Restructuring of a Bad Debt Portfolio in a Commercial Bank in the midst of an Economic Transition Period. Case study: Powszechny Bank Gospodarczy w Łodzi

Introduction

Powszechny Bank Gospodarczy S.A. w Łodzi is one of the commercial banks that were hived off from the National Bank of Poland as a result of the reform of the Polish banking system that occurred in 1989. Out of the total of nine banks thus established, three institutions - Wielkopolski Bank Kredytowy S.A., Bank Śląski S.A. and Bank Handlowo- Przemysłowy S.A. - have been privatised to date. Powszechny Bank Gospodarczy S.A. is still a single shareholder joint stock company owned by the State Treasury. In terms of asset size it ranks among the major commercial banks in Poland. It is a regional bank, whose principal territory of operations is confined to the Central Poland region, although a network of its branches guarantees the bank nation-wide coverage.