Poland's state development bank BGK eyes 2015 credit boost

Poland's state development bank BGK plans to extend new financing worth 6 billion zlotys ($1.58 billion) in 2015 as part of a programme to boost economic growth, its chief executive said. Dariusz Kacprzyk told Reuters the bank will also start financially backing foreign acquisitions by Polish firms and expects the first to be clinched within two months.
"In my opinion, the contribution of BGK to Poland's economic growth is large," Kacprzyk said.
Recapitalised by the state, BGK launched a massive lending and guarantee programme in 2013 in a bid to revive growth while keeping the fiscal deficit in check.
As part of the programme, the bank now has 12 billion zlotys in outstanding guarantees for small and medium-seized companies, which were used by commercial banks to extend loans worth 21 billion zlotys, or 1.2 percent of gross domestic product.
BGK plans to add at least 3 billion zlotys of such guarantees this year.
Separately, BGK has nearly 18 million zlotys in outstanding loans and guarantees for investment projects by some of the country's biggest firms and plans to increase that by nearly 6 billion zlotys this year, Kacprzyk said.
Slightly less than half of that 18 billion has so far translated into balance sheet commitments. "The remaining part of financing will be used during this and next year," Kacprzyk said.
BGK has established a fund that will take minority equity stakes in foreign take-overs carried out by Polish firms.
Investment by the bank's Foreign Expansion Fund (FEZ), now with 1.5 billion zloty of pledged capital, should ease negotiations and lower financing costs for the acquirers, Kacprzyk said.
"We have two very advanced transactions at this point," Kacprzyk said. "We should clinch the first one within two months from now."
He said a "large producer associated with the transport industry" wants to buy a firm in Western Europe and BGK is ready to supply part of capital.
Kacprzyk said the state will recapitalise the bank again this year. BGK's capital now stands at about 8 billion zlotys.
"After this year's recapitalisation we will be Poland's third largest bank in terms of capital," Kacprzyk said.
"If we continue growing at the current pace ... in five years we will be the third largest bank in terms of balance sheet in Poland."