Of the 10 countries to join the EU last month, Poland, Hungary and the Czech Republic have been identified as offering the most opportunities for wealth managers. According to a report by Datamonitor, the relatively high national savings ratios in the three countries offer an encouraging sign to banks looking at entering the wealth management sector in central and eastern Europe. "In comparison to the UK, with a national saving ratio of 13.1%, individuals in all three countries save, on average, a far greater proportion of their disposable income," says the report.
In Poland, particularly, the private banking industry has shown signs of gathering pace as the number of wealthy individuals increases. Poland?s mass affluent liquid assets account for nearly 70% of all mass affluent liquid assets in central and eastern Europe. And the number of high-net-worth individuals in the country has grown steadily since 1998, although it slowed slightly after 2001, increasing by 5.4% up to 2002. At the end of 2002, Poland had 239,000 mass affluent consumers and 41,000 high-net-worth individuals.
The growth potential of the market is encouraging both foreign and domestic retail banks to broaden their services in Poland to wealth management. Last year, Citibank Handlowy launched its mass affluent offering, CitiGold Wealth Management, in Poland, which offers personal financial planning to customers with $100,000 to $500,000. The bank is also considering offering services to high-net-worth investors in the country with investable assets of more than $500,000. ?We think there is a deep group of people who have serious money in eastern Europe, and especially Poland, where we think there are around 2,000 potential customers,? says Arthur Klimczak, managing director of Citibank Handlowy?s wealth management division.
?At present in Poland, banks offer services for the mass affluent, but high-net-worth individuals use the Swiss banks. But I believe that locals are not necessarily comfortable with dealing with foreign advisers. They would prefer well-trained staff who speak Polish in a local environment,? he adds.
Foreign banks without a presence in Poland are also being attracted to the private-banking opportunities in the country. Danish bank, Jyske Bank, opened up a private-banking office in May to cater to the mass affluent market. It serves customers with a minimum investment of e15,000. "There are very few people in Poland who can have e5 million to invest, and the [ultra-high-net-worth market] is not our target. We want to offer a private-banking level of service to customers who (for many other banks) are only retail customers," says Radoslaw Kiebasinski, head of Jyske Polska.
According to Datamonitor, Polish investors? financial knowledge is improving. This will increase competition among the banks, and speed up the growth of Poland?s wealth management industry.