Polish entities are too small
Polish entities operating in the financial sector should consolidate to increase market share and expand the offer, what will allow you to compete with institutions from Western Europe – results from the EY report.
In the opinion of EY experts, in 2025 will develop technological competences, look for diversification and increasing the scale of action through mergers and acquisitions. “European financial institutions expand areas of activity and are looking for such projects and entities that will allow them to increase resistance to the expected further decreases in interest rates, including through even greater interest in the asset management area. The discussion about consolidation is supported by the increase in European banks’ shares and their profitability. Mergers and acquisitions They also remain a method for the implementation of the strategy for increasing commission revenues ” – pointed out Paweł Preuss from EY.
The merger and acquisition market
As the authors of the report said in the region Central and Eastern Europe in 2024 28 transactions were made in the banking and capital markets sector. In 2023, 25 were recorded. The increase in activity in 2024 is also evidenced by the volume of the value of the transaction, which amounted to $ 2.7 billion and is greater than in all previous analogous periods. Banks, especially medium -sized, consolidate to create entities with greater market strength and in -depth sector knowledge. As indicated in the report, one of the largest last year’s transactions was the takeover of Velobank by Cerberus Capital Management with a transaction value of $ 270 million.
The one who creates a strong player in the region will win
“The activity in the field of mergers and acquisitions is the largest in the banking sector among the financial institutions we examined because the ankle increase in scale and acquiring new competences by taking over the competitor directly affects their competitive position. This process will accelerate, among others, thanks to technological progress, powered by the dissemination of generative applications of artificial intelligence increasing productivity and innovativeness of the offer. Forecast interest rate discounts can give an additional impulse for consolidation. Banks in the region operate on a relatively small scale. The most who creates a strong, regional player will gain the most, “noted Magda Warpas from EY.
The report indicates that the Central and Eastern European insurance market is also very active in the merger and acquisition field, where 18 transactions with a disclosed value of $ 332 million were recorded in 2024. The authors of the report noticed that in Poland transactions took place primarily in the broker sector.
“Model Managing General Agent (a specialized type of agent or insurance broker, which is entitled to offer insurance and take risks on behalf of the insurer – PAP) emerges as a breakthrough, offering a new look at operational agility in a strictly regulated space. Consolidation in the brokerage sector should persist thanks to strong and stable margins, framed markets and strategies, and strategies. focused on international expansion, “Warpas pointed out.
Property management and assets
In 2024 he struggled with difficulties in Central and Eastern Europe region Property and assets management sector – the authors of the report pointed out. As a result, 10 transactions occurred on it, which is an increase of 100 percent. compared to 2023. However, their disclosed value is much lower compared to banking and insurance sectors.
Interest rates and inflation with the main challenges
In the opinion of Magda Warpas, high interest rates and inflation are the main challenges for this sector next to the pace and implementation method generative artificial intelligence, which enables improvement of customer efficiency and service. “Falling interest rates They can become a growth catalyst, and attracting the best talents and effective use of artificial intelligence will be factors diversifying Wealth and Asset management institutions ” – predicts an expert.
Private equity funds
The authors of the report also pointed out that Private equity funds (A type of capital investment accumulating funds mainly from institutional investors and wealthy private individuals – PAP) are observed attentively with the property management sector and assets, “to pick out entities in time for further consolidation, when smaller players will struggle with the costs of maintaining competitiveness on the scale -oriented market, which is technologically promoted to advanced companies.”
In the report “The 2025 Outlook: M&A Trends for Financial Services in CEE” EY was used data from the following countries: Albania, Bosnia and Herzegowina, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Greece, Hungary, Kosovo, Latvia, Lithuania, Malta, Moldova, Macedonia, North Macedonia Romania, Serbia, Slovakia, Slovenia, Ukraine. (PAP)
