Information on banking supervision, deposit insurance programs, deposit interest rates, central banking, and monetary policy throughout Eastern Europe, including Central Europe, all of Turkey, and all of the Caucasus region.
On 29-30 August
2013 a number of Russian banking groups issued consolidated IFRS financial statements
for the first half of 2013. The
consolidated results published for 1H 2013 are given below. (N.B.: As of 30 June 2013 official exchange rates were EUR 1 = RUB 42.718 and
USD 1 = RUB 32.709.)
Alfa-Bank (ОАО «АЛЬФА-БАНК»), Russia’s 7th largest
commercial bank by assets as of 30 June, reported for the first half of 2013 a
consolidated net profit of RUB 18,913,956,000 (€ 442.8 mln, USD 578.2
mln), down 15.3% from the net profit of RUB 22,317,142,000 achieved in the
year-earlier period.
Gazprombank («Газпромбанк» (ОАО)), Russia’s 3rd
largest commercial bank by assets as of 30 June, reported for the first half of
2013 a consolidated net profit of RUB 11,473,000,000, up 24.4% from the
net profit of RUB 9,221,000,000 achieved in the year-earlier period.
Rosbank (АКБ «РОСБАНК» (ОАО)), Russia’s 10th largest
commercial bank by assets as of 30 June, reported for the first half of 2013 a
consolidated net profit of RUB 4,821,000,000, down 30.2% from the net profit
of RUB 6,903,000,000 achieved in the year-earlier period.
Promsvyazbank (ОАО «Промсвязьбанк»), Russia’s 9th
largest commercial bank by assets as of 30 June, reported for the first half of
2013 a consolidated net profit of RUB 4,465,055,000, up 17.9% from the
net profit of RUB 3,769,375,000 achieved in the year-earlier period.
Investbank (АКБ «Инвестбанк» (ОАО)), Russia’s 78th largest
commercial bank by assets as of 30 June, reported for the first half of 2013 a consolidated
net profit of RUB 37,086,000, down 94.5% from the net profit of RUB 672,078,000
achieved in the year-earlier period.
MDM Bank (ОАО «МДМ Банк»), Russia’s 21st largest
commercial bank by assets as of 30 June, reported for the first half of 2013 a
consolidated net loss of RUB 177,000,000, an improvement from the net loss of
RUB 634,000,000 registered in the year-earlier period.
Orient Express Bank (ОАО «Восточный экспресс банк»), Russia’s 30th
largest commercial bank by assets as of 30 June, reported for the first half of
2013 a consolidated net loss of RUB 364,536,000, compared to a net profit of RUB 2,829,838,000
achieved in the year-earlier period.
Russian Standard Bank (ЗАО «Банк Русский Стандарт»), Russia’s 18th
largest commercial bank by assets as of 30 June, reported for the first half of
2013 a consolidated net loss of RUB 643,000,000, compared to a net profit of RUB 2,535,000,000
achieved in the year-earlier period.
Bank Petrocommerce (ОАО КБ «Петрокоммерц»), Russia’s 27th
largest commercial bank by assets as of 30 June, reported for the first half of
2013 a consolidated net loss of RUB 1,581,801,000, compared to a net profit of RUB 706,060,000
achieved in the year-earlier period.
Totaling the
figures above, it is evident that the combined net consolidated profit in 1H 2013
for the nine banks listed above was RUB 36,943,760,000, down 23.5% from the
figure of RUB 48,319,493,000 for these same banks a year earlier, in 1H 2012.
On 26 August 2013
the press office of Transnistria’s central bank, the Trans-Dniester Republican
Bank (Приднестровский Республиканский Банк - ПРБ), published photographs
of central bank staff members cleaning up leaves, twigs, and rubbish in the
park adjacent to the bank and in another park in central Tiraspol during a subbotnik
(субботник) held on 23 August.
On 7 August 2013
the Polish financial website Parkiet reported that Bank Pekao (Bank
Polska Kasa Opieki SA), a Polish subsidiary of Italy’s UniCredit S.p.A., is
interested in buying BGŻ (Bank Gospodarki Żywnościowej SA), a Polish
subsidiary of the Rabobank Group of Utrecht, Netherlands, a leading bank in the
food and agricultural sector worldwide.
Parkiet reported that the
president of Bank Pekao, Luigi Lovaglio, had obtained authorization from
UniCredit to submit a bid to Rabobank for the purchase of BGŻ. The report estimated the value of the deal at
PLN 7-8 bln (€ 1.7-1.9 bln), but stated that the Italians had deliberately
submitted a bid that was low. (At the
time of writing EUR 1 = PLN 4.1994 and USD 1 = 3.1643.)
