Bank Gospodarki Żywnościowej (BGŻ) merged with BNP Paribas Polska at the end of April to form Bank BGŻ BNP Paribas. Rebranding is on its way, with the new name to appear on all branches. Arkadiusz Napiórkowski, head of foreign exchange options & structured products at the former BGŻ spoke to SRP about the new strategy.
“We will unify our products for both distribution channels, so the merged banks will distribute similar offerings with similar terms, based on the same underlyings,” said Napiórkowski. The bank has launched its first deposit as Bank BGŻ BNP Paribas, although using the old, BGZ logo. The new life bond with unified terms should be available through distribution of former BNP Paribas Bank Polska in June.
The merged bank will have open architecture, with new investment ideas based on traditional and known underlyings. “We observe that Polish clients prefer underlyings linked to Polish market,” he said.
However, Napiórkowski’s outlook lays in growth of equity linked products. “Recently we are observing the shift from bonds to equity market, which was supported by historically low level of interest rates. Secondly, as the market expects that interest will rise, probably by the end of 2016, this already creates better conditions for new products offerings thanks to steepening yield curve. While FX-linked products will still might stay as the number one asset in Poland, for two reasons: easy access to market and low spreads for FX option; the pace of growth in Polish structured products market will be in equities.
The regulator approved the merger of both units of BNP Paribas (Bank BGZ and BNP Paribas Bank Polska) through the transfer of the assets of the combined entity to BGŻ. BNP Paribas agreed to buy a 98.5% stake in BGŻ from Rabobank in December 2013 and went ahead with the deal in September 2014.
Both banks were active distributors of structured products: the former BGŻ issued and distributed product created by its treasury department, wrapped in deposit form. In 2012, the bank expanded the distribution of its structured deposits via its online subsidiary BGŻOptima, which had been offering its clients its own products.
The former BNP Paribas Bank Polska catered to its own clients with different type of wrappers: funds, unit-linked life insurances and endowment policies. The initial distribution of funds consisted of those made and managed by sister companies Fortis and later BNP Paribas Investment Partners, and later the bank partnered KBC Asset Management, whose own distribution was itself transferred after Kredyt Bank was sold to Bank Zachodni. The majority of these products were life policies, the new merged bank will continue to use this model Napiórkowski.
BNP Paribas is the sole shareholder in its two Polish subsidiaries, which will be one of few large financial institutions in the country without a stockmarket listing. The bank will be the seventh largest bank in Poland by assets.