News Parkiet

Insurance

PZU Życie executives in the spotlight

over possible violations

Senior executive at PZU Życie life insurer has broken Polish laws that restrict board membership at state-owned firms. Jerzy Kochański, PZU Życie?s deputy chief executive, sits on the board of four other companies, including three Grupa PZU subsidiaries. His boss, chief executive Bogusław Kasprzyk serves on board of two PZU units, plus publicly traded Netia, a telecommunications company.

By law, senior managers at all state-owned corporations cannot serve on board of more than one other company that is either directly or indirectly controlled by the government. The law was passed in March 2000 to restrict management compensation and limit abuses of corporate governance standards at state-owned firms.

On average, executive-level managers at PZU Życie make almost 360.000 zloty ($99.000) a year.

Banking

PKO BP promises higher earnings,

dividends

Bank PKO BP, Poland?s biggest lender by assets, expects stronger earnings next year, chief executive Andrzej Podsiadło said in an interview yesterday. State-owned bank, which is planning an IPO on Warsaw Stock Exchange later this year, also announced it will start paying 20 to 40 percent of its profits as dividends to shareholders. PKO BP reported record earnings of 1.23 billion zloty ($333 million) last year. First half earnings rose 17 percent to PLN 844 million.

Podsiadło refused to talk about IPO details citing exchange regulations, but said he expects strong demand from investors regardless of the price. PKO BP may complete ten for one stock split before the offering, this year?s largest, to encourage retail investors to participate.

Banking

Raiffeisen Bank Polska unveils expansion

plans

Warsaw-based Raiffeisen Bank Polska wants to become Raiffeisen group?s third most profitable subsidiary, unit chief executive Piotr Czarnecki told PARKIET in an interview. The lender, currently Raiffeisen?s fourth largest subsidiary in terms of profits, hasn?t decided yet on whether to list its shares on the WSE, Czarnecki said. Polish media reported earlier Raiffeisen?s IPO on Warsaw Stock Exchange could be worth as much as one billion euros.

Raiffeisen Bank Polska?s first-half earnings have doubled to PLN 67.4 million. Return On Equity rose to 18 percent.

Commenting on future expansion plans, Czarnecki said Raiffeisen Bank Polska wants to increase its retail operations by as much as 30 to 40 percent a year. It now has 125.000 retail customers.

Mergers with other banks are unlikely, Czarnecki said. ?As far as the biggest banks, their market capitalization is too high. We have no intention of paying a premium, we would rather keep growing on our own.?

Construction industry

Pekabex hits new lows

Retail investors are bailing out from Pekabex SA, a small, nearly bankrupt concrete-maker and building contractor from Poznań, Western Poland. Shares of the company fell about 80 percent in just four months to 0.37 grosze yesterday as its net assets turned negative at the at of the second quarter. Major shareholders of Pekabex, including its CEO Szczepan Kowalski, are refusing to discuss their company?s survival strategy.

Manufacturing

Powen to delist publicly traded subsidiary

Polish Securities and Exchanges Commission has agreed to delist Wafapomp SA, an industrial pump maker from Warsaw at the request of Powen group, its main shareholder. Minority investors, headed by the Polish Association of Individual Investors (SII) threatened to go to court to block plans to take the company private, claiming that Powen?s buyout offer of 6.75 zloty per share is too low. Wafapomp?s book value is more than 12.5 zloty per share. Sources at the SII say Powen, which has about 85 percent of Wafapomp, said it ?doesn?t exclude? a higher offer once its subsidiary is taken private. The s

Wood industry

Barlinek to raise equity

Barlinek SA, one of Poland?s largest maker of wood flooring panels, has announced plans to raise equity in a private placement to Polish businessman Michał Sołowow. Barlinek, which is scheduled to go public in the spring of next year, wants to use the proceeds to complete construction of a production plant. Sources at the company told PARKIET that IPO proceeds will be used to build yet another, 150-million zloty production facility.