Polish brokers will not slice staff, despite market woes

"We are awaiting a large privatization so we must maintain our full potential," said Jaroslaw Kowalczuk, sales director for BRE Brokers. "But even after that, we do not plan to reduce our staff or to take any similarly drastic measures."
If cutbacks aren't on the boards, neither is expansion, however. The days of adding staff to meet growing customer demand seem to be at an end, especially when many global investment houses are cutting back their emerging markets sales and research departments. "Of course we have to keep costs down so our plans to expand will have to wait," Kowalczuk said. "We will have to look for other ways to earn money, for example on the non-public equity market."
Wojciech Sadowski, a board member at CA IB Securities, agreed that the global markets downturn in the wake of the Russian crisis has killed any plans for expansion. He added that any plans to increase the house's number of analysts have been shelved.
"We have never been overstaffed so there is certainly no need for cuts," Sadowski said. But he does not see gloom and doom gripping the Polish market forever because of the introduction next year of pension reform.
"We hope that large structural demand for services in this area will appear, and we want to find many long-term investors," Sadowski said.
At CDM Pekao Securities, diversification will be the key to survival in the new, more uncertain market environment, said its chairman Tomasz Adamski. "We are still doing quite well thanks to, among other things, selling bonds on the primary market," he added. "Being a large brokerage house we can keep our revenue at a sufficient level as long as the market is liquid."
The fact that international brokerages are pulling back from emerging markets does send a worrisome signal to many Polish brokers, though, about what business may be like in coming months. Kowalczuk said this shows the crisis may take some time to overcome. "The equity markets went down because they had been rising for a long time," Adamski said. "However, now I'm afraid of a self-fulfilling prophesy, as everyone is talking about a global recession."
Although the chiefs in Polish brokerages were putting their best face forward in the crisis, the view from the trenches was not as optimistic.
"If I do my work right, I don't have to worry about my job," said an analyst at a bank-owned brokerage house. "But I agree that lower turnovers at the exchange must result in lower profits for brokerages."
"All institutions dealing with the market will eventually have financial problems if this situation persists," added another pessimistic analyst who also did not want to be named. "It's going to be tough."