Business is brisk for Jan Derylo. The head of Poland investment banking at fast-growing central and eastern Europe (CEE) regional boutique Wood & Co has watched valuations soaring as competition for market share heats up. Mr Derylo says acquisition offers with price/earnings ratios of 14 times or more, sometimes well in excess of the target companies' estimates of their own value, are symptomatic of the appeal that Poland holds for investors, both domestic and foreign. Resilient gross domestic product (GDP) growth, a flexible and competitive labour market and a more diversified economy than most of those in the CEE have all stoked demand for Polish assets.
The banking sector is already participating in the surge of merger and acquisition (M&A) activity. During 2010, a consortium of local private equity fund Abris Capital and local brokerage IDMSA finalised the purchase of WestLB's operations in Poland, Getin Noble Bank bought the Polish operations of GMAC and Allianz Bank, and Santander acquired AIG Bank. The largest deal occurred in September 2010, when Santander agreed to buy Allied Irish Banks' (AIB) 70% stake in Bank Zachodni WBK for almost €3bn. Bank Zachodni is the country's fourth largest bank by Tier 1 capital with the third largest branch network, and it recorded the country's highest profits on average capital in 2009, at 26.5%.
