Polish insurer PZU needs a strategy for holding stakes in two banks, the minister says

Poland’s biggest insurer PZU needs a strategy to deal with holding stakes in two banks, which complicates its valuation, the state assets minister said.

Globally, insurers are focusing on their core business and winding down banking operations, Jakub Jaworowski said in an interview with a small group of journalists.

State-controlled PZU is the largest shareholder of Pekao SA and Alior Bank, with 31.9% and 20% respectively.

It is problematic for PZU to own stakes in two banks that compete with each other in certain areas and makes it difficult for analysts to evaluate the insurer’s stock, Jaworowski said.

“The current situation in PZU, as I look at it a little bit as a consultant and based on some benchmarks, is unusual because other groups don’t have that kind of structure,” Jaworowski said.

“And it’s doubly extraordinary, and it looks like the current situation is not good for PZU for many reasons.”

He said it was up to PZU, not the government, to address the issue in a new strategy the insurer is working on.

Jaworowski also said that Poland has no plans for asset sales.

Asked whether the ongoing sale of Citigroup’s retail division to Polish lender Bank Handlowy was an opportunity to increase the government’s stake in the banking sector, Jaworowski said it would be difficult to justify.

“If such specific cases arise, we will look into them,” Jaworowski said.

“It’s very hard to imagine that happening now, because we’re already at such a high level of state participation in the banking sector that it would be difficult to justify further growth.”

(Reporting by Marek Strzelecki, additional reporting by Anna Koper; Editing by Barbara Lewis)

TOPICS
Carriers