Polish government settles with UniCredito
Warsaw, Poland 6 April 2006 - In October 2005 the Italian bank UniCredito ignited a firestorm in Poland when it bought a German bank that had an interest in the Polish bank BPH. In a previous privatisation agreement UniCredito and agreed to not engage in competitive activities. The Polish government interpreted this clause in the privatisation agreement to mean that UniCredito could not purchase another Polish bank and set out to prevent the merger of the Polish Bank BPH and bank Pekao.
The issue of the merger ultimately involved the European Union, the National Bank of Poland, and the European Court of Justice.
The Polish government used threats and intimidation to slow them the merger process. They went to the point of sending public prosecutors to the National Bank of Poland board meetings where the merger was to be discussed and approved.
At a meeting of the National Bank of Poland The Polish government asked for and received a three week break in which they might meet with UniCredito to work out a compromise.
The resulting compromise is that UniCredito will keep some 260 banking offices that it wanted and will merge them into Bank Pekao. And additional 200 banking offices, many of which some observers claim UniCredito did not want anyway, will be sold at International auction along with the Bank BPH brand.
Bank Pekao will become largest bank on the Polish market. Bank BPH will remain on the Polish market and may offer the opportunity for another foreign bank or foreign capital to enter the Polish banking sector.
Polish Prime Minister Kazimierz Marcinkiewicz described the deal as "a compromise that is good for all parties. It is good for Pekao, which in long-term will become Poland's biggest bank and is also good for the other bank, BPH, which will retain a presence on the Polish market. It is also good for the Polish Treasury which can now say with a clear conscience that the privatisation agreement reached with UniCredito in 1999 has been confirmed and it all leads to the conclusion that it is good to invest in Poland."
The head of the National Bank of Poland, Leszek Balcerowicz, said "We have completed an obstacle course."
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