April 13, 2001

. Vreme News Digest Agency No 486

The Biggest Austrian Banking Group Announced the Establishment of a Branch in Yugoslavia

No More Keeping Money in the Pouches

by Mirjana Milosevic

‘We are bringing new technologies, offering good possibilities of employment and intending to prepare the ground for a number of foreign investors who have interest in the Yugoslav market’, says Peter Dubsky, director general of Raiffeisen Yugoslavia Bank, the latest in the line of twelve banks founded by this group in central and eastern Europe. The reasons for our investment were explained by Oliver Roegl, member of the bank’s management board, at a promoting conference in the Intercontinental Hotel, on Tuesday, April 10th: ‘We have been observing the Yugoslav market for a longer period. Political circumstances prevented us from stepping into some serious business, such as establishing a new bank here, but soon after the old regime was replaced in October, we came with the intention of creating Raiffeisen the first foreign bank in Yugoslavia. We place our trust in the new Yugoslav authorities and so far our expectations are fulfilled. The economic potential in Yugoslavia is enormous, it is the central point in the Balkans and I’m pretty sure that a number of other companies will soon realise that. We couldn’t wait any longer; we opted for the strategy of the parallel entry and exploration of the market. We have a leading position in all the countries where we appeared, having taken control of the major part of the market. It was the case with Hungary and Croatia. Of course, there is always a big risk, but it cannot be compared with the gains that we expect after the economic situation is improved.’

The Raiffeisen Zentralbank Osterreich is the first foreign bank that will open its junior-bank in Yugoslavia. On March 9th, the National Bank of Yugoslavia has issued the licence to this most renowned banking group, and the official opening of its branch can be expected by autumn this year

Raiffeisen Bank is the leading business and investment bank in the countries of eastern and central Europe and it has a long experience in dealing with economies in transition. The actual plan of the bank, as far as partnering with Yugoslavia is concerned, is to start with the whole spectre of banking facilities. Oliver Roegl hopes that, after many negotiations with potential clients, this bank will be well accepted in this region.

‘Yugoslav economy is composed of many corporations that are in need of good and reliable banks. In order to enliven the economy, it is necessary to institute a stable banking system.’

Raiffeisen Bank will simultaneously launch the business with citizens and with other companies, which was not the case in other transitional economies. The reason for it is the lack of competition and a poor state of affairs in local banks. ‘There is big vacuum in the banking system. The citizens ceased to trust the Yugoslav banking system. On the contrary, we are credible and have a reputation and name. We have never allowed any of our banks to undergo a collapse, nor have any of our clients ever remained broke because of us. We are hoping to regain the trust of the Yugoslav citizens and to set the standards, which will be adopted, by other local and foreign banks. I also hope that we will soon be in position to offer favourable credits to citizens for purchasing flats and cars’, says Roegl for VREME.

The Yugoslav judiciary system is in charge of regulating the banking business, but it still does not function flawlessly. Representatives of the Raiffeisen Bank are hoping that they will soon pass some new modern laws, which will facilitate and improve the quality of all banking transactions.

The employment of the local manpower is a business policy respected by all Raiffeisen banks. Raiffeisen Yugoslavia will have about 60 employees, the majority of which will be Yugoslav citizens. Mr. Roegl claims that he is content with the number of those interested to work in the bank. ‘Yugoslav citizens are generally well educated. We shall employ mainly those who already have the essential banking experience, but there will, of course, be opportunities for young and inexperienced people with university degrees.’

Raiffeisen Bank will offer a range of services to the Yugoslav economists and bankers, as well as facilitate all kinds of transactions with common people.