Banking in Serbia Alexander Picker CEO UniCredit Bank Serbia May 2007.
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Transcript of Banking in Serbia Alexander Picker CEO UniCredit Bank Serbia May 2007.
Banking in SerbiaAlexander Picker
CEOUniCredit Bank Serbia
May 2007
Alexander Picker 2
May 2007
Contents: Questions to be answered
Who is talking to you?
What is the essence of banking? What does a bank sell?
What are the trends in the world?
Where is Serbia?
Alexander Picker 3
May 2007
Who is talking to you ?Section 1
Alexander Picker 4
May 2007
MAIN STRUCTURAL FIGURES
UniCredit is a Truly European Bank …
Employees over 134,000
Customers: over 35 mn
Branches: over 7,000
Deposits and debt securities in issue: € 475 bn
Loans: € 430 bn
Banking operations in 20 countries
Global player in Asset Management: € 236 bn AuM
14th bank world-wide in terms of Market Capitalization
Alexander Picker 5
May 2007
Countries where the Group operates via its own branches, representative offices, small banking subsidiaries, or investment centers (Pioneer)
Countries where the Group operates via local banks controlled or in which it has a significant equity interest
… with an extensive geographical presence in Europe …European branch network and banking subsidiaries
Amsterdam
Athens
Bern
Brussels
Dublin
Oslo
Geneva
London
Luxembourg
Madrid
Monaco
Oslo
Paris
San Marino
Skopje
Zurich
CZ: HVB Bank Czech Republic Živnostenská BankaHU: HVB Bank Hungary
SLO: BA-CA Ljubljana
SK: HVB Bank Slovakia UniBanka
Baltics: HVB Bank
BIH: HVB Central Profit Banka UniCredit Zagrebačka banka Nova Banjalučka Banka
CRO: Zagrebačka banka
BG: Bulbank HVB Bank Biochim Hebros Bank
SE: HVB Bank Serbia
AZ: Koçbank Azerbaijan
TK: Yapi Kredi
RO: HVB Tiriac Bank UniCredit Romania
RU: International Moscow Bank
PL: Bank BPH Bank Pekao
UA: HVB Bank Ukraine UniCredit Bank
A: Bank Austria Creditanstalt D: HypoVereinsbank I: UniCredit
Alexander Picker 6
May 2007
Countries where the Group operates via its own branches, representative offices, small banking subsidiaries, or investment centers (Pioneer)
Countries where the Group operates via local banks controlled or in which it has a significant equity interest
...and worldwide.
Mumbai
New York
Rio de Janeiro
São Paulo
Seoul
Singapore
Shanghai
Sydney
Teheran
Tel Aviv
Tokyo
Abu Dhabi
Bahrain
Beijing
Boston
Buenos Aires
Cairo
Guangzhou
Hanoi
Hong Kong
Johannesburg
Mexico City
Miami
Alexander Picker 7
May 2007
= Representative OfficeR
PL SK BG RO HU CZ YU SI HR BA MK RU UA LV LT EE TR AZ
Societe Generale 10 + 1R
9
5
5
5
17 + 1RR13 + 1RR
8 + 2RRR5 + 6RR R R R R5 + 4RR R R R
3 + 3RR R R
UniCredit is the largest group with the most extensive coverage throughout the region…
= Subsidiary
R
Alexander Picker 8
May 2007
... and is also present in Serbia.
32 cities
46 branches
Assets: € 1.256 m.
Market share: 6-7%
Corporate clients: 11.000 srednja preduzeća 1.056 velika i međunarodna 595 biznis 9.303
Private clients: 105.000
Employees: 660
Alexander Picker 9
May 2007
What is banking ?Section 2
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May 2007
The origin of banking
Italy in medieval times
banca & trade
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May 2007
What does a bank sell ?
Money?
Services?
Safety?
?
