VeloBank has secured an investor, a subsidiary of the Cerberus Capital Management, L.P. fund based in New York, which will recapitalize the bank in the amount of PLN 700 million. The new investor plans to continue cooperation with the team, appreciating its effort in building the bank thus far. The transaction confirms the attractiveness of the Polish banking sector.
The agreement, signed on Friday in Warsaw, marks a key stage in the resolution process being carried out according to plan. It confirms the bank’s strong position, and for customers, it means further stable development of a modern and attractive product offering. The transaction’s completion, after obtaining the necessary approvals from the European Commission and the Polish Financial Supervision Authority, is expected in mid-2024.
“For the first time in Poland’s history, in the interest of consumer protection, a bank was created whose team took up and accomplished the challenge of creating a strong brand in a competitive market as part of the resolution process. The goal was to acquire an investor within 1.5 years, in accordance with European Commission requirements. The successful transaction is a collective achievement of all VeloBank employees and the owner, the Bank Guarantee Fund,” says Adam Marciniak, President of VeloBank.
Moreover, the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC), a World Bank Group entity, have received, respectively, the operational committee and investment committee’s approvals for potential equity involvement in VeloBank, subject to the approval of the relevant boards of directors and binding legal documentation. IFC and EBRD may each indirectly acquire up to 9.9% of shares in VeloBank.
“The high interest in the bank confirms that we have built a strong and recognizable brand. We’ve gained a position as an agile fintech among banks, rapidly implementing innovative solutions. We introduced, among other things, a remote mortgage application process, an intuitive mobile application following the ‘mobile first’ idea, hyper-personalization, and are currently executing nearly 60 projects utilizing Generative AI. We’ve acquired 230,000 new customers who opened VeloAccounts with us and built a full-scale e-commerce platform – VeloMarket. Our strategy anticipates further dynamic development, both in terms of product offerings and services. We focus on a ‘beyond banking’ approach. Additional capital will strengthen our position and enable the realization of more ideas,” says the president.
VeloBank’s plans for the current year include offering mortgages worth PLN 1 billion, PLN 2 billion in consumer loans, and PLN 2 billion in corporate loans. The recapitalization will be a stimulus for further development.
“We are now at the stage of meetings and deepening cooperation. The combined forces of the American fund, possessing vast know-how in the financial sector, with the energy and the growth dynamics of VeloBank to date, will generate even greater value for customers and the financial market,” adds Marciniak.
From the customer’s perspective, the transaction confirms the stability and certainty of sustainable development of the offer, including deposit products, still guaranteed by the Bank Guarantee Fund.
Founded in 1992, Cerberus has extensive experience in investing in financial institutions globally and in Europe, including in CCF and My Money Bank in France, Hamburg Commercial Bank in Germany, and BAWAG in Austria. It has been approved by several European regulatory bodies, including French, Austrian, and German authorities, as well as by the European Central Bank. It manages assets worth approximately $60 billion, involved in complementary strategies across credit, equity, and real estate markets.