Earlier, on 20 December 2012 Rabobank had indicated that
by mid-2016 it intended to reduce its holdings in BGŻ. Specifically, it announced that having
recently succeeded in raising its stake in BGŻ from 60% to more than 98%, its
intention was to merge the bank with Rabobank’s preexisting wholly-owned Polish
subsidiary, Rabobank Polska S.A., with Rabobank Polska being absorbed by BGŻ “before
the end of 2013 and no later than mid 2014”.
After that merger, Rabobank intended to reduce its holdings of the
resulting bank to 75% by increasing the free float of BGŻ shares on the Warsaw
Stock Exchange to at least 25% by no later than mid-2016.
On 12 May 2013 the newssite Rzeczpospolita
reported that Rabobank was looking to “sell” BGŻ – apparently its entire
interest in the bank – and was canvassing among the larger Polish banks for
potential interest.
On 28 June 2013Parkiet reported that Rabobank
was evaluating its options for selling the bank, and that four Polish banks
were interested in acquiring BGŻ: ING Bank Śląski S.A., BNP Paribas Bank
Polska S.A., Credit Agicole Bank Polska S.A., and Getin Noble Bank S.A.
The 7 August report
by Parkiet therefore adds a fifth bank to the list of Polish banks
reportedly interested in acquiring BGŻ from its Dutch parent.
Background data – BGŻ
On 14 August 2013 the management
of BGŻ published audited, consolidated financial statements
for 1H 2013. As of 30 June 2013 the key
data consolidated data* were as follows (EUR 1 = PLN 4.3292):
Total assets: PLN 36,702.0 mln
(€ 8.478 bln)
Total loans: PLN 25,968.8 mln (€
5.999 bln)
Total deposits: PLN 26,677.9
mln (€ 6.162 bln)
Ratio of impaired loans to
total loans: 7.93%
Coverage ratio for impaired
loans: 49.58%
Share capital: PLN 51.1 mln (€
11.8 mln)
Number of branches: 402
Number of ATMs: 425
Number of employees: 5,710
*Besides the bank itself, the consolidated data include a 100%-owned
real-estate subsidiary (Bankowy Fundusz Nieruchomościowy Actus Sp. z o.o.) and
a 49%-owned leasing subsidiary (BGŻ Leasing Sp. z o.o.).
At end-2012 BGŻ ranked as the 10th largest commercial bank in
Poland by assets, with
total assets of PLN 37.25 bln (€ 9.11 bln)
At the time of writing the market capitalization of the bank is
calculated at PLN 3.293 bln (€ 772 mln) and its book value at PLN 3.475 bln (€ 827
mln).
Quarterly financial
results for Bank Gospodarki Żywnościowej (BGŻ),
2010-2013 (in PLN)
Quarter
Net interest income
for quarter
Net fee and commission income
for quarter
Net profit/loss
for quarter
1Q 2010
127,199,000
62,919,000
9,677,000
2Q 2010
146,015,000
68,820,000
13,618,000
3Q 2010
159,330,000
70,345,000
23,009,000
4Q 2010
171,774,000
69,443,000
66,037,000
1Q 2011
171,140,000
64,061,000
33,829,000
2Q 2011
198,639,000
68,191,000
26,453,000
3Q 2011
228,440,0oo
69,251,000
40,600,000
4Q 2011
235,792,000
68,394,000
27,215,000
1Q 2012
244,805,000
70,609,000
40,479,000
2Q 2012
257,456,000
77,573,000
-1,023,000
3Q 2012
262,571,000
77,308,000
38,202,000
4Q 2012
256,535,000
70,687,000
52,391,000
1Q 2013
239,035,000
69,329,000
29,544,000
2Q 2013
242,537,000
60,771,000
52,988,000
As of 28 June 2013, BGŻ was owned 98.50% by the Rabobank
Group: 8.41% by Rabobank Nederland (Coöperatieve Centrale
Raiffeisen-Boerenleenbank B.A.) and 90.09% by its wholly owned subsidiary
Rabobank International Holding B.V.
Rabobank originally acquired a 35.3% interest in BGŻ in late 2004 for
approximately € 150 mln in coordination with an acquisition of a 15% interest
in BGŻ by the European Bank for Reconstruction and Development (EBRD). Rabobank raised its interest to 37% in 2006, to
46.05% in 2007, and to 59.35% in April 2008 through the acquisition of the
12.87% interest still owned at that time by EBRD. In mid-2012 the Dutch bank carried out a tender offer
for outstanding shares of BGŻ, so that at end-2012 the Rabobank Group’s
shareholdings in BGŻ had reached 98.26%.
