Bank BPH has announced a sale of the bad debt portfolio, total value of the transaction was PLN 1,038.86m. According to the management comments it will have a positive impact on the 4Q06 results, however the company decline to comment on exact data.
Our view: Given lack of guidance from the management, the final assessment of the bottom-line impact is impossible. According to PKO BP management, commenting on such transactions in the past, the yields has decline from some 10%-12% at the beginning of the year to some 4%-7% recently. That would imply an after-tax impact of some PLN 30m-PLN 60m. We do not expect significant impact on the stock price as the transaction should be known to the market, however it should have a positive impact on the level of dividend that Bank BPH is going to pay (above 90% payout ratio, on our estimates).