2013-03-07 18:21:16 - “By consolidating smaller banks, leaders could realize significant economies of scale and benefit from cost reductions as a way to offset stagnating revenues.” explains Marcin Mazurek, Director of Inteliace Research, a consulting company specializing in CEE financial-markets research.
The growth in Poland’s banking sector slowed down significantly in 2012. The most reliable driver of bank lending in recent years—retail mortgages—stalled in the last months of 2012, while retail deposits showed significantly slower growth in the second half of the year. In the corporate segment, a significant weakness could be observed as deposits fell strongly and loans did not change much.
The competition among top banks intensified during 2012. Raiffeisen took over Polbank EFG, and Banco Santander’s subsidiaries, Kredyt Bank and BZ WBK, merged; more deals are expected to be closed soon. Bank Millennium, owned by Banco Comercial Português and Nordea Bank Polska, a subsidiary of Nordea Group, are the most frequently mentioned targets.
Not surprisingly, the interest in M&A
is high: it’s the only way for banks to quickly secure sizable market share in the still-promising banking market in Poland. Local players, including the market leader PKO, and multiple foreign banks are rumored to be reviewing such growth options.
In the most likely scenario, the existing market leaders would win the competition, and as a consequence, the market concentration could go considerably higher. By consolidating smaller banks, leaders could realize significant economies of scale and benefit from cost reductions as a way to offset stagnating revenues. As current valuations in the stock market show, larger players enjoy significantly higher valuation multiples than do their smaller peers, which also supports consolidation.
ABOUT THE REPORT
For more information on recent developments in the Polish banking market, please refer to the PPT presentation available at www.inteliace.com/files/2013/00116_TRENDS_IN_BANKING_SECTOR_IN_P ..
ABOUT INTELIACE RESEARCH
Inteliace Research is an independent consulting company that focuses on the financial markets in Central and Eastern Europe. Inteliace Research specializes in management consulting and custom research services, including market-entry strategy, product launch, and performance and benchmarking analysis.
During 2005–2013, Inteliace Research provided its products and services to more than 60 clients, including major CEE banks and several "The Banker" top world banks. To learn more about Inteliace Research, please visit its webpage: www.inteliace.com.