The RBI was privatized
Johann Strobl: "We can only hope for the best"
How does Raiffeisen intend to benefit from the market shakeout?
On the one hand, we want to grow organically. We have enough equity. Mergers also mean that two banks will spend several years merging their businesses. For us, this weakness means that we can use this time to grow our business.
Are acquisitions in Eastern Europe also an issue for you?
If the price is right, we would also be ready to take over banks in countries where we are welcome.
Which countries are we talking about?
The attractive countries are the Czech Republic, Slovakia, Hungary and Serbia. One problem, however, is the high valuations; another problem is whether we as a foreign bank are welcome at all. This question arises, for example, in the case of Komercijalna banka, which is being privatized by Serbia.
How big are your chances of getting a chance in Serbia?
A transparent sales process by the Serbian government is needed. At the moment I cannot assess the chances that we will win - there are very different signals from Belgrade. It would be a big purchase. Because Komercijalna banka is number two in Serbia. RBI is currently in fifth place there.
How high are the political risks in Eastern Europe? In Romania, for example, at the end of last year the left-wing populist government introduced a “greed tax”, ie a special tax for banks.
In many Eastern European countries there are discussions about special taxes for the financial sector. In the case of Romania, we achieved that the pre-Christmas tax plan for the banks was significantly reduced. The link between a special tax and the Romanian interbank rate Robor has since been abandoned.
There is now a fixed value as the assessment basis for the special tax, with numerous exceptions. That relieves us. But to be clear: I don't think the banking tax is a good idea in principle. Taxing a bank that is available to the entire economy as a service provider is strange behavior on the part of a government, in my opinion.
How dangerous is populism for a bank in Eastern Europe?
The Hungarian Prime Minister Orbán was the first to attack the financial market for nationalist reasons. Today he is far from the only one. The risk is reduced if there is a sufficiently strong national banking segment.
Should the EU carry out rapid enlargement in the Balkans?
The sooner the better! The first states should be admitted as early as 2025. The economies of the countries of the Western Balkans would then experience a great boost. But there are unresolved issues, particularly the rule of law. The EU must enforce the rule of law with clear goals.
In Ukraine - an important market for Raiffeisen - there was a political change. What does this mean for RBI?
Actors have already been elected president in other countries. This is not an isolated case in Ukraine. The difference is that Ronald Reagan was at least politically experienced as governor of California. This is not the case with the future Ukrainian President Volodimir Zelensky. We do not know in which direction it will go financially. We can only hope for the best.
In neighboring Russia, the situation is more predictable. What are your expectations there?
Russia exceeded all forecasts in terms of economic growth in 2018. In 2019 the country will return to normal. The Russian economy is supported by the high oil price. Much depends on whether Russia's relationship with the USA and Europe will ease.
How does Raiffeisen fare in the worst case?
Our bank is well diversified in Russia with the core regions Moscow and Saint Petersburg. But we have a market share of only 1.5 percent. Because of our size, we are not really relevant for the large Russian companies, although many companies value us as a foreign bank.
Our bank is recognized by customers and banking supervisors. But it is economically irrelevant. That is why we do not play a political role in Russia.
Raiffeisen was recently confronted with money laundering allegations in connection with dubious money from Russia. How far are the investigations?
The investigations are still ongoing. We check very carefully whether there were or are customer relationships of suspects. We then take a very close look at the customer and their individual transactions. So far we haven't found anything new.
The new allegations are largely identical to the transactions published in the “Panama Papers” from 2016. At that time we had already carried out an extensive study of our entire offshore business.
The result at the time was satisfactory. That is why we are not too concerned at the moment. But money laundering is a sensitive issue. I assume that we will present the results of the investigation by the middle or end of June.
Fintechs are a great opportunity and challenge for banks. Why did Raiffeisen get involved in the subject so late?
We didn't get into fintech late, the markets have developed quite differently. We went through a transformation program to strengthen the equity ratio, which had priority in the past.
But now we are ready and at the right speed with the fintechs. The big developments are happening in our region in Russia. Apart from that, we haven't missed anything in our markets. We are watching the developments of fintechs in the UK, Germany and France who really want to compete with banks. But for that you need large markets.
However, you only started your own fintech partnership program in Central and Eastern Europe in 2017.
And it is now one of the leading of its kind. We are now starting the third edition after the first two rounds went very well. The majority of fintechs do not see themselves as opponents of the banks.
The market noticed that we take cooperation with selected fintechs very seriously. We don't feel threatened by fintechs. Whether one of our startups will one day become the Superbank is in the stars.
Mr. Strobl, thank you very much for the interview.
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