T H E I N T E R-WA R Y E A R S

bank retrenched its activities. For instance, its management fees decreased from 6.5 to 3.5 million zlotys between 1929 and 1933. At the time the bank employed some 625 staff.

Over the next few years, the history of SGBP was dominated by the drawing up and implementing of two successive remediation plans in 1933-1935 and 1937. These were carried out with the greatest discretion so as to avoid harming the bank s credit rating or that of its main shareholders.

In April 1933, an audit of SGBP s accounts revealed a deficit of some 15.5 million zlotys. In order to help finance these losses, SGBP shareholders agreed to renounce some of their claims on the company, in proportion to their respective shareholdings.

This stabilisation operation led to a concentration of the bank s equity in fewer hands, as some shareholders, including even the Böhmische Union-Bank, plus small Polish share- holders, surrendered their stakes to the three main shareholders without indemnity.

In 1934, SGBP opened a branch in Gdynia. Located close to the then free city of Danzig (today Gdansk), this seaport had been built in the 1920s in order to give the new Poland a maritime export route of its own. Establishing an SGBP branch in this Baltic port was symbolic of the bank s intention to confine itself more tightly than before to financing strictly commercial operations. The Gdynia branch saw its turnover grow rapidly.

Meanwhile the global financial crisis was affecting SGBP s main shareholders. In 1934, as part of an overall stabilisation exercise in the Austrian banking sector, WBV merged with Creditanstalt. The new entity took the name of Creditanstalt-Bankverein. At the same time, BBE and Société Générale de Belgique were also compelled to restructure in order to conform to new Belgian legislation. They were obliged to spin off their deposit- taking businesses into new separate entities. Now transformed into a holding company, Société Générale de Belgique absorbed BBE in 1936, thus becoming a direct shareholder in SGBP.

Notwithstanding all the attempts at stabilisation, SGBP s situation worsened further over the following months. The slump in the price of raw materials and the deflationary poli- cies pursued by the Polish government were weakening the Polish economy. Many com- panies to which the bank had lent funds found it impossible to meet repayment schedules.

Consequently, the bank faced fresh losses that year, which have absorbed, and exceeded, the capital and special depreciation reserves established during previous stabilisation efforts 14. In June 1936, necessary provisions for bad debts were estimated at 12 million zlotys, of which 7.6 million still remained to be provisioned!

14. State Archives of the Kingdom of Belgium Vol II, BBE, n° 81-82, memo on the stabilisation of SGBP, September 1936.

LOGO POWSZECHNEGO BANKU ZWIĄZKOWEGO W POLSCE

LOGO OF SOCIÉTÉ GÉNÉRALE DE BANQUE EN POLOGNE (SGBP), ALIAS

POWSZECHNY BANK ZWIAZKOWY W POLSCE

CZEK WYSTAWIONY PRZEZ KLIENTA POWSZECHNEGO BANKU

ZWIĄZKOWEGO W POLSCE

CHEQUE ISSUED BY AN SGBP CLIENT

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