Foreign banks target fat cats

The private-banking and wealth-management sectors in China and eastern Europe have the greatest potential for growth worldwide. "A lot is happening in this business, and the best indicator is the number of mergers and acquisitions [M&A]," says Michał Tokarski, a manager with KPMG Corporate Finance. Last year saw 258 deals completed, up from 142 in 2004.

Worldwide, the private-banking market is populated by many small institutions, but larger banks often seek to achieve economies of scale, either by acquisitions or organic growth, and often put pressure on their smaller rivals to consolidate. According to a recent KPMG report on M&A in the private-banking sector, some 54 percent of executives cited increased competition from larger consolidated competitors as the primary forces driving structural change.

However, M&A are not yet dominating the Polish sector. "The Polish private-banking services market is still not well developed and it's hard to expect consolidations on such a market,"  Tokarski says. The domestic market is relatively new, but is proving lucrative for the world's biggest players.

A wealth of opportunity

Currently, according to Tokarski, private-banking services in Poland are offered by banks, and there are no institutions specializing in services for the wealthiest individuals, whose number is rising. He says that as the market, the economy and customers' wealth grows, so too will their expectations.  "About 500 people have assets worth more than zł.15 million, 10-15,000 people have more than zł.1 million and 35,000 people own about zł.500,000 - that's the market for private-banking services in Poland," he estimates. 

However, some private-banking services here are already available for people with savings of zł.100,000 and a monthly income of zł.5,000. Tokarski says this is because some institutions offer private banking in order to increase their prestige.

Twelve banks are in this game now, but the number will soon rise. While UBS, which is planning to enter the Polish market, will serve customers with at least zł.1 million, Noble Bank, which started last month, welcomes those who have 10-times less than that.