Citibank and Commerzbank may swap Handlowy deal

According to Puls Biznesu, Citibank's difficulties in taking over Bank Handlowy could lead to a dramatic turn of events, under which Handlowy would be taken over by Commerzbank while Citibank would take smaller corporate bank BRE. Commerzbank holds a 48.74% stake in BRE, while Citibank applied two months ago to the Banking Supervisory Commission (KNB) for permission to acquire up to 75% in Handlowy. However, KNB is delaying the decision, as it wants Citibank to take no more than 50% of the Polish bank, keep Handlowy on the Warsaw Stock Exchange (WSE) and maintain its name. If the planned merger of Handlowy and BRE had taken place, Commerzbank would not have a majority stake in the bank resulting from the merger and would keep Handlowy's name. Puls Biznesu therefore points out that Commerzbank is a better fit for Handlowy than Citibank. The latter could take over BRE, which KNB would be more willing to give up, as BRE is newer and has fewer political ties than Handlowy. (Puls Biznesu, page 31) T.J.