GDANSK (Reuters) -Bank Handlowy, the Polish arm of Citigroup, has announced a plan to shift its focus towards institutional banking and has agreed to sell its consumer banking business to VeloBank.
Bank Handlowy to Focus on Corporate Banking, Exiting Consumer Sector
GDANSK (Reuters) -Bank Handlowy, the Polish arm of Citigroup, has announced a plan to shift its focus towards institutional banking and has agreed to sell its consumer banking business to VeloBank.
Bank Handlowy aims to develop its institutional banking activities, which accounted for 72% of bank's revenue in 2024. The exit from the retail business is in line with the bank's updated strategy for 2025-2027, which was published on Tuesday.
Bank Handlowy said the estimated value of the sale for shareholders will amount to about 1.1 billion zlotys ($292.46 million). It expects the sale to close in the middle of 2026.
Once the sale is finalised, the bank intends to introduce a new business model from 2027, which aims to diversify the revenue streams and the balance sheet structure of its institutional banking division.
The company's new goals include keeping the cost income ratio below 30%, compared with the 45% seen in the strategy published in December.
Under the updated strategy, the planned regular dividend payout ratio over a three-year period is expected to range between 75% and 100%, the bank said.
In December, the bank projected a 15% return on equity for 2027, but now expects it to reach about 19%.
"We will be a bank that finances the country's key investments, such as defence and energy transformation," said Elżbieta Czetwertynska, CEO of Bank Handlowy.
"Our announced exit from the consumer business paves the way for accelerating the development of corporate banking, which aims to support Poland's economic growth and development."
Czetwertynska also said that after the sale, Bank Handlowy will continue to be listed on the Warsaw Stock Exchange, and intends to maintain regular dividend payments to shareholders.
The CEO said the bank is in discussions with the regulator to distribute profits from previous years to its shareholders.
(Reporting by Julia Kotowska and Anna Banacka; Editing by Mrigank Dhaniwala and Jane Merriman)
