WARSAW -- Three major Polish banks have signed a letter of intent to form a joint group in what may be the first step to a consolidation of Poland's banking system.


A joint statement, issued last week by Bank Przemyslowo-Handlowy SA, Wielkopolski Bank Kredytowy SA, and Polish Development Bank SA, said their aim was to expand, diversify their operations and improve their market position.


The statement said the three banks "will start cooperation aimed at consolidation in a belief that this way of transforming the banking sector will allow the stepping up of its involvement in restructuring and privatization."


Wojciech Kostrzewa, the president of Polish Development Bank SA, said it was still an open question whether the agreement would lead to the banks' merger.


"For now, we prefer to talk about a banking group because our cooperation can lead both to some kind of a holding group with partners acting as separate entities or equity links," Kostrzewa said by telephone.


He said a joint working group would set a detailed timetable of further consolidation and recommend a form of the group to the banks' shareholders.


He also said the three banks were likely to begin with forming investment consortia to pool their capital and finance bigger privatization and restructuring projects as well as innovative higher-risk programs.