Citigroup (NYSE:C) Expanding Investment Banking Unit in Poland to Serve Government Asset Sales

In anticipation of government asset sales in Poland, Citigroup (NYSE:C) announced they’re going to expand their investment banking operations in the country in response to the opportunity.

Some of the competitors of Citigroup will battle them for the business of advising the Polish government on the selling of its assets, including Goldman Sachs (NYSE:GS) and JPMorgan Chase (NYSE:JPM).

Some of the sectors the Polish government will be selling assets in are telecommunications, chemical, energy and insurance. The goal is to raise approximately $10 billion in order to infuse capital into the growing budget deficit they have.

In what Albert May, head of banking in central and eastern Europe for Citigroup called “the wave of privatizations,” in Poland, Citigroup will expand its investment banking unit to generate business on the “mergers and acquisitions side.” May added in a Bloomberg News interview, “We are seeing foreign players who are looking more into Poland because it’s viewed as a big and stable market in the region.”

Citigroup is positioned pretty strongly in Poland, which wants banks to have a presence in the country if they want to do business with the government. The company acquired the majority stake in Bank Handlowy SA in 2001, which is the largest corporate bank in the country. Close to 5,800 people work for them there, giving them a seemingly strong foundation to move forward and generate significant new business.

Some of the companies the Polish government will be selling some of their stakes in are PZU SA, an insurance company; utility Tauron Polska Energia SA; and PGE SA, the biggest producer of power in Poland.

Goldman Sachs is behind the curve at this time of the game, as they are at the stage of opening a branch office in Poland, and another competitor, Credit Suisse, has plans to launch a brokerage sometime in 2010.