Banking sector reform in Poland

The reform of the Polish banking system in 1989 led to the establishment of nine generalist banks one for each region and six large specialist banks. In addition, a number of foreign banks started up in Poland, either by obtaining a banking licence or by taking a stake in an existing bank. However, there were limits to the expansion of foreign banks into Poland: In 1991 a moratorium was opposed on the granting of new licences and any foreign bank wishing to take a stake of over 10% in a Polish financial institution had to obtain the approval of the Polish Central Bank.

Dresdner Bank. The representative offices of the two banks in Poland now began to work together.

However, Poland s economic and financial situation remained extremely tense until 1991, when the Polish debt was restructured94. Debt repayment became an even more pressing issue as the country slipped into recession and Poland was only able to regain its 1990 GDP level in 1995. Under the debt restructuring, 50% of Poland s bilateral debt due to public sector creditors grouped in the Paris Club was forgiven. Paris Club members wished to support the pro-West government of Lech Walesa, which had just withdrawn from the Warsaw Pact, a collective defence treaty among eight communist states of Central and Eastern Europe.

BNP carried out or participated in a number of important financial transactions, such as the financing of a contract for the computerisation of the Polish Ministry of Finance so that a Value Added Tax could be introduced. In 1993, BNP and Dresdner signed a coop- eration agreement with Polish firm Hejka Michna, pertaining to the privatisation of Polish industry and the provision of consultancy to German and French companies wishing to establish a presence in Poland.

In late 1994, Dresdner and BNP obtained authorisation to set up a commercial bank in Warsaw and the following year the BNP-Dresdner Bank Polska joint venture95 was born. The new Bank worked with French, German and multinational companies as well as a number of major Polish firms. Bernard Robinet ran the Bank, which had 37 staff, among them four French and four German expatriates. Branches in Poznan and Katowice were opened in 1996.

In March 1996, BNP acquired 80% of Eurofund Management Polska, whose mission was to prepare top-flight Polish companies for future privatisation.

The BNP-Dresdner Bank Polska joint venture, under the management of Pierre Gauthier and Rolf Michel, enjoyed a very good year in 1997, when some 90 French companies set up in Poland. One year earlier, in 1996, glassmaking giant Saint-Gobain had acquired two Polish glassmakers Polflot and Gullfiber making the French firm the single biggest investor in Poland. Direct foreign investment in Poland remained very high in the late 1990s, accounting in 1999 for 36% of all investment in Central and Eastern and Europe.

During this period, BNP-Dresdner Bank Polska executed a number of financial opera- tions, including financing the Nowogrodzka 68 project the Bank acting in 1996 as sole

94. Polish firms had been contracting considerable foreign debt since the 1970s. At the end of 1990 this debt stood at $48 billion, equivalent to 78% of GDP. Fully 68% of this figure was backed by State guarantees provided to 16 different countries.

95. BNP-Dresdner Polska, along with Citibank, Austrian financial institution Creditanstalt-Bankverein and Germany-based Westdeutsche Landesbank Girozentrale, were the first to receive such licences.

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