Polish government still faces EC probe

The European Commission (EC) has said that it will not halt its investigation into whether the Polish government broke EU law when it opposed the merger of Pekao and BPH - both owned by Italian Unicredit (formerly Unicredito) - though Warsaw's opposition officially ended after it struck a deal with Unicredit in April.

"We are neither lawyers for Unicredito nor the lawyers of the Polish government. We are the European Commission and we have to safeguard the functioning of the internal market," said EC spokesman Oliver Drewes.

The Polish government had blocked the merger for months, arguing it would cost too many jobs and would stifle competition.

According to the deal between the Polish government and the Italian lender, Unicredit agreed to sell off 200 branches, selected from BPH's and Pekao's combined network of around 1,250, within 30 months. Unicredit will also sell the BPH brand name, and has promised not to cut any jobs for two years.

"Both sides agree that Unicredito will undertake necessary steps to carry out and complete the transaction within 30 months at the latest," the Polish Treasury Ministry said in a statement. "The agreement will guarantee that BPH remains an independent bank on the Polish market."

The Polish government will have to change banking laws to allow the split of BPH, but it is unknown when those changes will be made. (Reuters)