Treasury Ministry wants to merge loss making BGŻ with profitable PKO BP

The Treasury Ministry is considering the possibility of merging Bank Gospodarki Żywnosciowej (BGŻ) and PKO BP. In this way, the problem of the latter's privatization would be solved. At the same time the potential merger would delay PKO BP's debut on the Warsaw Stock Exchange (WSE) which was envisaged for the fourth quarter of 2003. For the Treasury the merger would be an easy way for it to get rid of BGŻ's and its difficulties as the bank has been in crisis for three years. The bank's return on capital and financial results are continually deteriorating, last year it posted a net loss of zł. 264.3 million. Pessimists claim that by merging with BGŻ, PKO BP will not become more competitive since it will not acquire anything new or worth. On the contrary it will face new difficulties posed by combining IT systems, as well the need to further restructure employment and the branch network. According to unofficial information the merger will take place at the end of next year. (Puls Biznesu, p. 6) A.Z.