CEE Market Overview June 2018

Following our recent trip to Prague and Warsaw, we have summarized our core findings for your attention:

Overview

  • For most economies in Central and Eastern Europe, 2017 was one of the best years since the global financial crisis, especially Poland and Czech Republic, where growth remains strong and the unemployment rate is at record lows. Direct foreign investment grew significantly with China becoming one of the largest investors in the region. The flow of deals shows that CEE remains a key target for international investors, with Poland the most active market for new listings with IPOs worth close to €1.8bn

  • Total compensation across bulge bracket banks in Warsaw is in line with London and New York. Although base salaries for Warsaw based professionals are 10% to 20% lower by comparison, bonus figures have been noted to be greater in order to compensate for that difference

  • A number of smaller private equity teams who historically source funds from the HNW entrepreneur community have struggled to raise new capital, squeezed by larger players, and are exploring options where they can maintain coverage of their core client group. Allegedly, there has been interest from some individuals within the private equity space to transition into wealth management, where they can further service their relationships

  • Poland’s banking sector is becoming more consolidated, with the expected merger of Alior Bank and PKO as well as the acquisition of Raiffeisen’s Polish assets by BNP Paribas, which will narrow the sector to five core banks. The low interest rate environment has made it difficult for smaller banks to compete as well as provide high returns. Based on that, banks are going through internal management changes, especially reorganizing their management boards

  • Bank Zachodni WBK has also identified private banking as a growth area and strengthened its operations through the acquisition of Deutsche Bank Polska’s retail and private banking businesses

Hiring Trends

  • There has been interest from bulge bracket banks who are looking to add further headcount at junior levels to strengthen their regional coverage out of London

  • Poland’s second biggest bank, Bank Pekao, which is headed by Michal KRUPINSKI, is considering an international expansion as part of their overall growth plan. Having hired several bankers with bulge bracket experience, such as Piotr WETMANSKI as Head of Strategy and Mateusz HOJDYSZ, Director, Group Development & Supervision, both from Bank of America Merrill Lynch, the institution is looking to open a representative office in London to serve the bank’s corporate and private clients in the UK

  • The wealth management segment in the CEE region is  mostly retail focused,  with an emphasis on affluent clients rather than U/HNWs. As such, local platforms looking to expand beyond covering affluent clients are hiring individuals with bulge bracket experience. Notable recent hiring includes Roksana CIURYSEK-GEDIR, Credit Suisse, Head of UK Team UHNWI Emerging Europe, London, who joined Bank Pekao as Vice President of the Management Board, Warsaw

  • Top tier wealth management platforms are strengthening their CEE coverage teams by adding headcount, including Credit Suisse’s hires of Daniel KUBOVY from Raiffeisen Bank as a Senior Relationship Manager and Iordan PARFENIE from LGT as a Vice President, both based out of Zurich

  • Given the consolidation of the banking sector in Poland, some institutions are going through management changes including Alior Bank who have named Katarzyna SULKOWSKA as President of Alior Bank, following the resignation of acting CEO Michal CHYCZEWSKI. Marcin JASZCZUK, a veteran of Alior parent group PZU, has been appointed to the management board

  • Local banks in Poland such as Bank Zachodni, PKO and Pekao, are looking to strengthen their corporate finance teams by adding candidates up to Vice President level

  • Given that mid-cap deals in the CEE region are less attractive to bulge bracket institutions, there have been a number of international boutique advisory firms building out to cover the region such as Alantra, hiring a number of senior individuals in 2017. These include Klaus VUKOVICH, Alexandra NAGLE and Sergej POZAR who joined from UniCredit as Managing Partners and Head of Adriatic Region respectively, and Victor KARADJOV who joined from Raiffeisen Bank as a Partner

Cross Border/Cross Product

  • Following the Brexit vote, candidates are considering returning to the region or are reluctant to leave for London based roles

  • Investment banking, corporate banking, equities and fixed income professional perceive wealth management as an attractive lateral transition

For the Delta house view and related mandates please reach out to Alisa Stadnyk

Best Regards,

Delta Executive Search Team

Posted by Alisa Stadnyk
Monday 4th June, 2018

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