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Bank Pekao pulls out of merger talks with Polish peer Alior

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Bank Pekao pulls out of merger talks with Polish peer Alior

Bank Pekao SA said it is withdrawing from merger talks with fellow Polish lender Alior Bank SA after failing to reach an agreement over the terms of a deal.

The news comes a day after Pekao announced that negotiations for the conditions of the potential tie-up had begun. PZU SA and Polski Fundusz Rozwoju SA, Pekao's top shareholders, have voted against the lender merging with another entity, it said.

State-controlled PZU is also the top shareholder of Alior Bank, with a 31.34% stake, according to S&P Global Market Intelligence data.

Pekao CEO Michal Krupinski said the lender could pursue cooperation "in several fields" with Alior Bank, while adding that Pekao currently does not see any attractive acquisition targets, local or otherwise, PAP reported.

The merger would have reportedly increased Pekao's assets by 70 billion Polish zlotys from 186 billion zlotys. It would have also reinforced the M&A trend in the country's banking sector, which has increased in recent years as lenders seek to boost profitability in a highly fragmented market.

Krupinski also reiterated the bank's intention of paying out 100% of its 2018 profit as dividend, PAP said in a separate report.

As of Aug. 7, US$1 was equivalent to 3.67 Polish zlotys.