PZU Plans to Buy Banks in Poland, Expand Insurance Business Abroad

By Martin M. Sobczyk

WARSAW--Polish insurer PZU SA (PZU.WA) said on Wednesday it plans to build a banking group that would be in the top five by assets in Poland.

The strategy is in line with a policy put forward by Poland's socially conservative government, the company's largest and controlling shareholder,

The government said in June it was encouraging the large companies it controls, including PZU, to consider acquiring some of the banks that eurozone owners are looking to sell in Poland. Polish officials have said they want to cut the share of banking assets held by foreign owners from about 60% at present.

PZU, whose second-quarter net profit fell 56% in annual terms to 166 million zlotys ($44 million) due to asset-impairment charges and a rise in compensation claims, said that by 2020 it would boost the contribution of its banking operations to a net profit of PLN450 million a year and hold at least PLN140 billion in assets in them.

PZU's second-quarter gross written premiums totaled PLN5.06 billion, up 14% in annual terms.

The company, which is Central Europe's largest insurer, is in talks with Italy's UniCredit SpA (UCG.MI) about a possible takeover of Bank Pekao SA, in which UniCredit holds 40%, people familiar with the talks said on Tuesday. Pekao is Poland's second-largest bank by assets.

PZU Chief Executive Michal Krupinski said on state radio this week that the company is in talks about buying several other banks but didn't give details.

PZU also said on Wednesday it plans to look for potential takeover targets in the insurance sector outside Poland. It already owns insurance businesses in Lithuania, Latvia, Estonia and Ukraine.

Write to Martin M. Sobczyk at [e-mail]

(END) Dow Jones Newswires

August 24, 2016 03:14 ET (07:14 GMT)

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