Poland's government fears that a merger of local units of UniCredito and HVB will lead to excess concentration in retail banking and a high transfer of profits abroad, a Polish newspaper said on Monday.
Poland is the only European Union country yet to approve its part of UniCredito's take-over of Germany's HVB, and the two-month-old cabinet has repeatedly said the Polish leg of the takeover could hurt competition and lead to severe job cuts in Poland.
Financial daily Puls Biznesu said a study by the Polish finance ministry cited concerns that UniCredito would transfer profits from the bank created in a tie-up of its unit Pekao SA and HVB's BPH Bank rather than reinvest them in the country.
Such transfers, aimed to reduce the excess solvency ratio of the merged bank, could reach from 6 billion zlotys ($1.8 billion) to 10 billion zlotys per year, including 3 to 4 billion in dividend payments, it said.
The newspaper also said the ministry's experts estimated the combined banks, Poland's second and third-largest, would control more than 40 percent of the country's mutual fund market and 30 percent of the mortgage business.
That meant that together with the current market leader, state-controlled PKO Bank Polski, two leading banks would control around 60 percent of key retail market segments.
"One can therefore say that in retail banking the merger would lead to a typical oligopoly structure with a 50-60 percent market share," the newspaper cited the study as saying.
The finance ministry was not immediately available for comment.
The government, due to hold talks with UniCredito this week, has called on the Italian bank to sell BPH, saying a 1999 agreement on the sale of Pekao barred it from buying another large bank in Poland.