AIB subsidiary branching out

Being a banker is no easy matter in Poland, where between 20 and 40 per cent of the population do not have a bank account.

The most prominent example of this phenomenon is outgoing prime minister Jaroslaw Kaczynski who admitted recently that his salary was paid into the bank account of his elderly mother, with whom he lives, and that she gave him his money.

"That was quite a surprise for many people," laughs Mateusz Morawiecki (39), the president of the board of Bank Zachodni WBK (BZWBK), AIB's Polish subsidiary.

Number four in the market, BZWBK posted pre-tax profits last year of 745 million zloty (€201 million). "To be honest, though, we are more interested in capturing new customers from other banks."

The Polish bank already has plans to hunt new customers by heading west, with a co-operation with AIB branches in Ireland. The bank also has plans to head east, first by expanding its branch network into eastern Poland, then by pushing the Polish brand into Georgia.

Winning new banking customers at home in Poland is a difficult business: 94 per cent of the Poles with accounts say they are happy with their current relationship. Making things even tougher for BZWBK is the fallout of a recent market shake-up that saw Unicredito sell part of its Polish operation to GE Money.

A Catholic from a staunchly anti-communist family, Mr Morawiecki joined Bank Zachondi nine years ago as an adviser to the president of the management board, the position he now holds himself, and served on the board and then as chief executive.

AIB's interest in Poland began in 1995 when it took a shareholding in Poznan-based WBK, which it merged in 2001 with Bank Zachodni to create BZWBK. AIB now owns 70.5 per cent of the bank which holds a 17 per cent share of the Polish market. In the first half of 2007 it enjoyed a 36 per cent rise in pre-tax profits on last year to 779 million zloty (€210 million).

Mr Morawiecki has hit the ground running as president, with a plan to open 250 new branches in eastern Poland, adding to the bank's existing 380 branches in western areas, to become a nationwide player.

"We realise that there are islands of huge development in Poland where we are under-represented, Gdansk, Warsaw and Krakow," he says.

Krakow is an important and lucrative banking market where BZWBK has just 1.2 per cent of the market.

The big prize, however, is his hope to double the bank's share of the mortgage market, from 3 to 6 per cent.

The Polish operation has benefited from the mortgage expertise of AIB group, according to Mr Morawiecki, a fact recognised too by ratings agency Moody's. It recently upgraded its outlook for the Polish bank from "stable" to "positive", citing AIB's ownership, BZWBK's conservative risk profile and its steady expansion plans. A further upgrade will follow if the bank continues to improve efficiency and profitability.

Mr Morawiecki says the bank has plans to target financial products at new entrants to the Polish workforce.

For Poles who leave to work in Ireland, plans are afoot for a new co-operation that will allow a Pole to walk into an AIB branch and do business with BZWBK.

"Already our bank's customers can use AIB ATMs for free," he says.

"We are working on a more holistic proposition where our customers could buy our products with help of the AIB branch network."

The plan has yet to be cleared by the Irish financial regulator, but it is likely to be rolled out in the next 12 months.

At the same time, the Polish bank's regional expertise could come into its own for the Irish parent company soon, with plans to push further east under the BZWBK brand.

"We are interested in acquisitions in Georgia," says Mr Morawiecki, saying any deals would "make use of our franchise" and "utilise our infrastructure".

Mr Morawiecki is sanguine about the weekend election, particularly as the last two years of political upheavals have had little effect on the powerhouse economy.

"The economy is clearly quite immune to politics," he said. "It's a sign of maturity of the Polish economy."