PZU and Pekao announced on Monday that the companies had concluded a letter of intent regarding, among other things, the purchase by Pekao of the shares of Alior Bank held by PZU.
– Bank assets do not burden us – they were a challenge, an operating model that was not optimal. (…) Banks in which we have a significant share (…), we see a lot of synergy in both institutions – said Artur Olech, president of PZU, during the conference, discussing the concluded letter of intent regarding the reorganization of banking assets within the group.
– We would like the process to be completed with appropriate contracts and obtaining approvals by mid-year, but at the same time we want to leave room for the management boards of both banks to focus on the core business and create value for shareholders (…). We do not decide what the final scenario will be, he added.
Read also: “Several scenarios” regarding two large banks
Pekao may purchase shares of Alior Bank
One of the considered scenarios assumes that the reorganization will involve Pekao purchasing the shares of Alior Bank held by PZU.
– The form of cooperation and finding synergy is an element of the work of bank management boards in the perspective of a year and the direction in which we should go – said the president. He added that “the solution that will be developed will be good for all shareholders.”
As explained by the president, as part of its strategy, the group pursues the goal of reducing complexity. The group wants to use part of the capital released as a result of the transaction for its core activities.
– We do not hide the fact that we want some of the money and capital released to return to the Polish economy, but not directly, that we are buying a bank, but in instruments proven in Western Europe that enable us and our shareholders to earn and achieve a good return on capital while lower risk and better diversification than in the case of having a single large position in a medium-sized universal bank. Today we are thinking about how to get better, safer, and with similar returns on this money – said JarosÅ‚aw Mastalerz, president of PZU Å»ycie.
– If such a transaction were to take place, additional profit would be generated on the individual side of PZU, which, if we compared it to today's valuations of the entity, would be worth over PLN 1 billion. On the consolidated side, this transaction would be completely neutral in terms of results – added Tomasz Kulik, member of the management board.
As Kulik explained, PZU wants to reinvest funds and optimally engage capital.
“We promised that in 2027 the regular dividend should not be lower than PLN 4.5 per share. It will certainly be difficult if such a large capital element leaves our balance sheet. So we will definitely reinvest some of it. We will decide when the time comes,” said the board member.
PZU's new strategy
On Monday, PZU published its strategy for 2025-27. In the presentation, the insurer stated that the sale of Alior shares to Pekao is plannedto generate value for the PZU group and other shareholders of both banks. As stated, settlement in cash is expected.
PZU's presentation shows that the sale and purchase agreement is planned to be signed in the first half of 2025, and the target value generation model will be developed by the end of 2025.
PZU announced that he had been released the capital can be allocated to the development of the group's business and the transformation of the economy. The mentioned investment directions are: development of strategic partnerships in Poland and abroad, including distribution, bancassurance and embedded insurance; development of the health area; participation in financing the transformation of the Polish economy.
Moreover, as PZU reported, simplifying the group's structure will result in increased transparency for investors and simplified governance. The PZU Group has 31.91 percent. in the share capital of Alior Bank. In Bank Pekao, PZU's share in the shareholding is 20%.
President Artur Olech announced that PZU does not want to increase its share in Bank Pekao.
Main photo source: Elzbieta Krzysztof/Shutterstock