August 24, 2017 / 1:38 PM / a year ago

UPDATE 1-Commerzbank out of running for Deutsche Bank Polish assets - sources

(Adds details, background)

By Agnieszka Barteczko and Marcin Goclowski

WARSAW, Aug 24 (Reuters) - Commerzbank is out of the running to buy Deutsche Bank’s Polish assets, leaving the bidding to Spain’s Santander and Portugal’s Millennium bcp, three sources familiar with the situation said.

Deutsche Bank AG began selling parts of its Polish banking operations in an effort to free up capital, market sources said earlier this year.

Commerzbank’s Polish mBank, Santander’s BZ WBK and Millennium Bank owned by the Portuguese bank were among potential bidders, the market sources had said.

Millennium bcp said in July its Polish unit went through to second phase of the process.

“Millennium and Santander’s BZ WBK are left in the deal. mBank is out,” a person familiar with the situation said. Two other sources confirmed the information.

Deutsche Bank, Millennium bcp, Santander and Commerzbank declined to comment.

Poland’s banking sector has seen a number of mergers and acquisitions, driven by tough competition, low interest rates and efforts by the country’s eurosceptic Law and Justice (PiS) party to curb what it sees as excessive foreign ownership.

Polish state-controlled insurer PZU and investment fund PFR agreed to buy 33 percent of UniCredit’s Pekao, Poland’s second biggest bank, in December last year.

A deal involving Deutsche Bank Polska, Poland’s 12th biggest lender in terms of balance sheet size, could be valued at about $450 million, sources said earlier this year. (Additional reporting by Alexander Huebner and Andreas Framke in Frankfurt, Jesus Aguado in Madrid and Andrey Khalip in Lisbon; Writing by Agnieszka Barteczko; Editing by Edmund Blair)

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