Established in 1924, Bank Gospodarstwa Krajowego (BGK) – the state development bank of Poland, primarily deals with the provision of financial services for public sector entities and SMEs by supporting the government‘s economic and social policy programmes at national, regional and local level. Ownership: 100% state-owned Legal Status: Act on BGK – ‘State Bank’ (state development bank)
HQ: Warsaw, Poland
Rating: A- (Fitch)
Own Assets (‘10): c.9.2bln EUR
BGK was established by a legislative decree of the President of Poland in 1924 and is legally organized as the only State Bank (as opposed to a joint-stock company) in Poland. The Bank’s activities are governed by a special Act on BGK (14 Mar 2003, amended most recently in Feb 2011), a Decree establishing the Statute of BGK (27 Aug 2003) and the Banking Law (29 Aug 1997). BGK is subject to oversight by the financial regulator (KNF) and is not subject to bankruptcy law.
The Act on BGK clearly defines the bank’s public mandate to support government economic and social programs. Currently the main areas of support are infrastructure, entrepreneurship and innovation, exports and financing projects reliant on EU Funds. It also reaffirms the government’s objective of assigning a key role to BGK with regard to attracting foreign capital in the form of funding from IFIs, EU funds and capital markets, and directing it into infrastructure and regional development projects.
BGK provides financing for the majority of highway and road infrastructure projects in Poland in its role as financing manager and bond-issuing agent of the National Road Fund (KFD). BGK also manages and supports a variety of government funds and programmes dedicated to regional development, infrastructure, housing, SMEs and trade finance. Apart from activities commissioned by the state, BGK provides financial services to local government units and strategic enterprises. As of the end of 2010, BGK’s own assets stood at €9bn, with the balance sheet total (including State Treasury assets under management) at c. €12.25bn.
RATINGS:
On 10 May 2011 BGK was assigned a Long-term Issuer Default Rating of ‘A-‘ with Stable Outlook from Fitch Ratings at the level of the Polish sovereign, reflecting its special status. In Fitch’s view, there is an extremely high probability that the Polish state would provide support to BGK if needed. The Act on BGK states that in case of the Bank's liquidation the state will take over its liabilities. Besides this implicit guarantee, it is also stated in the Act that the Ministry of Finance shall provide BGK with its own funds to ensure the fulfillment of BGK's tasks and ensure that the bank maintains adequate liquidity.
Foreign Currency (Fitch, 10 May 2011)
Long-Term IDR A- (Stable)
Short-Term IDR F2
Support Rating 1
BUSINESS
Public Sector – servicing and management of activities commissioned by the government
· Agent of the Ministry of Finance (foreign debt servicing)
· Clearing and Settlement Agency for Central Government Entities
· EU funds transfer from State Treasury accounts
· Banking services for ministries, central agencies, public health care fund etc.
· Management and servicing of government programs and funds.
Local Government Sector – lending, project finance and services for municipal entities
· Top position in financing of local government
· Core institution in Poland promoting Public-Private Partnerships (PPP)
· Manager of JESSICA Urban Development Fund for urban revitalization projects in Wielkopolska
SMEs/Corporates – lending, project finance, services and guarantees
· Management of the government export finance programme – 1.4bln EUR credit volume to 2015
· National Venture Capital Fund (KFK): venture capital fund-of-funds
· Management of JEREMIE (EU funds for equity, credit and guarantees to SMEs)
Treasury – ALM, funding, trading and services for public sector, municipal and corporate clients
· Liquidity management
· Funding solutions - -5bn PLN (EUR 1,25 bn worth) MTN Programme started in 2011
· Bond Issuances for government programs (e.g. for the National Road Fund ca. 5 bn EUR worth to date)
· FX, fixed income trading
· Agent for local government bond issuances
· Project bond and covered bond issuance capability
FINANCIALS