Background data –
Bank Pekao
On 6 August 2013 the management
of Bank
Pekao published audited, condensed consolidated
financial statements for the Bank Pekao Group for 1H 2013. As of 30 June 2013 the key data consolidated
data* were as follows (EUR 1 = PLN 4.3292):
Total assets: PLN 150,784.6 mln
(€ 34.830 bln)
Total loans: PLN 97,043.6 mln
(€ 22.416 bln)
Total deposits: PLN 108,964.4
mln (€ 25.170 bln)
Ratio of impaired receivables
to total receivables: 7.5%
Share capital: PLN 262.5 mln (€
60.63 mln)
Number of outlets (Bank Pekao +
PJSC UniCredit Bank in Ukraine): 1,040
Number of ATMs (Bank Pekao +
PJSC UniCredit Bank in Ukraine): 1,907
Number of employees: 19,515
*Besides the bank itself, the consolidated data include 18 subsidiaries
consolidated under the full method (podmioty konsolidowane metodą pełną)
and 5 consolidated under the equity method (podmioty wyceniane metodą praw
własności).
At end-2012 Bank Pekao ranked as the 2nd largest commercial
bank in Polish assets, with total assets of PLN 151.0 bln (€ 36.9 bln), well
behind the front runner, PKO Bank Polski, which had total assets of PLN 193.5
bln.
In earlier news, on
16 July 2013 Bank Pekao sold a
100% stake in its principal subsidiary, the Ukrainian commercial bank PJSC
UniCredit Bank (ПАТ «УніКредит Банк»), to the parent bank in Italy, UniCredit
S.p.A. The price for the sale was USD
166.35 mln “plus the amount, after certification by external auditor, of
cumulative consolidated net profit of the period from October 1, 2010 to July 16, 2013.” The CEO of PJSC UniCredit Bank in Kiev, Federico Russo,
stated in a press release that by yearend UniCredit plans to merge PJSC
UniCredit with another UniCredit subsidiary in Ukraine, the struggling
commercial bank Ukrotsbank (ПАТ «Укрсоцбанк»).
Earlier still, on
31 January the Italian parent bank, UniCredit S.p.A. of Rome, sold on the
Warsaw Stock Exchange 23,936,267 of the 155,433,755 shares that it held in Bank
Pekao, reducing UniCredit’s stake in the bank from 59.22% to 50.10%. As of 30
June 2013, the second-largest shareholder in Bank Pekao was
Aberdeen Asset Management PLC of Aberdeen, Scotland, which held a
5.03% stake in the bank. (As of 31 July
2013, Aberdeen Asset Management also owned shares in Akbank (Turkey), Garanti
Bank (Turkey), Bank of Philippine Islands (Philippines), Siam Commercial Bank
(Thailand), Public Bank (Malaysia), ICICI Bank (India), Banco Santander-Chile
(Chile), and Banco Bradesco (Brazil).)
In other news, on 5
August 2013 the National Bank of Poland (Narodowy Bank Polski – NBP)
published its latest quarterly opinion survey of banks’ senior loan officers. The NBP describes the overlying methodology
as follows: “The survey is addressed to the chairpersons of banks’ credit
committees. Banks’ responses may not take account of the opinions of banks’
divisions other than the credit divisions. The survey was conducted at the turn
of June and July 2013 among 27 banks with a total share of 81% in claims on
enterprises and households in the banking sector’s portfolio.”
The NBP summarizes
the most significant results of this latest survey as follows:
Summary of the survey results
Corporate loans
·Lending policy: a slight tightening of lending standards for
long-term loans; higher collateral requirements and an increase in spreads on
riskier loans; the extension of maximum loan maturity and lowering of non-interest
loan costs.
·Demand for loans: a slight rise in demand for short-term
loans to large enterprises.
·Expectations for the third quarter of 2013: no change in
lending policy; a slight increase in demand for loans to large enterprises.
Housing loans
·Lending policy: a slight easing of lending standards; an
increase in spreads.
·Demand for loans: a rise in loan demand.
·Expectations for the third quarter of 2013: a slight easing
of lending policy and a slight rise in loan demand.
Consumer loans
·Lending policy: a significant easing of lending standards;
an increase in maximum size of loan, a decrease in spreads, extending of
maximum loan maturity.
·Demand for loans: a significant increase in loan demand.
·Expectations for the third quarter of 2013: a significant
easing of lending policy and growth in loan demand.
The survey responding banks eased,
for the first time in four quarters, some of their lending terms in the segment
of corporate loans. In their opinion, this change was driven, inter alia, by
the activation of the government programme of De Minimis portfolio guarantee facility. At the same time, there was a
decline in the percentage of the banks that identified elevated risk associated
with future developments in the economy and industry-specific risk. Changes in
credit standards and lower financing needs for investment had an adverse impact
on loan demand. The banks considered payment backlogs and extended payment
periods as loan demand-driving factors.
