@wsj.com
(END) Dow Jones Newswires
October 14, 2016 14:57 ET (18:57 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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