Two local banks merge

Two major Polish banks, Pekao S.A. and BPH S.A., have merged to form the biggest bank in Poland and in this part of Europe.
The new bank, also called Pekao S.A. and formally created on Dec. 1, has assets of about 120 bln zloty.

The value of the whole transaction is put at 625.5 mln euro.
The entire merger process is to be completed in the first quarter of 2008. Prior to the merger, BPH S.A. was divided into two parts. The larger portion – consisting of 1.5 mln bank accounts, 285 banking branches, more than 300 partner agencies and more than 600 cash machines – was acquired by Pekao S.A.

The remaining part of BPH S.A – namely 650,000 customers, 200 branches, a brand, and investment funds outside Pekao S.A. – exists now as a minor bank and is scheduled to merge with American GE Money group next year. The new, larger Pekao S.A is now governed from Vienna, as it belongs to HVB and UniCredit group, an Austrian-Italian banking group, but it seems that BPH S.A. is the bank with better results in acquiring clients, sales dynamics and overall financial results.

According to data from the last three weeks, only 3,000 customers decided to close their accounts in BPH S.A. because they were unhappy with the merger. Employees of BPH were neither to encourage nor to discourage clients from changing banks, and all of the employees were trained to introduce the Pekao proposal to customers even before the merger.

Jan Bielecki, the president of Pekao S.A., said that under one common emblem, Pekao S.A. now operates a bank that has more than 5 mln retail clients, more than 300,000 business clients and more than 15,500 corporate clients.

The process of transferring all these customers into a new information technology system will begin in January.
Vice President of Pekao S.A, Luigi Lovaglio, pointed out that UniCredit is one of the three biggest banking groups in Europe.

The new Pekao S.A. has the biggest market capitalization in the region, 17.8 mln euro; the biggest fund value, 120.5 bln zloty, and a total of 68 bln zloty in loans. Lovaglio added that the new Pekao S.A. is preparing marketing plans for clients, tailoring them to particular regions.

It is planned that new mortgage and retail loan offers will be presented in the first quarter of the new year.

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