For another quarter in succession,
the banks reported a rise in spreads on housing loans. Despite the move, the
demand for housing loans rose, which was attributed by the banks to a reduction
in the availability of this type of credit at other banks and to active selling
and marketing practices.
The banks substantially eased their
lending policies in the segment of consumer loans, which was primarily related
to the implementation of an amended Recommendation T. According to the banks,
an easing of standards and terms on consumer loans helped to increase demand for
this type of funding.
Earlier, in mid-July
2013 the NBP published its Working Paper No. 155: “Controlled
dismantlement of the Eurozone: A proposal for a New European Monetary System and
a new role for the European Central Bank”, by Stefan Kawalec and Ernest
Pytlarczyk. In contrast to the usual
fare offered by central banks, written by staff research economists, this paper
was penned by two people in the private sector: “Stefan Kawalec is President of
Capital Strategy Sp. z o. o. (a strategy consulting company). He is a former
vice-minister of finance in Poland (skawalec@capitalstrategy.pl).
Ernest Pytlarczyk is Chief Economist of BRE Bank S.A. (A Commerzbank subsidiary
and the fourth largest commercial bank in Poland) (ernest.pytlarczy@brebank.pl).”
The authors
summarize the situation of the eurozone as follows:
Greece, Portugal, Spain, and Italy are trapped in
recession and cannot restore their competitiveness by devaluating their
currencies. On the other hand, the northern Eurozone countries have to
participate in endless bail-outs and have been forced to disregard their values
of prudent financial policies. This situation has created a vicious circle of
resentment and populism in the southern countries and a revival of
nationalistic tendencies in the northern countries, which may ultimately tear Europe apart.
To the above description
they append the following in a footnote:
Sinn
(2013) gave the following summary of the current Eurozone plight: “Crunch
time is fast approaching. Cyprus is almost out of the euro, its banks’ collapse
having been delayed by the European Central Bank’s provision of Emergency
Liquidity Assistance, while euroskeptic parties led by Beppe Grillo and Silvio
Berlusconi garnered a combined total of 55% of the popular vote in the latest
Italian general election. Moreover, the Greeks and Spaniards are unlikely to be
able to bear the strain of economic austerity much longer, with youth
unemployment inching toward 60%. The independence movement in Catalonia has gathered
so much momentum that a leading Spanish general has vowed to send troops into
Barcelona should the province hold a referendum on secession. France, too, has
competitiveness problems, and is unable to meet its commitments under the
European Union’s Fiscal Compact. Portugal needs a new rescue program, and Slovenia
could soon be asking for a rescue as well.”
Beylin
(2013) advises that in crisis-ridden Portugal, 87% people are dissatisfied with
the democratic regime, and nearly half of the population positively assess the
dictatorship which was overthrown in 1970s (according to an opinion poll in
late 2012). “Across Europe, nostalgia for a strong order and powerful leaders
proliferates, while the memory of misfortunes caused by dictatorships pales,” he
writes.
The abstract for
the paper is reproduced below verbatim:
ABSTRACT
In Kawalec and Pytlarczyk (2013), we argue that the
single European currency constitutes a serious threat to the European Union and
the Single European Market, and we propose a controlled dismantlement of the
Eurozone. In this paper, we undertake a deeper analysis of the measures which
would minimize the risks throughout the process of the Eurozone dismantlement
and contribute to rebuilding confidence in the future of Europe.
·The dismantlement should be
the result of a consensual decision to replace the euro with an alternative
system of currency coordination.
·The dismantlement should
start with the exit of the most competitive countries. In the meantime, the
euro should remain the common currency of less competitive countries.
·The European Central Bank
(ECB) should be preserved as the central bank for all 17 Eurozone member
countries, even after some of those countries have replaced the euro with new
currencies. In this capacity, the ECB should be in charge of designing,
preparing, and implementing the segmentation of the Eurozone as well as
managing the new currency coordination system – European Monetary System 2.
·The forthcoming EU – USA free
trade agreement would build new momentum for economic growth and contribute to
restoring confidence in the future of Europe.
As of today, neither the member states of the Eurozone
nor European institutions such as the European Commission or the ECB have been
able to come up with a game-changing proposal such as the Eurozone
dismantlement. However, this may change as a result of adverse economic and
political developments. One of the potential triggers could be the situation in
France.
The paper is
available only in English, but the same content was covered by the two authors in
a seminar held at the NBP on 28 June 2013, “Kontrolowana
dekompozycja strefy euro. Propozycja nowego Europejskiego Systemu Walutowego i
nowej roli dla Europejskiego Banku Centralnego”, the slides for which are
available at the website of the NBP.
