Polish Insurer PZU Needs Strategy for Ownership of Stakes in 2 Banks, Minister Says

Poland’s biggest insurer PZU needs a strategy to tackle its ownership of stakes in two banks, which is complicating its valuation, the state assets minister said.

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

State-controlled PZU is the largest shareholder in 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 some areas and makes it challenging for analysts to value the insurer’s shares, Jaworowski said.

“The current situation in PZU, as I look at it a bit as a consultant and based on some benchmarks, is unusual because other groups do not have such a structure,” Jaworowski said.

“And it is doubly extraordinary, and it seems that 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 Poland had no plans for asset sell-offs.

When asked if the ongoing sale of Citigroup’s retail arm in Polish lender Bank Handlowy was an opportunity to increase the government’s share in the banking sector, Jaworowski said that would be hard to justify.

“If any such specific cases arise, we will analyze them,” Jaworowski said.

“It is very difficult to imagine that something like this would happen now, because we are already at such a high level of state participation in the banking sector that it would be difficult to justify a further increase.”

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