UniCredit eyes Poland BGZ deal as it targets European expansion UniCredit, Italy's largest bank by assets, has put in a preliminary offer to buy Poland's Bank BGZ and is considering the long-expected sale of its Ukrainian banking business. The moves are part of UniCredit's long-term strategy to boost its presence in its core European countries including Italy, Austria, Germany and Poland and sell assets elsewhere. UniCredit expanded rapidly in eastern Europe in the run-up to the financial crisis and has taken steps to sell out of countries where it had a limited presence. It sold the bank's Kazakh business for $500m earlier this year. UniCredit already owns Polish bank Pekao, which has been one of its fastest-growing businesses. A purchase of BGZ, which the Netherlands" Rabobank said in June it was putting up for sale, would make UniCredit the largest bank in the country. Local Polish media have valued BGZ at nearly $1bn. Federico Ghizzoni, chief executive of UniCredit, said he was "still in the early stages" of talks to buy BGZ. Regarding the sale of its Ukrainian lender, Mr Ghizzoni said: "We are sounding out the market, it is not easy to leave countries like these. It took two years to sell Kazakhstan. Mr Ghizzoni's comments come as Italian banks, especially those with businesses concentrated on Italy, have struggled to boost profits amid a stark rise in non-performing loans. At Italy's six largest banks, non-performing loan ratios have more than doubled in aggregate since 2008. Nonetheless, UniCredit has fared better than its largest Italian peers Intesa Sanpaolo, Italy's second-largest bank by assets, and Monte dei Paschi di Siena, its third largest, which are almost entirely exposed to Italy. Mr Ghizzoni, who became UniCredit chief executive three years ago, said he expected Italy's economy to stabilise by the end of this year. In daily contacts with Italian entrepreneurs, Mr Ghizzoni said there were signs of recovery among Italy's hard-hit small and medium-sized companies that make up the backbone of the Italian economy. Italy's economy had received a boost on Wednesday from a dramatic win by the centre-left governing coalition of two confidence votes. "Had the stability of the government not been confirmed it would have been very bad," Mr Ghizzoni said. A collapse of the government was expected to have led to rising spreads on Italian sovereign debt which would in turn have hit the loan repayment of Italy's already recession-hit businesses. Nonetheless, politicians still had to make wide-reaching reforms of labour rules, electoral law and the justice system in order to stimulate economic growth in Italy, Mr Ghizzoni added.