Erste finds Poland attractive and would like to have a unit there, Chief Executive Officer Andreas Treichl told analysts on a conference call today. What’s stopping him from buying is that Erste’s shares trade below book value, while Polish banks are valued at as much as twice their book value, he said.
“Given current price levels, both of our own stock and of the stocks in Poland, I guess we’re going to continue being interested in Poland for a pretty long time,” Treichl said. “We basically have a valuation problem. It’s not a very opportune time to enter into a transaction.”
Erste is still writing down goodwill at its Romanian unit, Banca Comerciala Romana, which it acquired at six times book value in 2006. It reported a fourth-quarter loss today because of the third Romanian impairment in 15 months.
Treichl told journalists in Vienna that the relative difference in valuation between Erste and Polish banks is wider than the difference between Erste and Banca Comerciala Romana was at the time of the acquisition. Erste’s price-to-book multiple peaked at 3.6 in 2006, according to data compiled by Bloomberg.
Alior Bank SA (ALR), which held Poland’s biggest initial public offering in 2012, may be for sale as its main shareholder, Carlo Tassara SpA, is working with UBS AG to sell at least 30 percent, three people familiar with the matter said last month.
Erste has declared its interest in the Serbian unit of nationalized Austrian peer Hypo Alpe-Adria-Bank International AG, Treichl said. It would buy the lender only at a “substantial discount,” he said.
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