The takeover of troubled Polish lender Idea Bank by larger rival Bank Pekao has eased fears of a costly bank failure in the country, but has also raised concerns about the expansion of political influence in the sector.
State-controlled Bank Pekao, Poland’s second-largest lender, announced on New Year’s Eve that it would take control of Idea Bank, a small and medium-sized enterprise-focused lender owned by local businessman Leszek Czarnecki.
The announcement was no surprise to markets. Idea Bank’s capital levels were well below minimum requirements and the lender had been under the supervision of the country’s Bank Guarantee Fund (BGF) since May 2019.
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