BUDAPEST/WARSAW: Warsaw stocks were driven higher by bank shares on Thursday after Poland’s third-largest lender, Bank Zachodni WBK, signed a deal to buy Deutsche Bank’s Polish assets.
The 1.29 billion zloty ($362 million) deal fits into a consolidation of the bank sector in Central Europe’s biggest economy, marked with mergers and acquisitions.
Polish banks improved their profitability this year even though central bank rates are at record lows, with their net interest income rising 11 percent in annual terms in the January-October period.
BZ WBK shares jumped by more than 5 percent after the announcement of the deal.
The index of Warsaw-listed banks stocks rose 0.9 percent, approaching the 2-1/2-year high reached late last month, while Warsaw’s bluechip index was up 0.6 percent at 1013 GMT.
Bank stocks firmed despite surprisingly dovish comments from Polish central bank rate setter Grazyna Ancyparowicz, who told Reuters on Wednesday the latest pick-up in inflation was caused by factors beyond the influence of monetary policy.
“Her comment … confirms that one should not include her in the group of policy hawks despite earlier pronouncements allowing for a rate hike in the course of 2018,” BZ WBK said in a note.
The comments helped push the zloty to its weakest level since Nov. 21 against the euro.
Trading at 4.222, it was down 0.1 percent, leading a weakening of most currencies in the region.
The region’s currencies and government bonds failed to benefit from Wednesday’s Federal Reserve comments, which tempered expectations for future interest rate tightening in the US, weighing on the dollar.
Dollar selling often help assets in Central Europe fast-growing emerging economies.
But the recent, relatively moderate inflation figures in most of the region led to the view that its central banks will not rush into monetary tightening.
Even the Czech central bank (CNB) which has raised interest rates twice since August is unlikely to touch rates again at its meeting next week, even though inflation is above its 2 percent target.
A report on the Czech car industry on Thursday added to signs that the economy is booming. Czech manufacturers are set to produce a record 1.4 million vehicles in 2017, the CTK news agency said.
Other figures showed that the economy, which grew 5 percent in annual terms in the third quarter, remains balanced, with the Czech current account posting a higher-than-expected 14.99 billion crown surplus in October.
The crown eased 0.1 percent to 25.68 versus the euro.