*

Poland ranks alongside Italy, Germany in terms of M&A

benefits

*

Plans Poland re-entry in Q4, hiring investment bankers

there

*

Focused on expanding market share organically in Italy

*

Can sit on Commerzbank stake, no pressure to do anything

(Adds details on growth plans in Poland in paragraphs 8-9)

By Valentina Za

MILAN, Sept 17 (Reuters) - UniCredit CEO

Andrea Orcel on Wednesday named Poland, alongside Italy and

Germany, as the countries where a merger or acquisition could

most benefit the bank.

Since joining UniCredit in 2021 after a three-decade

investment banking focused on bank M&A, Orcel has said the

Milanese lender would consider deals across its 13 markets.

UniCredit's bid for Italy's Banco BPM fell through earlier

this year, while Germany is opposed to a deal with Commerzbank,

in which UniCredit holds a 26% equity stake plus 3% in

derivatives. The derivatives are set to convert by year-end,

bringing UniCredit's holding to 29%.

UniCredit also owns 26% of Greece's Alpha Bank, partly

through derivatives, with regulatory clearance to increase that

up to 29.9% expected in the fourth quarter.

MARKETS OFFERING M&A BENEFITS

Orcel told investors at a BofA Securities conference that

Italy, Germany and Poland were the markets where M&A "would make

very material change to our equity story ... a quantum

difference in what we are and what is our profitability."

Italy and Germany are UniCredit's largest markets.

"Poland is the trickiest, because by not being there and

going organic, we don't have synergies, or we have more limited

synergies than an in-market deal," he added.

Banks can more easily cut costs when buying another lender

in a country where they are already present. Commerzbank owns

Poland's MBank ( MBAKF ). UniCredit exited the country when it sold Bank

Pekao in 2016-2019.

Orcel said in August UniCredit planned a re-entry in the

fourth quarter, after buying local banking technology services

provider Vodeno and Belgian digital bank Aion, which operates in

Poland.

UniCredit is also hiring investment bankers in Poland,

including a former Santander team, the local press has reported.

INCOME BOOST FROM EQUITY STAKES

Following the collapse of the Banco BPM deal, UniCredit will

expand its domestic market share without M&A. It can sit on its

Commerzbank stake, having capped any potential loss and locked

in a 20% return on the investment.

"We're just waiting ... if things go well, we can't be

happier," Orcel said. "We can just sit there, we're no longer

hostage of the market," he said in reference to the Commerzbank

stake.

Orcel said various equity stakes UniCredit had acquired in

recent months, plus the full ownership of its life insurance

business, cost up to 6.75-7.5 billion euros of capital it holds

above its targeted threshold.

But he said the net income boost from the stakes, and

another accounting benefit related to its insurance business,

increased the excess capital to 10-11.5 billion euros, meaning

up to 4.5 billion could be used to improve an ordinary

cash-and-share payout of 80%.

The bank will decide between 2028 and 2030 how to use the

excess capital, or return it to shareholders.

($1 = 0.8445 euros)

(Reporting by Valentina Za; Editing by Cristina Carlevaro, Jane

Merriman and Emelia Sithole-Matarise)