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UPDATE 1-Poland's Pekao to name PZU's Krupinski as new CEO
June 14, 2017 / 3:55 PM / 6 months ago

UPDATE 1-Poland's Pekao to name PZU's Krupinski as new CEO

(Recasts with new CEO, market reaction and background)

By Marcin Goclowski

WARSAW, June 14 (Reuters) - Poland’s second-largest lender Bank Pekao SA said on Wednesday it nominated former insurance boss Michal Krupinski as the bank’s chief executive officer after long-serving CEO Luigi Lovaglio was dismissed earlier in the day.

The management change, which also included the resignation of the bank’s two deputy CEOs, follows the purchase of a 32.8 percent stake in Pekao by state-run entities.

Insurer PZU and state investment vehicle PFR finalised the purchase of the stake last week from Italy’s UniCredit .

Pekao said in a statement it had appointed Krupinski as deputy CEO pending approval by the Polish Financial Supervisory Authority (KNF), at which point he will be made CEO.

Krupinski was CEO of PZU at the time when the state-run insurer decided to buy the Pekao stake for 10.6 billion zloty ($2.84 billion).

Lovaglio, 61, who holds both Italian and Polish passports, was appointed to Pekao’s board in 2003. He had a reputation as a respected manager who presided over solid financial results. He also resisted temptation to grant Poles the Swiss franc-denominated mortgages that became a serious problem for the banking sector.

“Political factors and dividing the spoils have became more important than business. This is inconsistent with pledges that he will lead the bank during the transition period and this is why the share price is down,” one analyst in Warsaw said of Lovaglio’s dismissal.

By 1430 GMT Pekao shares had recovered to be up 0.5 percent, outperforming the main index of the Warsaw bourse which was down 0.2 percent.

Separately, the supervisory board at Poland’s biggest lender, state-run PKO BP decided on Wednesday to keep long-serving CEO Zbigniew Jagiello in place for another term.

$1 = 3.7266 zlotys Additional reporting by Lidia Kelly and Marcin Goettig; Editing by Elaine Hardcastle

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