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Poland CUs company goes public to fund services
SOPOT, Poland (9/18/08)--Poland’s credit union trade association has taken an unconventional step to finance ATMs and credit card development programs for its members.
Click to view larger image Grzegorz Bierecki, National Association of Cooperative Savings and Credit Unions (NACSCU) president and World Council of Credit Unions board treasurer, explains NACSCU's publicly traded credit union entity, TF SKOK, to a WOCCU delegation visiting Poland. (Photo provided by the World Council of Credit Unions)
The National Association of Cooperative Savings and Credit Unions (NACSCU) in Poland created the Credit Union Financial Society (TF SKOK), and took the fledgling company public in June. TF SKOK's initial public offering, trading under the ticker symbol SKOK, listed five million shares on the Warsaw Stock Exchange at about 42 cents per share. The first offering sold out quickly, raising US$2.1 million for the NACSCU initiative. Despite being available to the general public, all of the initial shares were purchased by credit union members, according to Grzegorz Bierecki, president of NACSCU and treasurer of World Council of Credit Unions' (WOCCU) board of directors. “We wanted to open up another method to raise capital to support Poland's credit unions,” Bierecki told a WOCCU delegation of U.S. credit union and league executives visiting Poland this week as part of an education and advocacy engagement program. “The shares were very easy to sell.” Funds raised will help support NACSCU's ATM program, which already has 200 units in place serving credit unions across the Baltic country. The monies also will be used to strengthen the country's fledgling transaction card program, a key step in moving Poland from its current status as a cash-based society and opening avenues for other savings and credit products. The Warsaw Stock Exchange follows the same rigor as the New York Stock Exchange, Bierecki said, requiring stringent accounting transparency and accountability of its listed companies. Polish credit unions, as member-owned financial cooperatives, already operate in a transparent fashion, he said, adding despite additional effort and compliance cost of 5% of the funds raised (about $42,000), going public with TF SKOK wasn't a difficult or expensive proposition. “Through the reports we publish on the stock exchange, it’s easy to communicate what credit unions are about to potential investors and members,” Bierecki said. “And we've opened the door to a new type of unrestricted capital that we can use to help underwrite Poland's credit union movement.” NACSCU considered a second offering of five million additional shares this fall, but decided against it due to economic uncertainties around the world, Bierecki said. U.S. league executives participating in the delegation will travel to Warsaw today to advocate against harmful banker-proposed amendments to Poland's credit union law. They admired the steps taken but were skeptical about the success of similar applications in the U.S. “The move took me by surprise, and I'm not sure what to make of it,” said Joe Bergeron, president of the Association of Vermont Credit Unions. “It’s definitely a non-credit union approach, and I'm not sure if that's good or bad. It's certainly an innovative approach.” Bill Cheney, president/CEO of the California and Nevada Credit Union Leagues, agreed: “You have to admire their creativity; however, the pressures in the U.S. of being a publicly held company are tremendous, and I'm not sure the tradeoff would be worth the effort or expense. “However some would say that applying market disciplines to the credit union movement would do it a lot of good,” Cheney added. Joining Bergeron and Cheney on the Poland engagement program led by WOCCU Executive Vice President and Chief Operating Officer Brian Branch, are: Barry Jolette, CEO, San Mateo CU, Redwood City, Calif., and WOCCU first vice chairman; Jim McCormack, president of the Pennsylvania Credit Union Association; Mike Mercer, president of Georgia Credit Union Affiliates; Mike Schenk, vice president of economic and statistics for the Credit Union National Association; and WOCCU staff.
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