Unicredito sells stake in Poland's New BPH to GE Money for 625.5 mln eur UPDATE - Forbes.com

Unicredito sells stake in Poland's New BPH to GE Money for 625.5 mln eur

Italy's Unicredito Italiano SpA has agreed today to sell a 66 pct stake in Poland's third biggest bank, BPH, to General Electric unit GE Money for 625.5 mln eur, the group said.

Analysts had expected UniCredit to get 1.0-1.5 bln eur from the deal, which still needs approval from Polish regulators.

The sale opens the way for UniCredit, which also owns Poland's number two lender Pekao, to merge its two local units by year's end.

The Italian group had promised Poland's conservative government it would sell the BPH brand, 200 out of 485 of its branches, and other assets as a condition for completing the BPH's tie-up with Pekao, which would create Poland's largest bank by assets.

'I have always said BPH is a good platform to enter the dynamic Polish banking market,' Luigi Lovaglio, Pekao's deputy chief executive in charge of the Polish units' merger, said on the sidelines of a news conference in Warsaw.

The GE acquisition includes BPH mutual fund unit, which at the end of 2006 had 1.8 bln eur of assets under management.

Based on end-2006 pro forma data, New BPH had total assets of 2.2 bln eur and net credits of 1.4 bln.

The transaction will be completed by end-2007 following the registration of the spin-off of part of the Bank BPH business into Bank Pekao, expected by October, according to slides presented to analysts.

Explaining the transaction, Unicredito CEO Alessandro Profumo noted that the stake sold, or 200 branches, had a net profit of 7 mln eur against the 324 mln eur net profit of the 285 branches that Unicredito kept.

Profumo also said the part sold had a cost/income ratio of 86.0 pct against 35.3 pct for the branches the Italian bank kept.

Total assets in the part of BPH bank that will be spun-off into Pekao totaled 14.7 bln eur at the end of 2006.

Overall, Profumo said, 'we think that we've done a good deal'.

Source: AFX