Matthew Day in Warsaw -
While it may not surprise Marcin Mosz that a bank regards him as a potential client, it may come as a surprise that the bank is Polish. As assistant director of financial institutions for ABN Amro in the City of London, he lives and banks in the UK. But along with other wealthy and successful Poles working abroad, he will soon be the subject of attention from a leading Polish bank eager to sign him up as a client.
The private banking arm of Pekao, one of Poland's biggest banks and a division of UniCredit Group, plans to develop a programme aimed chiefly at Poles who have, for whatever reason, struck it rich abroad.
This marks a departure from the normal banking script for Poles working abroad. Up until now, banks have concentrated solely on providing financial services for the bulk of the hundreds and thousands of Poles who flocked to the UK and Ireland after Poland's accession to the EU in May 2004. Leading high-street bank PKO BP, in a typical example of the cross-border dealing, struck an agreement with the UK's NatWest, a member of the Royal Bank of Scotland Group, to help Poles open accounts and send money home.
Yet while simple and effective, these services, says Justyna Jackholt, the manager at Pekao charged with developing the programme for targeting wealthy expatriate Poles, had little value for the affluent and financially astute emigrant. These people, she adds, represent an as-yet untapped source of clients.
"It's a niche market," she explains. "We do not aspire to compete with other banks that have gone for the mass market that offer money transfers. Many people went to the UK in 2004 and now a number of them have proper careers and have a high income, but very often their family life is still here, and they bank in Poland. I know a lot of people in the City and they work in London, but every weekend they come home to Poland. They have their houses here and their family here, and these are the people we hope to attract. We think about quality rather than quantity. It's about the assets the clients have and are willing to invest."
When it comes to quantity, Jackholt, who spent 10 years in London, estimates that there are perhaps now 1,000 Poles working in the City, plus an unknown number of others scattered across the UK, who fit Pekao's customer profile of having €139,000 in free assets. While this may seem few in the world of banking, she's confident that Pekao's offer of banking and investment services, which is still very much in the development phase, will attract the numbers needed.
A key reason for her confidence, she says, is the relative strength of the Polish economy – predicted to grow by 5.0-5.5% this year – and the good investment opportunities it affords in comparison to the UK. "Poland is good country to invest in," she argues. "It's an emerging economy and there are still many possibilities to invest. Therefore people who know the financial markets will be interested in Poland's, and this should help make our product attractive and competitive to those offered by British banks."
ABN Amro's Mosz admits that an offer of investment products in Poland could prove attractive to expat Poles, as emerging markets can offer "higher returns than those in the UK." However, he adds that another key attraction is the falling rate of sterling against the Polish zloty. "When I first came to the UK you got six to seven zloty to the pound, now I only get 4.8, so it's safer for me to keep all my savings back home [in Poland]. Even if I decide to stay in the UK, I can make money in Poland."
While the fundamentals may look good, there could still be difficult challenges for Pekao to overcome if it's to make the business a success.
"It's a natural inclination to move to an up-market service, but there is a different level of demand that would be a challenge for organization like Pekao to serve," reckons David Putts, head of personal financial services for Central Europe at HSBC. "These customers are seeking the ability to really link up their accounts across two different markets and they also want the bank that's serving them to take a view of their credit profile, if possible, in both markets. So you can run into problems, if you say, 'I want to buy a house in Poland and buy one in the UK'. You'll find one banking institution is not able to take a holistic view of their creditworthiness."
This, along with a small client base and competition from UK banks, may deter other Polish banks from entering the fray. BRE Bank, Poland's fifth-largest bank, has announced that it plans to open a branch of its subsidiary mBank in the UK, but, says Magdalena Ossowska, an mBank spokeswoman, it will be aimed at the mass market.
Jackholt says that in November she and her team will travel to the UK to show off Pekao's offer to potential clients. It looks as if they could be the only Polish show in town.
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