Lenders Getin Noble Bank SA and Idea Bank SA have reached an agreement on their planned merger, which will result in the creation of the seventh largest bank in Poland.
Under the deal, which is pending the approval of the Polish Financial Supervision Authority and is expected to be completed in the third quarter, Getin Noble shareholders will receive 0.185 new Idea Bank share for 1 Getin Noble share. Idea will act as the acquiring entity, but the merged lender will operate under the Getin Noble brand.
The costs of the integration are estimated at 220 million Polish zlotys, while synergies from the merger are expected to reach 370 million zlotys between 2019 and 2021 and 180 million zlotys per year from 2021. The synergies are expected to help the merged lender achieve a return on equity of 8% by 2021. The bank will also target a cost-to-income ratio of 40% in 2021, compared with 66% at the end of the third quarter of 2018.
The merged bank hopes to attract a financial investor, which will boost its capital. The process to find an investor was initiated by the banks in December 2018, and their financial adviser is currently in discussions with selected private equity funds that have experience in investing into financial institutions, the lenders noted.
Idea and Getin Noble started analyzing their potential merger in July 2018, hoping the process would result in significant cost and sales synergies. The banks are controlled by Polish businessman Leszek Czarnecki.
As of Jan. 17, US$1 was equivalent to 3.77 Polish zlotys.