Poland’s biggest insurer and second biggest bank agree potential €23bn merger

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Poland’s biggest insurer, PZU, and second-largest bank, Pekao, both of which are partially state owned, have agreed a potential merger that would create a financial giant worth around 100 billion zloty (€23 billion).

“This is a momentous event, with the potential to push the development of the Polish financial sector forward dynamically and create great value for customers and the economy as a whole,” said state assets minister Jakub Jaworowski.

The restructuring would see PZU split into a holding company and an insurance-operating subsidiary. The holding company would then merge with Bank Pekao and the combined entity would be listed on the Warsaw Stock Exchange (GPW). The brands would retain separate identities and operational independence.

The companies say the new group could unlock 15 to 20 billion zloty in excess capital under solvency rules that will take effect in 2027 and create up to 200 billion zloty in additional lending capacity.

Finance minister Andrzej Domański said the combined group would be better positioned to finance strategic investments that currently exceed regulatory lending limits for individual banks.

Without adapting to new conditions, “we won’t maintain high GDP growth dynamics and, if we want to keep competing, we must focus on boosting productivity”, said Domański, quoted by business daily Puls Biznesu. “That means more innovation and investment. And with investment always comes the key question of financing.”

Andrzej Klesyk, acting CEO of PZU, likewise said the merger would free up surplus capital to support strategic projects in defence, energy and new technologies by creating “a more transparent, highly diversified, resilient and business-effective entity”.

Echoing this broader ambition, Cezary Stypułkowski, president of Bank Pekao, said the agreement “will allow us to significantly increase the capacity to lend to the Polish economy” and represents a move towards establishing a financial institution “important on a European scale,” reports financial news service Bankier.

Despite the ambitious targets, analysts warn that capital alone is not enough to stimulate credit growth in Poland. Puls Biznesu notes that lending remains weak due to low demand from companies, not just capital constraints.

The deal is targeted for completion by 30 June 2026, pending regulatory approval, legal changes and shareholder consent. The companies also plan to evaluate strategic options for PZU-owned Alior Bank as part of the consolidation.

However, the memorandum does not specify a definitive plan for Alior Bank’s future, notes Puls Biznesu. 

Options under consideration include an accelerated merger with Pekao prior to the PZU transaction – although the short timeframe makes this unlikely – or a potential sale of the bank. The latter, while seen as economically favourable, could face political challenges.

Notes from Poland is run by a small editorial team and published by an independent, non-profit foundation that is funded through donations from our readers. We cannot do what we do without your support.

Main image credit: Warszawska róg Szerokiej w Tomaszowie Mazowieckim/Wikimedia Commons (under public domain) and Bank Pekao

Alicja Ptak

Alicja Ptak is senior editor at Notes from Poland and a multimedia journalist. She previously worked for Reuters.