The Polish unit of ING Groep NV will no longer provide brokerage services to institutional investors as the country’s stock market grapples with plummeting trading volumes and a dearth of share sales.
While ING Bank Slaski SA will continue offering investment banking and retail brokerage services, the financial industry “is facing challenges,” spokesman Piotr Utrata said on Friday, adding that it will eliminate about 20 analysts’ and stock traders’ jobs. The lender will stop providing its services for big investors by the end of August.
On top of ultra-low interest rates, Polish lenders are under increasing strain after the new government imposed a levy on their assets amid a debate to convert Swiss franc mortgages into zloty. Along with other local brokers, ING is locked in tight competition with foreign rivals and a rising tide of automated orders coming from abroad. Warsaw’s main equity gauge, the WIG20 Index, fell in the last three years, trailing the MSCI Emerging Markets Index.
Poland’s biggest brokerage just eight years ago, Slaski now ranks 14th in terms of trading volumes on the Warsaw Stock Exchange in the first six months of this year, according to the bourse’s data. This gradual decline accelerated four years ago, when the biggest Dutch financial-services company decided to reduce its London desk for emerging markets, which hindered Slaski’s ability to receive orders from foreign investors.
The allure of the Warsaw bourse has faded in recent years after a revamp of the nation’s pension funds axed money flows to its once-robust stock market and undermined investor confidence in Poland’s capital market. Then the ruling Law & Justice party, which swept to power last year, halted the sales of state stakes in major corporations that had helped draw foreign investment to the biggest stock exchange in central and eastern Europe. The value of initial public offerings fell by more than 50 percent in the past two years.