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CEE Market Overview June 2018

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

  • 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

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