Poland's Pekao to buy Idea Bank after compulsory restructuring

Polish bank Pekao, the country's second-biggest lender, said on Thursday that it will acquire Idea Bank, owned by one of the country's billionaires, which was placed under compulsory restructuring to avoid bankruptcy.

Its owner Leszek Czarnecki denounced the takeover as illegal in a statement on his lawyer's Facebook page, saying he would sue for damages and appeal against the decision.

Others welcomed the takeover, which had long been expected because of Idea Bank's financial difficulties.

Pawel Borys, the chief executive of Polish state fund PFR, said on Twitter it meant "one less risk in the banking sector in 2021".

Pekao's acting Chief Executive Leszek Skiba said in a statement the deal would generate shareholder value through synergies and secure the larger banks' capital and liquidity position.

Idea Bank declined to comment.

Idea Bank's capital gap is 482.8 million zlotys ($130.03 million), the head of Poland's Bank Guarantee Fund (BFG) said, adding that Pekao will receive a subsidy of up to 218 million zloty to help cover it.

Under the terms of the deal, Pekao will acquire some of Idea Bank's assets and liabilities, excluding corporate bonds issued by debt collector GetBack.

All customer deposits and loans will be transferred to Pekao.

Pekao said the transaction will increase its assets by about 14.4 billion zlotys from over 230 billion zlotys currently.

It estimates cumulative cost synergies from the deal at about 300 million zlotys over a 10-year period.

The takeover will be effective on Jan. 3, Pekao said, while the full operational integration of Idea Bank is expected by the end of 2021.

The takeover was engineered by the BFG, which was set up to support stability in Poland's financial system, by guaranteeing banks and credit unions deposits.

It is responsible for resolutions for financial institutions at risk of bankruptcy.

Czarnecki in his Facebook comments said BFG had acted illegally.

"Today's BFG decision on the practical nationalisation of Idea Bank S.A. is a clear violation of the law," he said.

Polish prosecutors have accused Czarnecki of cheating Idea Bank's clients and exposing the lender to a significant loss. Czarnecki's lawyer has dismissed the allegations, saying they are politically motivated.