Poland Shuffles PKO's Board to Strengthen Grip Over Biggest Bank

  • Shareholders replace 7 out of 9 supervisory board members
  • Treasury Minister said CEO Jagiello's job is safe for now: PAP

PKO Bank Polski SA said its shareholders replaced seven out of the supervisory board’s nine members as the government tightens its grip over the country’s largest lender.

Poland’s government, which holds a controlling 31.4 percent stake in PKO, passed a motion to exchange five of its representatives on the board during an owners’ meeting in Warsaw on Thursday. Two new members backed by pension funds were also elected to the board. The shareholders also agreed to extend the board’s right to appoint top managers without the chief executive’s recommendation, as well as dismiss them more freely.

Taking a cue from previous administrations, the cabinet of Prime Minister Beata Szydlo, has set its eyes on state-controlled companies since taking office in November. Similar decisions as those made at PKO’s shareholder meeting were the first steps toward changing managements at other state-run companies, including PKN Orlen SA, the country’s largest refiner, insurer PZU SA as well as the Warsaw stock exchange.

The government has no plans to change the bank’s management “for now” and awaits the supervisory board’s view on the matter, PAP newswire reported on Wednesday, citing Treasury Minister Dawid Jackiewicz.

Zbigniew Jagiello, 52, who has been PKO’s CEO for six years, may keep his post as he is backed by Deputy Prime Minister Mateusz Morawiecki, Newsweek magazine reported on Feb. 1. However, that didn’t shield him from criticism by ruling party lawmakers during a parliamentary inquiry into the reasons behind PKO’s decision to increase fees. The additional costs for the bank’s customers coincided with the introduction of a new tax on lenders, which will siphon off about a third of last year’s profit from the industry.

Shares of PKO gained 1.4 percent to 24.65 zloty at 12:53 p.m. in Warsaw. The bank has lost 9.8 percent this year, trailing a 1.1 percent decline in Warsaw’s WIG20 Index.

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