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Portuguese bank Millennium BCP hinted on July 29 that it will not be forced to sell its Polish unit under a restructuring plan agreed with the EU in return for a bailout. The suggestion will likely disappoint a host of potential suitors.

BCP last year drew €3bn in convertible bonds from a recapitalisation line from Portugal's €78bn bailout by the International Monetary Fund and the EU. The bank agreed in return to implement a restructuring plan, and last week the European Commission announced it has finalised discussions on the plan and will adopt a decision soon.

Although he said the details will not be revealed until September, BCP CEO Nuno Amado said on July 29 that the plan includes a condition on Polish subsidiary Bank Millennium. "Poland, Mozambique and Angola are core, they contribute positively to Millennium BCP's performance, to the capital base," he said, according to Reuters. "They don't destroy capital, on the contrary, they create capital."

Analysts in Portugal reportedly say the plan may include the sale of BCP's Romanian unit, given that the EU sees the Polish unit as a main growth trigger and will enable the group to repay the bailout.

That will likely disappoint the likes of Pekao, Bank Zachodni WBK and BNP Paribas, who are reported to be on the hunt for acquisition targets. Speculation that the Polish banking sector is set for another wave of consolidation - following a series of M&A deals in 2011 and early 2012 - kicked off in mid-June, when the country's biggest lender, PKO, bought the local unit of Scandinavian bank Nordea.

The top players are now reported to be fighting to keep up with PKO. The theory is that they are now in a race to hoover up the Polish assets of those European banks struggling to keep up with capital ratio requirements, as was seen in a series of deals between early 2011 and 2012.

Potential targets are said to include agricultural specialist BGZ and Alior. However, Millennium has reportedly been on the cusp for some time. BCP attempted to sell the Polish subsidiary in 2011, but took the asset off the market the following year after a restructuring of the group. Its return to the shop window has been mooted ever since, but given that it's one of the few businesses in the group making money, BCP is understandably loathe to exit.

The parent posted a worse-than-expected first-half loss of €488m on July 29. However, Bank Millennium saw second quarter profit rise by 15% year on year to €31m. A surge in retail loans saw margins boost, BCP said.