Affluent undertakings
Noble Bank's share price saw a dramatic rise at its debut last week. The value at closing reached zł.16.80, marking an increase of 53.3 percent over its zł.10.50 issue price. The maximum price the stock reached was close to zł.20 that day.
"The debut was great. We had expected the price to rise, but not to reach such level," says Henryk Pietraszkiewicz, president of Noble Bank.
"I thought I understood the rules of the stock exchange, but looking at the debut [result], I am no longer so sure of that," said Leszek Czarnecki, Noble Bank's main shareholder and chairman of its supervisory board.
Distinguished debut
Pietraszkiewicz says that interest among investors was very high. Noble Bank issued 15 million H-series shares, out of which 8.25 million were designated for institutional investors, and three tranches of 2.25 million shares were set aside for individual shareholders. Getin Holding - Noble Bank's main shareholder - sold the same number of shares, doubting the figure for the total initial public offer. The reduction rate amounted to 92 percent.
"Investors know investing in [Noble Bank] means investing in a stable stock with a high growth potential," Pietraszkiewicz says. "In addition, for the last three years no new bank has entered the WSE and from that perspective a certain explosion of interest took place," he adds.
Noble Bank raised zł.150 million from the floor, which the company plans to spend on further development. Part of the money will be used to boost the number and value of loans offered by the bank. The rest will help the bank maintain its solvency ratio and open new branches.
"We are looking for organic growth, an expansion of the sale networks," says Pietraszkiewicz. "We are going to continue conquering the market dynamically."
Andrzej Powierża, an analyst from brokerage house DM PKO BP, says that, aside from the acquisition of new capital, the debut on the WSE gives the company an opportunity to carry out a well thought-out promotional campaign. "So far the bank has built an image through its business model, ads in industry magazines, etc. Now it is creating situations where it's talked about," claims Powierża.
Fast track to the top
Noble Bank is one of the fastest-developing financial institutions in Poland. Set up a year ago, now it is the fifth-largest mortgage lender in the country. The value of mortgages granted by the company in 2006 amounted to zł.3 billion, compared with PKO BP, the leader in the field, which sold mortgages worth zł.10.1 billion. Noble also has its own financial advisory - Open Finance, a leader in financial consulting with a network of 172 consultants based in over 100 cities and towns across the country, as well as 47 mobile advisors.
All that has been achieved since February 2004, when Jarosław Augustyniak, Krzysztof Spyra, Maurycy Kühn and Leszek Czarnecki - the largest shareholder in Getin Holding - set up Open Finance. A year later, thanks to Getin Holding's acquisition of Wschodni Bank Cukrownictwa, the group was strengthened with a banking license and started Noble Bank, which then became a 100-percent shareholder of Open Finance.
"I then announced that we would introduce the institution to the Warsaw bourse. Since that time - that was June 2005 - not even two years have passed and we are listed as a unique financial institution in Poland," says Czarnecki.
Target demographic
"Our offer is directed to people who own financial assets of zł.400,000 or more, as well as a monthly income of some zł.30,000-400,000," says Jarosław Augustyniak, deputy president of Noble Bank.
Adam Dakowicz, deputy director at Bre Private Banking, says it is difficult to estimate the market, but he believes that private banking institutions are investing some zł.40 billion belonging to individuals whose liquid assets are worth more than zł.500,000. The Gdańsk Institute of Market Economics (IBnGR) estimates the total number of individuals in Poland with at least zł.500,000 in their pockets to be around 60,000.
"This number grows by 10-15 percent a year. There is room for further growth because the zł.40 billion being invested constitutes only 40-50 percent of all assets available on the market," adds Dakowicz.
DM PKO BP's Powierża believes this group of people will be enlarged by those who sell their firms as well as those who invest in the real-estate market. "This group of people will still grow because Poles are generally becoming more affluent. Consolidation processes on the market show that the number of mergers and acquisitions will increase too," says Powierża.
Dakowicz says that another reason for the market's growth is increasing awareness among Poles. "In some countries, the level of assets invested reaches 80 percent. This demonstrates potential," he says.
Currently, Noble Bank has over 1,000 customers, and last year the average customer invested roughly zł.350,000 in products offered by the Noble Bank group. However, Noble Bank's customers are not only those ranked on the list of the richest Poles. A growing number of less affluent citizens come to Open Finance for advice.
Growing affluence
According to the Ministry of Finance, in 2005 around 0.88 percent of all Polish taxpayers were included in the 40-percent income-tax bracket, which means they earned more than 74,000 per annum. The number of people whose income exceeded zł.34,000 per year and who were included in the 30-percent income-tax bracket (for non-self-employed persons) amounted to 4.66 percent. This means that at least 1.3 million Poles fall within Noble Bank's target demographic.
Bre Bank's Dakowicz quotes the findings of a report presented at the CEE Private Banking conference last December, which indicate that the number of affluent Poles grew by 14 percent last year. "This means that the figure grows three times faster than the Polish economy," he adds.
At the same time, the National Bank of Poland estimates that between 475,000 and 600,000 Poles earn at least zł.5,000 per month and that number grows by 10-15 percent a year.
