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Societe Generale to possibly sell Eurobank: Reuters
Posted on Wednesday, 13 June 2018 12:46
French bank Societe Generale is contemplating a sale of its Polish unit Eurobank, according to Reuters. Citing two investment bankers, the news provider said increased pressure from competitors could be a factor behind the possible divestment. Societe Generale declined to comment on the report. Reuters noted that Poland’s Law and Justice Party’s emphasis on the importance of domestic ownership has resulted in an increase in consolidation within the banking sector in recent years. According to the news provider, Eurobank is the 17th largest bank in Poland and is more than 20 times smaller than the country’s biggest lender, PKO Bank Polski, with a net profit of PLN 103.00 million (EUR 25.00 million). Eurobank’s smaller stature in the banking market has made it harder to compete with bigger banks, due to the country’s low interest rates, which have historically narrowed lenders’ margins, according to Reuters. Societe Generale has stated it could sell or close smaller subsidiaries which do not generate sufficient returns. Poland’s government has also announced its presence on the banking market, with state entities purchasing a 32.8 percent stake in Bank Pekao, the second-largest lender in Poland, from Italy’s UniCredit in June 2017. The PLN 10.60 billion deal has enabled the government to claim that Polish ownership within sector rose to 55.0 percent as a consequence. There is no clear buyer for Eurobank, but Reuters cited banking sources as saying PKO Bank Polski may be interested in a takeover, while other sources have named French bank Credit Agricole as a potential candidate. Phillipe Brassac, chief executive of Credit Agricole said the company’s priority is organic growth in Poland. PKO BP has added that it wishes to grow organically, but would be receptive to other offers. © Zephus Ltd