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Euromoney Sibos Insider: Central Europe will bounce back
It seems that central Europe has enjoyed a reversal of fortunes. As an emerging market, traditionally the region has presented a growth opportunity until it was hit by the credit crisis. Now ING’s global head of financial institutions thinks the region is looking increasingly alluring.
In an interview with Euromoney | Sibos Insider, Malcolm Brown explains that central Europe is fast overtaking the west for opportunities.
“Central Europe is very interesting at the moment. Three years ago the reaction to the area was that it was ripe for meltdown, consequently there was a big withdrawal of exposure to the area. Now its western Europe – the eurozone – that’s viewed with fear,” says Brown.
The eurozone crisis has left western Europe looking incredibly fragile in terms of investment opportunities, and the preceding banking crisis cast a great deal of doubt on the stability of some of its leading financial institutions. Central Europe however is looking comparatively stable, and it certainly seems that banks looking to expand may get a better return on their investments outside of the eurozone.
“Central Europe looks set to benefit from three years of pent up supply – and the area is giving a better risk-return ratio than the West,” says Brown.
Where does ING think the best targets for expansion are? Russia has always been a powerhouse in the region. Poland has been a surprise winner in the chaos of recent years, emerging more or less unscathed from the crisis and with a strong enough economy for financial institutions looking to expand their breadth or depth in the region.
“When you think of the region, you simply can’t avoid Russia. Poland is also looking very attractive – it has come through the crisis better than anyone else and has the strongest stock market in the regional listings,” says Brown.
Euromoney reports from the Sibos conference in Toronto all week. Visit www.euromoney.com/sibos for all the latest news and interviews. During Sibos, you may sign up for email alerts from Sibos, including daily news and interviews with senior people in the market.
