|
For most of the eight years since the financial crisis, the story of banking sector M&A in emerging Europe was relatively simple. Intense appetite for assets in Poland, the region’s largest economy and the only one to avoid recession after 2008, was matched by an almost total lack of interest in markets further south as bad debts ballooned and valuations slumped.
Recently, however, the sector has started to show signs of life beyond Poland. Some of the worst-affected countries – including Romania, Slovenia and Croatia – have seen successful transactions over the past year. Traditional regional players have regained their appetite for expansion, while new buyers have emerged from a range of sectors and from as far afield as the US and China.
This is partly due to the improvement in the overall operating environment. Nearly all the economies of central and south-eastern Europe are now growing at between 2% and 4% a year, well ahead of their western counterparts, and banking dynamics have also improved. Non-performing loan ratios are stabilizing or even inching down, credit demand is picking up and valuations are recovering.
At the same time, several of the key regional players have overcome the immediate challenges posed by the need to comply with Basel III standards.
