Nov 5 (Reuters) - Potential bidders for Poland's Bank BPH, which General Electric is looking to sell, will be turned down unless they meet rigorous credit rating standards, the country's financial watchdog said.
GE said last month it is considering selling its near 90 percent stake in Poland's 10th biggest bank by assets as part of a shift away from finance and towards industry.
In response, the head of financial supervisor KNF, Andrzej Jakubiak, said potential buyers should hold a debt rating at least equal to that of GE, which is pegged at AA+ by Standard & Poor's - much higher than Poland's A- sovereign rating.
His deputy Wojciech Kwasniak denied on Wednesday that the bar had been set too high. "This is a problem of GE, not of the supervisor," he told Reuters in an interview.
He said it was unlikely that any bank already operating in Poland would get the KNF's approval to take over Bank BPH.
Kwasniak said this was due to Bank BPH's structural risks tied to its relatively large foreign currency loan portfolio, currently covered by the potential of support from GE.
"We have always said that from the point of view of banking supervision ... it is extremely important in conditions of unstable financial markets, and this is still the case, not to swap better investors for inferior ones," Kwasniak said.
On Tuesday, Moody's cut Bank BPH's long-term deposit rating and said it could cut it further following GE's announcement.
NO SWISS FRANC LOAN RISK
Kwasniak also said GE had not fulfilled all the commitments it made to the KNF in relation to Bank BPH. He gave no details.
"As a result we are referring to an uncertain state, where there is no decision (from GE) regarding the final plan," Kwasniak said.
Kwasniak said that when Rabobank wanted to exit from its investment in Bank BGZ it had to find an investor with a similar rating.
Turning to Swiss franc-denominated foreign currency loans, Kwasniak said they did not pose serious risks to Poland's banking system as the share of such credit that had gone sour had stabilised at about 3 percent.
Franc-denominated mortgages account for about 8 percent of Poland's GDP. Prime Minister Ewa Kopacz had asked her economic council to look into the banking sector's resilience to a potential strengthening of the franc, the council's head Jan Krzysztof Bielecki said last week. (Writing by Marcin Goettig, editing by John Stonestreet)
GE said last month it is considering selling its near 90 percent stake in Poland's 10th biggest bank by assets as part of a shift away from finance and towards industry.
In response, the head of financial supervisor KNF, Andrzej Jakubiak, said potential buyers should hold a debt rating at least equal to that of GE, which is pegged at AA+ by Standard & Poor's - much higher than Poland's A- sovereign rating.
His deputy Wojciech Kwasniak denied on Wednesday that the bar had been set too high. "This is a problem of GE, not of the supervisor," he told Reuters in an interview.
He said it was unlikely that any bank already operating in Poland would get the KNF's approval to take over Bank BPH.
Kwasniak said this was due to Bank BPH's structural risks tied to its relatively large foreign currency loan portfolio, currently covered by the potential of support from GE.
"We have always said that from the point of view of banking supervision ... it is extremely important in conditions of unstable financial markets, and this is still the case, not to swap better investors for inferior ones," Kwasniak said.
On Tuesday, Moody's cut Bank BPH's long-term deposit rating and said it could cut it further following GE's announcement.
NO SWISS FRANC LOAN RISK
Kwasniak also said GE had not fulfilled all the commitments it made to the KNF in relation to Bank BPH. He gave no details.
"As a result we are referring to an uncertain state, where there is no decision (from GE) regarding the final plan," Kwasniak said.
Kwasniak said that when Rabobank wanted to exit from its investment in Bank BGZ it had to find an investor with a similar rating.
Turning to Swiss franc-denominated foreign currency loans, Kwasniak said they did not pose serious risks to Poland's banking system as the share of such credit that had gone sour had stabilised at about 3 percent.
Franc-denominated mortgages account for about 8 percent of Poland's GDP. Prime Minister Ewa Kopacz had asked her economic council to look into the banking sector's resilience to a potential strengthening of the franc, the council's head Jan Krzysztof Bielecki said last week. (Writing by Marcin Goettig, editing by John Stonestreet)
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