Millennium Drops to 18-Month Low as BCP Sells $332 Million StakeMarta Waldoch
Bank Millennium SA fell to the lowest level since September 2013 after its majority owner Banco Comercial Portugues SA sold a 1.24 billion-zloty ($332 million) stake in the Polish lender to boost its own capital.
The stock lost as much as 10 percent and closed 9.1 percent down at 6.7 zloty in Warsaw. The Portuguese bank sold 187 million shares on the Warsaw Stock Exchange at 6.65 zloty each, cutting its holding to 50.1 percent from 65.5 percent, it said in an e-mailed statement Thursday.
The transaction is the biggest bank share offering in Poland since Banco Santander SA’s $1.2 billion sale of a stake in Bank Zachodni WBK SA in March 2013. It comes as the country’s financial supervisor is in talks with domestic lenders on how to help Swiss franc-denominated mortgage holders repay their debt after the zloty slumped this year.
“The timing of the transaction is a surprise,” Iza Rokicka, an analyst at Warsaw-based Ipopema Securities SA, said by phone. “There are talks right now on how to solve the Swiss-franc loan problem and there is no clarity on their impact on banks’ financial situation.”
Millennium, which has the highest proportion of Swiss-franc loans in its mortgage portfolio among Polish banks, is facing regulatory actions including a ban on a dividend payout. Its stock has been the second-worst performer in Warsaw’s banking index this year, losing 19 percent. Getin Noble Bank SA, another leading lender in foreign currencies, has lost 21 percent.
Lenders have come under government pressure to ease the pain for 565,000 households with franc loans, whose monthly payments increased after Switzerland let its currency appreciate on Jan. 15. Banks want the government to help finance support for troubled borrowers while the regulator proposed a voluntary conversion of loans at the current rate, with the resulting loss on franc appreciation being shared by banks and borrowers.
Banco Comercial plans to remain a “long-term majority shareholder” in Millennium, it said in the filing. Portugal’s biggest non-state-owned bank failed the European Central Bank’s stress tests and said on Oct. 26 that decisions taken last year by the bank were enough to cover the 1.14 billion-euro ($1.25 billion) gap identified in the exercise, which was based on 2013 accounts.
Its shares fell as much as 5.3 percent in Lisbon trading on Thursday.
JPMorgan Chase & Co. managed the sale, while PKO Bank Polski SA and Millennium’s brokerage acted as joint bookrunners, Millennium said in a statement late on Wednesday.