Hoping to cash in on Poland's fast growing economy, BankAmerica Corp. and Citibank have announced expansion plans regarding Warsaw.
BankAmerica will open a representative office to assist major U.S. companies doing business in Poland, and to develop relationships with correspondent banks and Polish companies. The bank also said it plans to use its new Warsaw office to provide access to international financial products and to develop venture capital investments in Poland.
Citicorp, which already has a branch in Warsaw, said it plans to extend its existing corporate banking activities to include consumer banking operations.
"Why Poland?" asked BankAmerica's Shahzad Shahbaz. "Because it's one of the largest countries in central Europe, it's done very well economically, we see attractive growth opportunities there, there's lots of foreign investment, and many U.S. companies are either there or will soon be there," said Mr. Shahbaz, a senior vice president at the London branch who heads the bank's central and eastern Europe region.
"There are quite a lot of banking opportunities not only with foreign institutions but with some of the big corporate and financial institutions in Poland," he added.
The bank has named vice president Daniel A. Wood to manage the unit when it opens in June. Mr. Wood represented the company in negotiations on the restructuring of Poland's $10 billion foreign bank debt. He also played a leading role on the committee of banks which concluded a Brady bond package for restructuring Poland's sovereign debt in 1994.
Citi's consumer banking operations will start in the first quarter of next year, making Poland the second country in Eastern Europe, after Hungary, in which the bank has consumer operations.
Analysts estimated that Poland now has the fastest-growing economy in the region, making it an attractive target for foreign banks and foreign investors.
"Basically, Poland is quite a surprising story," remarked Stan Rudcenko, a country analyst for Bankers Trust International PLC in London. "Anyone who watched Poland in the 1980s would find it difficult to imagine what the country has achieved."
Mr. Rudcenko said Poland has "sustainable growth, is reducing inflation, and has got its budget deficit well under control."
BankAmerica's arrival in Warsaw will make it the fourth U.S. bank to establish a presence in Poland, after Bankers Trust New York Corp., Citibank, and Chase Manhattan Corp.
Several large foreign banks, including Holland's ING Group, France's Societe Generale, Austria's Creditanstalt and Germany's Deutsche Bank, have also been developing Polish operations.
Mr. Shahbaz said that although BankAmerica may move in the future to convert its representative office in Warsaw to a branch, no target date has yet been set. "It would be logical," he said. "Our view is that we will be doing more in Poland."