The agreement signed on Wednesday between the Polish government and UniCredito Italiano greenlights the sale of 200 of the 477 branches of Bank BPH as well as the brand name of the bank. The remaining branches will be incorporated into Bank Pekao SA, and employees will receive two-year guarantees for employment. The agreement was initialed in the Prime Minister's Chancellery by UCI's CEO Alessandro Profumo and the treasury ministry.

In the briefing that followed, Prime Minister Kazimierz Marcinkiewicz said that the compromise reached was favorable to both sides. "The second-largest, and soon to be the largest, bank benefits from this agreement, and so does bank UniCredito as well as the State Treasury, which can say that the privatization agreements of a few years ago have been consummated," the Premier said.

The merger of the Italian UniCredito and the German HVB (to which BPH belonged), which the European Commission approved in October 2005 generated concerns about the merger's affect on the European market. The Polish government was against such a turn of events, claiming that the banks' merger on the Polish market would constitute a violation of the 1999 privatization agreement, in which UCI had committed itself to not carrying out investments competitive to Pekao SA in Poland.

Following yesterday's announcement, the Banking Supervision Commission's has permitted Unicredito Italiano to execute voting rights from 66.75% of shares in Bank BPH, in which the Italian bank took over 71.03% via the merger with Germany's HVB, the central bank said on Wednesday. This decision paves the way for the merger of UCI's Polish holdings Bank Pekao SA and BPH. The merger of Pekao SA and BPH will create the country's biggest bank, with less than 30% of the market.

UniCredito Italiano also declared Wednesday that it would introduce its shares to the Warsaw Stock Exchange and set up a Competence Centre in Poland, according to the governor of the National Bank of Poland and the watchdog's head Leszek Balcerowicz. Balcerowicz was unable, however, to give schedules for these plans. Balcerowicz also stressed that UCI was the biggest bank in Poland to give guarantees of preserving liquidity of shares on the bourse.