Pekao, one of Poland’s largest banks, is considering setting up a branch in Lithuania to work exclusively with corporate clients. Four sources confirmed this to BNS. According to them, the bank’s final decision is still pending.
The bank itself has not yet made its plans public. “We do not comment,” Pekao, which is listed on the Warsaw Stock Exchange, told BNS.
The bank will have to seek permission from the Lithuanian Central Bank to set up a branch in Lithuania. Pekao recently received permission from the Polish Financial Supervision Authority to provide services in the European Economic Area (EEA) without opening a branch.
At the same time, Poland’s largest bank PKO, also listed on the Warsaw Stock Exchange, officially confirmed to BNS that it intends to start operations in Lithuania, but without establishing a branch in the country. The bank said it had already informed the Supervisory Commission of its intention to carry out cross-border operations in Lithuania.
According to the sources, both banks would finance businesses, most likely Polish companies that intend to expand or start operations in Lithuania, in particular in the renewable energy sector. According to the sources, if the business is successful, PKO would also consider setting up a branch or acquiring an existing bank in Lithuania.
Pekao has already received the supervisory commission’s permission to use the so-called single European passport, which allows it to provide banking services in the EEA without a branch.
“We are already one of the leaders in supporting Polish companies’ expansion abroad, for example in trade finance. With our European passport, we will be more active in finding new foreign clients and partners [...]. At the same time, we will be able to support Polish companies expanding abroad more efficiently,” Jerzy Kwiecinski, vice president of Pekao, said in a statement published earlier in November.
In the EEA, he said, Pekao would no longer need additional permits to provide services without a branch, unless the bank had a permanent presence in a particular foreign market or served a large number of local customers.
Polish state among shareholders
PKO Bank Polski is 29.4-percent owned by the Polish government, about a 17.5-percent stake is held by pension funds and the remaining 53.1 percent by other minority shareholders. PKO is a former shareholder in Orlen, Poland’s largest oil company, but sold its shares at a profit last year.
Meanwhile, Pekao’s largest shareholder (20 percent) is the partly state-owned insurance company PZU, which owns the largest non-life insurance company in Lithuania, Lietuvos Draudimas, and PZU Lietuva Gyvybės Draudimas. The state-owned Polish Development Fund owns almost 13 percent, while other shareholders own under 10 percent.
Orlen has picked Pekao Investment Banking and Green Giraffe, an international financial advisory firm, as financial advisors to the Baltic Power wind farm project. The 1.2 GW project is being implemented by Orlen together with Canada’s Northland Power.
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