The FINANCIAL — “We do not plan to expand to Georgia,” Dr. Herbert Stepic, CEO of Raiffeisen International, “Bank of 2008”, told The FINANCIAL. “When entering into a market we always consider the political risk, the need for banking products and whether we are welcome. We have never expanded to a market where the authorities did not give us a clear signal that they are supportive regarding our market appearance.”
Raiffeisen Bank is establishing its subsidiary in Kazakhstan. “We decided this year to open a new bank in Kazakhstan. The application to establish a subsidiary bank in Kazakhstan was submitted in October 2008 and is currently being processed by the Kazakh banking supervision authorities. We do not have any plans at the moment to expand to other countries,” stated the CEO.
The Group operates one of the largest banking networks in CEE. 17 markets in Europe’s growth region are covered by subsidiary banks, leasing companies and a range of other financial service providers. Nearly 64,000 employees serve over 15 million customers in more than 3,150 business outlets. No other international bank in the region has a similarly extensive and closely-knit distribution network.
“In principle it is our goal to service both customer segments in those markets where we operate. In general terms this would depend on whether we decided for the foundation of a new bank or the acquisition of an existing bank. In case of a foundation one can mainly focus on corporate customers. To service retail customers you definitely need a branch network.”
Raiffeisen International Bank-Holding AG reported earning results for the three quarters of 2008. In the first nine months of the year, the Group achieved a consolidated profit of EUR 861 million which is an increase of 38 percent compared with the first nine months of 2007. Raiffeisen International targeted a consolidated profit of about EUR 350 million for the entire year 2008.
On 20-21 November of 2008, the third Awards Ceremony of “Autodealer of the Year” was held in Moscow, where Raiffeisen Bank won the nomination of “Best Bank of 2008 in Auto Credit”.
Responding to the recent events in automaker industries Raiffeisen International, “Bank of the Year” in Central and Eastern Europe (CEE) for 2008, is tightening its risk policy.
“Auto credits remain one of the main products that we offer to private customers. The current market environment has resulted in a risk policy that is even tighter than the one we had in place before,” Michael Palzer, Vice President and Head of Communications of Raiffeisen International, told The FINANCIAL.
“The post Soviet countries are in the process of catch-up. People want to buy a TV, a new kitchen, a new flat or a new car. So the potential is given in many areas, also in car loans,” said Mr. Michael Palzer.
“Due to the market environment we are currently reviewing our mid-term targets. The new targets will be announced at the publication of the full-year results o 2008 in March 2009,” added Herbert Stepic.
The Banker, the esteemed financial sector magazine published by the Financial Times Group, has awarded Raiffeisen Zentralbank; sterreich AG (RZB) and its subsidiary Raiffeisen International Bank-Holding AG jointly the title “Bank of the Year” in Central and Eastern Europe (CEE) for 2008.
Dr. Herbert Stepic explained to The FINANCIAL what stands behind the success of the Group. “The main reason for our success is that our group realized the potential of the emerging markets of Central and Eastern Europe at a very early stage. Raiffeisen has a tradition of more than 120 years in Austria and our brand name is the main asset besides the quality of our staff.”
“We are early movers and trend-setters. We started more than 20 years ago, before the fall of the Iron Curtain. At the beginning we focused on founding our own banks. Only in 2000 did we start acquisitions, but always managed to buy at reasonable prices.”
With its constantly expanding network in Central and Eastern Europe (CEE), Raiffeisen International Bank-Holding AG has been developing into one of the region’s leading banking groups. Starting already in 1986 by founding what is today Raiffeisen Bank, Hungary, Raiffeisen International has consistently entered growing markets and expanded its regional and local presence. Recent examples are the acquisitions of banks in Kosovo, Belarus, Albania and Ukraine in 2002 through 2005.
Good performance and successful acquisitions have secured Raiffeisen Zentralbank (RZB) this year’s award as best bank in Austria. In particular, the acquisition of Bank Aval increased the Austrian bank’s reach in the Ukraine market. In January 2006 Raiffeisen Bank of Austria acquired Boris Ivanishvili’s Moscow Impexbank. The final purchase price was USD 555 million. This investment in Russia added 500 new banking outlets to Raiffeisen’s strong presence in the region.
“The main rationale of acquiring Impexbank and merging it with our 1996 founded Raiffeisenbank, was the large branch network of the bank that made us safe some 5 years in developing our own branch network. As for the cost of the acquisition, it is in line with our philosophy of acquiring banks at reasonable prices.”
“In the meantime we have in total founded 10 banks and acquired another 10. When we tapped the markets of Central and Eastern Europe we serviced primarily companies. Since 1999 we rolled out a regional retail banking strategy. The number of our customers now amounts to almost 15 million.”
“Our main competitors differ from market to market, in some markets we compete with local banks in others with subsidiaries of Western groups. The largest Western players in the region apart from Raiffeisen are UniCredit and Intesa from Italy, Erste Bank from Austria, France’s Societe General and KBC from Belgium.”
ZAO Raiffeisenbank is the Russian subsidiary of Austria’s Raiffeisen International Bank-Holding AG on the Russian market. It is the largest foreign-owned bank in Russia, ranking 8th in terms of assets among top Russian banks based on 3Q 2008 results. According to Interfax-CEA, Raiffeisenbank ranked 4th in Russia in terms of private deposits and 6th in consumer lending in Russia based on 3Q 2008 results.
As of 30 September 2008, Raiffeisen International managed subsidiary banks, leasing companies and a number of other financial service providers in 17 markets of the region. Nearly 64,000 employees serve over 15 million customers in more than 3,150 business outlets. No other international bank in the region has a similarly extensive and closely-knit distribution network.
The bank is a fully consolidated subsidiary of Raiffeisen Zentralbank Österreich AG (RZB), which owns more than two-thirds of the common stock. The remainder is in free float, the shares are listed on the Vienna Stock Exchange. RZB is a leading corporate and investment bank in Austria and the central institution of the Austrian Raiffeisen Banking Group, the country’s largest banking group.
“Our performance in what has partly been a very difficult environment proves that our business model allows us to succeed even in the face of strong economic headwinds,” said Dr. Stepic.
Written By Levan Lomtadze
