UniCredit wins Polish law change

19 October 2006

The Polish parliament's lower house yesterday agreed to adopt a new banking bill that will allow Italian bank UniCredit to go ahead with the merger of two of its Poland-based banks.

The new legislation should see UniCredit merge Bank Pekao and Bank BPH, to create one of the leading lenders in the central European region, although conditions laid down by the Polish government mean that BPH will be broken up, with part of the company sold off.

However, there has been significant opposition to the law changes, with both opposition political parties and the country's central bank voicing their criticisms.

There are concerns that the legislation, brought in specifically for the UniCredit case, will allow spin-offs of local lenders, threatening the stability and regulation of the financial sector, according to Reuters.

The news agency also reports that opposition politicians are worried that foreign-owned Polish banks could move abroad, avoiding domestic supervision.

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