structure inter alia metals, chemicals, textiles and sugar so it was deemed essential for the new bank to have a presence there. Accordingly Vaclav Fajans was tasked to open a regional office in Warsaw, which he duly did in November that year. The bank now had three regional head offices in Warsaw, Cracow, and Lvov plus six branches.

The rise of SGBP in the 1920s

In order to help its Polish subsidiary to grow, BBE opened credit lines abroad amounting to £50,000 in London, 2.5 million French francs in Paris and Brussels and 50 million German marks in Cologne. These credit lines provided a basis for the new bank to carry out its business. Among the deals done in the mid-1920s were the financing of sugar planting and harvesting, loans to the alcohol industry, and export credits for timber mer- chants. In the early years, BBE and its partners made substantial profits.

However, 1921 and the following years were marked by galloping inflation and rapid depreciation of the currency. The bank s business became difficult, as WBV s Oskar Pollak noted in October 1923: Given the instability of the exchange rate, one might say that deposits are no longer being made in our own currency. In addition, SGBP s own capital, in Polish marks, today represents an amount of gold which is completely disproportionate to the extent of the business which our former Polish branches achieved through hard work over several decades 10. Nevertheless, the situation temporarily provided SGBP with opportunities due to the fact that it was being sponsorship by foreign banks Unless the State s finances are stabilised quickly, I believe that it will become impossible to finance Polish industry in Polish marks and this will increasingly have to be done by drawing on foreign credit or ( ) in foreign currency. This situation opens up the prospect, both for SGBP and for us the banks which control SGBP of some highly promising business opportunities 11, wrote Pollak in January 1924.

In 1924, SGBP increased its capital to 3 billion marks. The bank also subscribed shares in the new Warsaw-based Bank of Poland, a joint stock company set up to issue notes and coins, subsequently passing on part of its stake to BBE and WBV. Moreover, BBE was appointed the Bank of Poland s correspondent bank in Belgium. In an effort to tie the national currency to the gold standard, the Polish mark was replaced by a new currency, named the zloty, at a rate of 1.8 million Polish marks to the zloty. SGBP s capital of three billion Polish marks thus became 1,666 zlotys (sic!), which was raised in 1925 to 1.5 million zlotys by incorporating reserves.

SGBP s business consisted mainly of providing generally short-term loans for relatively modest sums to landowners, manufacturers and commercial enterprises, most clients

10. State Archives of the Kingdom of Belgium Vol II, BBE, n° 81-82, Oskar Pollak to Chevalier de Wouters d Oplinter, 3 January 1924.

11. State Archives of the Kingdom of Belgium Vol II, BBE, n° 81-82, Oskar Pollak to Chevalier de Wouters d Oplinter, 3 October 1923.