Credit Suisse Moves Polish Stock Trading to London
Credit Suisse Group AG (CSGN) will move its Polish equity trading to London from Warsaw after turnover on the country’s stock exchange slumped last year.
The bank, which moved its stock-dealing business to the Polish capital in 2010, was the third-largest brokerage on the Warsaw Stock Exchange (GPW) in the first quarter after Citigroup Inc. (C) and Warsaw-based Ipopema Securities SA (IPE), according to data on the bourse’s website. Stock trading volumes declined 24 percent to 202.9 billion zloty ($64.3 billion) in Warsaw last year amid Europe’s financial crisis and slowing economic growth in Poland.
“We have decided to refocus our business and move it to London,” Marek Gul, head of Credit Suisse’s operations in Warsaw, said by phone today. “It’s to early to talk about staff changes” and Credit Suisse will continue its investment banking services from Warsaw, Gul said.
While Credit Suisse, Switzerland’s second-biggest bank, scales down its Polish business, some foreign competitors are strengthening operations in the European Union’s largest eastern economy. UniCredit SpA (UCG), Italy’s largest lender, made Poland its new hub for the equity capital market segment in central and eastern Europe last year, after it closed equity brokerage in western Europe, cut jobs in London and Milan and shut its securities unit in Russia.
Societe Generale SA (GLE) is adding jobs and plans to “significantly boost” activity on Polish equity markets, Krzysztof Walenczak, head of the French bank’s Polish unit, said in an interview in Warsaw on March 20.
Warsaw’s WIG20 Index (WIG20) of the country’s biggest and most liquid stocks has lost 12 percent this year after a 20 percent advance in 2012. The MSCI Emerging Markets Index (MXEF) has declined 5.5 percent in 2013 after a 15 percent gain last year.
The decline in Polish trading volumes last year compares with a 41 percent drop in equity turnover on the Moscow Exchange, as trade in the biggest Russian companies moved to New York and London, according to data on the bourse’s website.
Credit Suisse in February increased its cost-cutting program by 400 million francs ($430 million) by the end of 2015, following 4 billion francs in planned reductions announced since 2011. Credit Suisse said previously it planned to make savings at the investment bank through synergies in equities and efforts to “rationalize” businesses in some regions in fixed income, underwriting and advisory. Execution is being consolidated into hubs in the U.K. and Hong Kong.
In December, the bank said it would move its Russian capital-markets and advisory businesses from Moscow to London to cut costs, according to two people with knowledge of the matter.
“Our Polish clients will benefit from a more centralized and efficient hub in London where a dedicated team continues to service them,” Marc Dosch, a Zurich-based spokesman for Credit Suisse, said by e-mail today.
The Warsaw exchange, founded two years after Poland’s communist government collapsed in 1989, is central Europe’s biggest equity market. The bourse currently lists 437 companies on its main market, including PKO Bank Polski SA, the largest Polish bank, and PZU SA, the country’s biggest insurer, with a combined value of 693 billion zloty.
Poland was Europe’s third-busiest market for equity deals in the first quarter following the U.K. and the Netherlands with a combined 14.4 billion zloty in offerings, according to data compiled by Bloomberg.