Four banks have reportedly started due diligence of Raiffeisen Polbank, which Austria’s Raiffeisen Bank International (RBI) is seeking to sell, local media reported on July 22.

The suitors are Poland's state-controlled lender PKO BP, state-owned insurance company PZU – which owns Alior Bank – as well as ING’s Polish unit ING Bank Slaski and French bank BNP Paribas, newspaper Puls Biznesu reported. Contrary to earlier reports, Spanish bank Santander is not among the interested buyers.

PKO BP and PZU appear frontrunners to clinch the deal given the Polish government's efforts to boost the role of state capital in the banking sector. This so-called strategy of “repolonisation” of banks in Poland has already seen PZU buy into Alior Bank, while Alior is in the process of taking over BPH from GE Capital.

For RBI, due diligence marks a step forward in the sale Raiffeisen Polbank. The Austrian bank has spent 18 months trying to offload the business, but provoked little interest until it announced it is ready to carve out the portfolio of forex loans at the unit. Uncertainty over the government's plans to come up with a scheme to help borrowers has all but stalled M&A in the Polish banking sector since January 2015.

The Polish bank sector is still awaiting legislation aimed at helping the half million or so forex borrowers convert their mortgages. The banks are threatened with billions in costs. That has made valuations almost impossible to agree. An earlier report claimed RBI was interested in offloading Polbank for €0.8bn-1.1bn. 

Since the government of Law and Justice (PiS) took over late last year, however, the conversion appears only a question of time. That has allowed the likes of RBI to make the decision to strip out the forex loans. GE made a similar move and sold BPH to Alior in April.

Without having to worry about problematic forex portfolio of Raiffeisen Polbank suitors like ING Bank Slaski or BNP Paribas are said to be interested in bulking up to hedge against negatives manifest on the market, such the new bank tax or record-low interest rates. They stand little chance against state-controlled giants, however, Puls Biznesu claims.