Bloomberg News

PKO Heads for Six-Week High as Bank Seen ‘Resilient’ to Crisis

October 14, 2011

Oct. 14 (Bloomberg) -- PKO Bank Polski SA, Poland’s biggest bank, headed for the highest close in six weeks as HSBC Holdings Plc said the lender’s valuation is “attractive” after a slump and that concerns about weaker earnings are “exaggerated.”

HSBC maintained its “overweight” recommendation for the stock, saying the state-controlled bank along with Bank Pekao SA, Poland’s second-largest bank, and Komercni Banka AS of the Czech Republic will be “relatively resilient to the adverse impact” of Europe’s sovereign-debt crisis as they have “strong liquidity and capital positions,” according to HSBC’s research.

PKO climbed 1.8 percent to 34.67 zloty at 1:16 p.m. in Warsaw, heading for the highest close since Sept. 1, while the WIG20 Index gained 0.9 percent. The stock has still tumbled 25 percent from this year’s closing high on April 13 on concern earnings will deteriorate as the economy slows and the zloty’s slump makes it more difficult for Polish homeowners to pay back their foreign-currency mortgages.

“Over the coming months we expect these market concerns to recede and the focus to shift onto PKO’s attractive valuation,” analysts Gyorgy Olah and Avinash Goel at HSBC wrote in the note.

Pekao, majority-owned by UniCredit SpA, increased 1.5 percent to 144.7 zloty in Warsaw today, while Komercni Banka shares added 0.2 percent to 3,473 koruna in Prague trading.

--Editors: Wojciech Moskwa, Alex Nicholson

To contact the reporter on this story: Pawel Kozlowski in Warsaw

To contact the editor responsible for this story: Gavin Serkin at

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