Investec's 60-fold leap in value
When a new minister of finance ordered the instant dismissal of three highly regarded board members, the management of Poland's Bank Handlowy decided the only way forward was privatization. Until then, privatization had been only one option among several for expanding and developing Poland's oldest bank.
But the realization that the bank's progress depended on having a benevolent minister in office pushed president Cezary Stypulkowski (himself hand-picked by a previous finance minister) towards this single goal. Using an innovative capital structure that maintains the state's economic interest while limiting its executive involvement, Bank Handlowy W Warszawie was privatized last June bringing in three foreign strategic investors: JP Morgan, Swedbank and Zurich Insurance. With a market capitalization of $735 million Handlowy is the largest stock on the Warsaw Stock Exchange.
Currently the bank is engaged in a full-scale restructuring aimed at both building up and consolidating its position in Poland (the bank is strong in the corporate sector but weaker in retail). Handlowy wants to stand out in eastern Europe, and in emerging markets generally, as an example of how a state-owned bank can successfully modernize.