Shares in BPH, Poland's 10th-biggest lender by assets, were up more than 17 percent by 0950 GMT on the announcement that GE was considering selling the 90 percent stake it owns in the bank via subsidiaries.

"It is GE’s broader strategy to shift its earnings mix to 75 percent industrial and 25 percent financial, with GE Capital focusing on growing our core, commercial business," a GE Capital spokeswoman, Katja Antila, said in an email to Reuters.

"The bank would be better positioned to realise its full potential, if it was aligned with a company that had a strong commitment to its business plan and growth strategy," Antila said.

Late on Wednesday, BPH issued a statement saying that its majority owner had informed it that it was "analysing strategic possibilities" for selling the bank's shares. The lender has a market capitalisation of about $960 million.

Poland's chief financial regulator, who has in the past taken a hands-on stance in policing mergers and acquisitions in the banking sector, was quoted as saying he favoured a buyer for the GE unit from outside the Polish market to avoid giving any of the existing players too big a share.

Zbigniew Jakubiak, the head of the KNF regulator, also said the buyer should come from a country with a sovereign debt rating no lower than Poland's. That would exclude buyers from Spain, Portugal and Italy.

Industry figures say they anticipate a wave of mergers and acquisitions in the Polish banking sector, which is dominated by the units of major foreign banks, such as Italy's Unicredit and Spain's Santander.

Polish lenders avoided the worst of the toxic loans problems that hit other countries. However, some of the foreign parent banks are saddled with problems in other markets, so may be interested in selling their Polish businesses to repair their balance sheets.

(Reporting By Marcin Goettig; Writing by Wiktor Szary and Christian Lowe; editing by Susan Thomas)

By Marcin Goettig