According to a PAP interview with Jan Monkiewicz, the Head of Insurance and Pension Funds Supervisory Commission, a decision on allowing PTE PZU to merge with PTE Skarbiec (BRE Bank’s subsidiary) could be taken ‘as early as in July’. The process is taking longer-than-expected and, according to market rumours, the decision is likely to be negative, as the commission is concerned with market concentration in this sector (it recently rejected a merger of PTE Dom with PTE Wintherthur). The agreement between the companies has an option to resign if approval is not received by the end of August 2006. In our view, the delay and the probability of a negative decision are bad news for BRE Bank and a negative trading impact should be expected. The results of PTE Skarbiec have been poor and the business has been for sale since the beginning of 2005.