Acquisition of VeloBank: A Strategic Move by Cerberus, EBRD, and IFC

A New Chapter for VeloBank

The acquisition of VeloBank by an affiliate of Cerberus Capital Management L.P., the European Bank for Reconstruction and Development (EBRD), and the International Finance Corporation (IFC), a member of the World Bank Group, marks a pivotal moment for the Polish banking sector. The transaction was completed after obtaining the necessary regulatory approvals and represents a significant step forward for VeloBank’s growth and development.

The Acquisition Process: Transparent and Competitive

This acquisition followed a rigorous, transparent, and competitive sale process initiated by the Bank Guarantee Fund in 2023. The successful completion of this process opens up new opportunities for VeloBank, which will benefit from a recapitalization of PLN 687 million by its new owners. The removal of bridge bank status and related restrictions, previously imposed by the European Commission, further positions VeloBank for expansion across various business lines.

Customer Impact: Continuity and Security

For VeloBank customers, the acquisition brings continuity and reassurance. The funds held in VeloBank S.A. continue to be protected by the Bank Guarantee Fund under the same principles that apply to other banks within the Polish deposit guarantee system. This ensures that customer service and financial security remain unaffected by the change in ownership.

Strategic Vision: Supporting VeloBank’s Growth

Charles Dunlap, Senior Managing Director at Cerberus, expressed his enthusiasm about the acquisition, emphasizing the bank’s strong position in the dynamic Polish banking market. He highlighted the bank’s focus on digital innovation and customer-centric financial products, which are expected to drive its future success.

New Leadership: A Fresh Perspective

As part of the acquisition, a new Supervisory Board was appointed on August 1, 2024. This board, composed of experts with extensive experience in the financial sector, is expected to guide VeloBank through its next phase of growth. Jakub Papierski, the newly appointed Chairman of the Supervisory Board, expressed confidence in the bank’s future, citing the strong sponsorship provided by Cerberus, EBRD, and IFC.

Financial and Operational Strength: A Foundation for Growth

The acquisition has significantly strengthened VeloBank’s financial and operational foundations. Over the past two years, the bank has launched several strategic initiatives aimed at enhancing customer service, expanding its product offerings, and improving credit processes. These efforts have already yielded impressive results, including the acquisition of nearly 300,000 new customers and a PLN 16 billion increase in deposit balances since the beginning of 2023.

VeloBank’s Achievements: A Record of Success

Since October 2022, VeloBank has seen a fourfold increase in the sale of personal loans. Additionally, the bank has successfully resumed the sale of mortgage loans and expanded its bancassurance offerings, leading to a significant and steady increase in commission income. The bank has also rebuilt its offerings for businesses and private banking, further solidifying its position in the market.

Resolution Process: A Milestone in European Banking

VeloBank’s resolution process, which has been described as one of the most challenging in the history of European banking, was conducted in compliance with the highest standards of EU law. Adam Marciniak, CEO of VeloBank, noted that the sale of the bank was a crucial step in completing the resolution procedure, which not only ensures the stability of the banking sector but also serves as a positive signal for the safety of the Polish financial system.

Looking Ahead: Building a Stronger Future

VeloBank’s leadership team is committed to building a stronger position in the Polish market. With a focus on innovation and ambitious implementations, the bank aims to support the growth of both individual and corporate clients. The bank’s commitment to enhancing innovation extends beyond the financial sector, aiming to contribute to the broader Polish economy.

Global Perspectives: EBRD and IFC’s Commitment

Francis Malige, EBRD’s Managing Director for Financial Institutions, expressed satisfaction with the successful closing of the investment in VeloBank. He noted that this transaction marks a new beginning for the bank and ends a long and complex resolution process. Ary Naïm, the World Bank Group’s Country Manager for Poland and IFC Manager for Central and South Europe, highlighted the importance of this transaction in diversifying financing options for the Polish economy, with a particular focus on digital and green finance.

VeloBank’s New Era: Strengthening Poland’s Financial Landscape

The acquisition of VeloBank by Cerberus, EBRD, and IFC represents a significant milestone in the Polish banking sector. With strong new ownership and a clear strategic vision, VeloBank is well-positioned to capitalize on its successes and continue its growth trajectory. The bank’s commitment to innovation, customer service, and financial stability ensures that it will play a crucial role in the Polish economy for years to come.

FAQs

What was the purpose of acquiring VeloBank?

The acquisition aims to strengthen VeloBank’s financial and operational foundations, allowing it to grow and expand its services in the Polish banking sector.

How does the acquisition impact VeloBank customers?

The acquisition does not affect customer services or the security of their funds, which remain protected under the Polish deposit guarantee system.

What changes were made to VeloBank’s leadership?

A new Supervisory Board was appointed, consisting of experts with significant experience in the financial sector, to guide the bank’s future development.

What are the future plans for VeloBank?

VeloBank plans to focus on innovation, customer service, and expanding its product offerings to strengthen its market position in Poland.

How did VeloBank perform in recent years?

VeloBank has seen significant growth, including the acquisition of nearly 300,000 new customers, a PLN 16 billion increase in deposits, and a fourfold increase in personal loan sales since October 2022.