Bank Pekao Eyes International Expansion

Polish Bank Pekao, which returned to majority Polish ownership in 2016 and currently operates only in its home country, has announced its intentions to expand internationally. Detailed information about the expansion should be available by the end of the first quarter of this year.

“We are analysing opening branches in London, New York and maybe Asia,” said Michał Krupiński, Pekao’s president, in an interview with Parkiet. “We are observing our clients interest – especially corporations – in being available on those markets.”

Pekao’s expansion is not likely to involve any acquisitions.

“In the aspect of mergers and acquisitions abroad, we do not expect significant activity. At the moment, the Czech Republic is the only market where we might find interesting acquisition targets,” said Mr Krupiński

According to Andrzej Kopyrski, vice-president of Pekao, one of the main goals of the bank’s refreshed strategy is to support Polish companies in the development of international business. And the element of this support will be the presence of the bank in key foreign markets from the point of view of clients. That is why they want to open branches firstly in New York and London.

“We estimate that Poles have opened tens of thousands of companies in the UK, part of which cooperate with contractors from Poland,” said Mr Kopyrski. “We want to be the first choice for these entrepreneurs. Representation in New York will be directed to larger companies that want to enter the American market. In the US there are a lot of investment opportunities that Polish companies could benefit from.”

Pekao was established at the end of 1929, and for the majority of its existence has specialised in international banking. At the end of the Second World War Poland’s communist government debated closing Pekao, but realised quickly that due to the influx of foreign currency coming into Poland from Polish emigrants, shutting the doors would not be wise. The bank introduced a special product for those emigrants that wished help their families financially, known as Pekao Parcels.

In the 1970s the bank kept foreign currency accounts, granted loans in foreign currencies for private citizens as well as state-owned companies. They also cleared international transfers, bought and sold currencies, foreign cheques and collection of these cheques. The bank was involved in financing and servicing the so-called Polonia companies.

From 1999 to 2016 Pekao’s majority shareholder was the Unicredit group. The Italian bank retains a 6 per cent share in Pekao, which currently uses Unicredit’s network to serve Polish companies operating abroad, mainly in Germany, Italy and Austria. Pekao is Poland’s second largest bank, with 170 billion zloty (41 billion euros) in assets.