Poland’s Alior Bank has launched a new structure aimed at the bank’s private banking clients who can invest at least PLN30,000 (€7,500) to get exposure to the Stoxx Europe 600 Health Care index.

Medyczna Inwestycja is a two-year unit-linked life product that will pay between 60% and 80% of the rise of the underlying index, as a semi annual average.

The product is being sold via insurer STUnŻ Ergo Hestia, but investors are exposed to credit risk of Alior Bank as underlying deposit certificates are issued by Alior Bank which charges an investment fee of up to 1.6%.

Private banking director at Alior Bank, Marzena Pietrza, told SRP that the introduction of the new structure responds to market trends. “Medyczna Inwestycja is an interesting solution for investors who are looking for attractive opportunities to diversify their investment portfolio with assets in the form of European companies in the medical sector,” said Pietrza. “These companies are very positively evaluated by analysts and are increasingly popular among investors.”

PB clients
According to structured product manager at the bank Marcin Kobus, this is not the first structured investment solution offered to bank’s private banking clients. “In this segment we issue products depending on client demand,” he said.

“We have to ways of doing this: a client selects the product himself/herself and guarantees to cover the majority of the issue, and then we organise a club issue for private banking clients. Such offers usually have a short subscription period,” explained Kobus. “The second way is when the bank’s committee chooses the product that will be sold among private banking clients. [In this case] the subscription period is a little longer and is accompanied by a broader marketing campaign.”

Tailored investment proposition are launched several times a month and the most common underlying is exchange rates, said Kobus. Private banking products raise about PLN200K-PLN5m (€500K - €1.2m) and they are usually denominated in USD and EUR.

“Offers selected by the investment committee appear in the private banking segment once or twice every quarter and raise around five to ten million zlotys (€1.2m - €2.4m),” said Kobus. “Additionally, our private banking clients also have access to our retail offering which is launched once a month.”

PB in Poland
According to SRP data, the size of the private banking business in Poland in 2013 represented around 5% of the whole market in terms of volume and 12% in terms of issuance.

2013 - Poland

PB included

Retail only

PB only

Total Issues

392

344

48

Total Volumes (PLNm)

10,765

10,267

498


The most active providers on the private banking side of the Polish market in 2013 were Bank Millennium, Citi Handlowy and Bank Zachodni WBK. ING Bank Slaski and Raiffeisen Polbank also marketed several products apiece.

“Alior Bank’s private banking channels represent 10-15% of the total issuance by the babnk,” added Kobus.

Retail distribution
Alior Bank stepped into the structured product market in 2009 with products offered to retail clients in the form of certificate deposits. Its initial range comprised six products with an estimated value of PLN40m (€10m).

Since then the business has been gradually expanding and increased its monthly output, which reached ten retail products in 2013 raising PLN630m (€150m), a growth of 15 times over four years.

The highest-selling product by Alior Bank was Spółki Dywidendowe (Strategia 100), a fully protected tranche that sold PLN 92.5 (€22m). The 95% protected version of this product raised less than ten times the amount (PLN8.5m / €2m).

SRP Awards
Alior Bank was awarded at the last SRP European Awards Dinner, which was held on February 6 in London. The Polish bank was recognised as the Best in Product Performance, Poland and the second Best Distributor, Poland.

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