The Polish Financial Supervision Authority refused to approve the planned merger of two financially troubled sister units Getin Noble Bank SA and Idea Bank SA.
The regulator said that the lenders, controlled by Polish businessman Leszek Czarnecki, have not attracted an investor that would recapitalize the financial institution created as the result of the planned merger, which calls into question the credibility of a business plan proposed for the merged bank and makes it impossible for the lender to meet minimum regulatory capital requirements, which was the main goal of the planned integration.
Getin Noble said at the end of May that the chances for finalizing the planned merger with Idea were low, with its head Artur Klimczak saying that it should be clear in June whether the lenders will manage to attract an investor.
Idea Bank, which currently operates under the FSA's supervision and has a capital shortfall of 1.3 billion Polish zlotys, recently said it plans to sell some of its assets if it is not able to find an investor to boost its capital.
As of May 31, US$1 was equivalent to 3.84 Polish zlotys.