Nordea Said to Hire BofA to Explore Sale of Polish Unit
Nordea Bank AB (NDA), Scandinavia’s largest bank, hired Bank of America Corp. (BAC) to explore the possible sale of its Polish unit Nordea Bank Polska SA (NDA), two people with knowledge of the matter said.
BofA asked banks including PKO Bank Polski SA (PKO), Bank Pekao SA (PEO) and BNP Paribas SA (BNP) whether they were interested in buying the unit, based in the northern port city of Gdynia, said the people, who asked not to be identified because the information isn’t public. Nordea Bank’s decision to hire BofA for the possible transaction was reported by newspaper Dziennik Gazeta Prawna earlier today.
Foreign banks operating in Poland are facing increased competition and lower revenue from lending after demand for goods and services fell. Growth in the European Union’s biggest eastern economy may slow to 1.5 percent this year, the weakest since 2002, according to central bank forecasts.
Erik Durhan, a spokesman for Nordea Bank in Stockholm, declined to comment on the matter when contacted by Bloomberg. Joanna Krawczyk-Golba, Nordea Bank Polska’s spokeswoman, didn’t return calls made to her office. Elzbieta Anders, spokeswoman for PKO in Warsaw, and Katarzyna Karpiuk, a spokeswoman for Pekao, declined to comment. Victoria Garrod, spokeswoman for BofA in London, said she had no immediate comment.
Nordea Bank Polska, in which its parent owns a 99.2 percent stake, jumped 24 percent to 30.3 zloty at 5:04 p.m. in Warsaw, the biggest increase since 2007 and valuing the company at 1.68 billion zloty ($528 million). PKO, Poland’s biggest bank, is worth 43.7 billion zloty, according to its share price.
European banks are also revisiting their growth strategies in Poland and other emerging markets as higher capital requirements make it tougher for them to support none-core operations. Nordea is among four Swedish lenders required to hold bigger capital buffers and must meet a minimum core Tier 1 capital ratio of 10 percent of risk-weighted assets this year, higher than peers in Germany, France and the U.K.
Nordea said last April that it would reduce staff in Poland by 20 percent and cut branches to about 135 from 193. It said in 2010 that it planned to have 400 branches and double its market share to 8 percent. Citigroup Inc., DNB ASA (DNB), Norway’s biggest bank, and BNP Paribas have announced similar plans to pare their operations in the country.
Operating profit at Nordea Bank Polska fell to 78 million euros last year from 95 million euros in 2011. Net loan losses swelled to 37 million euros from 14 million euros.