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We love you, we love you not

Personal customers in the Czech Republic and Poland have mixed feelings towards the foreign banks that dominate their financial services industries,a new survey shows. Michael Imeson reports.
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Retail banking consumers in the Czech Republic and Poland do not want to see the emergence of a handful of pan-European “super-banks” and would rather deal with their own banks than foreign ones, according to a survey published on the eve of the countries’ accessions to the EU.

On the face of it, the findings challenge the ambitions of Western banks in central and eastern European (CEE) retail banking markets at a time when the EU is enlarging by taking in 10 new member states next month.

But western European-owned banks already account for 90% of the retail banking sector in the Czech Republic and Poland, so people have little choice anyway. The public is probably not aware of this because banks are usually locally branded. For example, in Poland Dutch bank ING owns ING Bank Slaski and Portuguese bank BCP owns Bank Millennium. In the Czech Republic, Austria’s Erste Bank owns Ceska Sporitelna, France’s SocGen owns Komercni Banka and Belgium’s KBC owns Ceskoslovenska Obchodni Banka.

No ‘superbanks’

The survey shows that 50% of Czechs and 41% of Poles do not want pan-European “superbanks”, as against 24% and 22% who do. And 47% of Czechs and 51% of Poles would prefer to deal with their own country’s banks, while 36% and 23% would not (see table).

Czech and Polish responses are in line with the average of all countries surveyed. This suggests the dream of pan-European banking, long held by some of Europe’s larger institutions, will prove difficult to realise across a greater EU.

The conclusion to be drawn from this aversion to foreign influence is that banks aiming to expand operations to CEE should remain locally branded; and that banks wanting to break in for the first time may find the going tough unless they disguise their non-domestic origins.

Banking Beyond Frontiers: Will Education Consumers Buy It, commissioned by accountants KPMG, conducted by pollsters YouGov and published in March, canvassed the opinions of 2360 bank customers in 10 countries, 211 of whom were in the Czech Republic and 294 in Poland. The other eight countries were France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland (neither an EU member or accession state) and the UK.

Mixed signals

Despite the anti-foreign sentiment, the survey highlights positive responses too, which will encourage foreign banks with their eyes on CEE. When asked to agree or disagree with the statement: “Banking needs to change, with markets being opened up more to foreign banks”, 59% of Czech respondents and 89% of Polish respondents agree, which is above the average for all countries. There is also less satisfaction with their countries’ banking systems than exists among respondents from other countries.

In answering two other related questions, a majority (71% of Czechs, 78% of Poles) said they would consider “buying a financial product from a foreign bank, ie a bank that has its headquarters outside your country” and 88% of Czechs and 90% of Poles would support EU moves to create a single European financial services market. In both cases, these responses are above the survey average.

A wide range of players

So it would seem that Czech and Polish consumers are giving mixed signals. These contradictions can, however, be partly explained by the fact that their negative response to pan-European banking is antipathy towards “a handful of superbanks”. People do not want a few dominant players to monopolise the power, but they are happy to see operating across borders a wide range of banks with which they would consider doing business – as they do now.

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