Alexander Picker 12
May 2007
What are the trends in the world ?Section 3
Alexander Picker 13
May 2007
Globalisation: Trend global growth is higher, as are commodity prices
0
50
100
150
200
250
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
2.00
2.50
3.00
3.50
4.00
4.50
5.00
5.50
IMF world commodity price index (2000=100), left axis
5-year moving average, global GDP growth, right axis
Alexander Picker 14
May 2007
Higher commodity prices imply bigger demand for financial market assets by EM
-200
-100
0
100
200
300
400
500
600
700
800
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
150
170
190
210
230
250
270
290
310
330
350LatamMiddle EastDeveloping AsiaCISCEE ex RussiaCRB index (RHS)
Current account balances, USD bn, lhs
Alexander Picker 15
May 2007
Emerging Markets are integrating into the world economy
10
15
20
25
30
35
40
45
50
55
60
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
US
Advanced economies, excluding US
Developing economies (World minus advancedeconomies)
% of World GDP, market prices
Alexander Picker 16
May 2007
Big picture conclusions
Global growth will slow in 2007, but will remain strong from a historical perspective
Commodity prices are hence likely to remain above long-term averages
Advanced economies will continue to gradually shrink in terms of importance
A “soft” US growth landing and low inflation will prove supportive for risk taking, but at current pricing levels the evolution of inflation expectations should be watched closely
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May 2007
Other key words
Private Equity – Blackstone, Kohlberg Kravis Roberts, Permira
Banking consolidation: Barclays and ABN Amro – 67 bn merger
Hedge Funds – regulatory risk
Globalisation has already arrived ….
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May 2007
Serbia SWOT AnalysisSection 4
Alexander Picker 19
May 2007
Strengths: Structural reform is catching up
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
SerbiaCzech Republic
EBRD transition indicator (average)
Alexander Picker 20
May 2007
Strengths: Growth Outlook
Robust growth in Serbia in 2007
– Credit growth remains strong despite tighter NBS policy
– Increases in public sector salaries will support consumption
– National Investment Programme activity continues unabated
– Monetary policy slightly looser this year (lower 2-week repo rate)
Current political situation is the major risk
Expected economic growth of 5% this year
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May 2007
Weaknesses: Industrial Production and …
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May 2007
… Unemployment
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
labo
ur fo
rce
(mil)
0%
5%
10%
15%
20%
25%
30%
35%
unem
ploy
men
t rat
e
unemployed
employed
unemployment rate
Alexander Picker 23
May 2007
0%
25%
50%
75%
100%
125%
150%
175%
200%
225%
Eurozo
ne
Polan
d
Hungar
y
Czech
Rep.
Slova
kia
Slove
nia
Croat
ia
Roman
ia
Bulga
ria
Serbia
Bosnia
-H.
Russia
Turkey
Eston
ia
Latvi
a
Lith
uania
Ukraine
CEE-16
Opportunities e.g. for banks: Intermediation but number of banks
Potential for
further increases
Total assets as percentage of GDP
Source: UniCredit New Europe Research Network
Alexander Picker 24
May 2007
Threats: e.g. Inflation
Core inflation came down markedly in 2H 2006
Move from a crawling peg exchange rate regime to a “hard” dinar policy has helped lower inflation
This has allowed the National Bank of Serbia to cut interest rates 500 bps since September 2006.
Increases in electricity prices and other administered prices will increase the headline inflation rate
Medium-term the 15% average increase in public sector salaries may generate inflationary pressures
National Investment Programme activity also presents an upside risk medium-term to the inflation outlook
Lower oil prices and stronger dinar are the main reasons we see inflation stable this year at an average 7% and at 8% in December 2007 (partly due to base effects).
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
Dec-0
2
Mar
-03
Jun-
03
Sep-0
3
Dec-0
3
Mar
-04
Jun-
04
Sep-0
4
Dec-0
4
Mar
-05
Jun-
05
Sep-0
5
Dec-0
5
Mar
-06
Jun-
06
Sep-0
6
Dec-0
6
CPI y-o-y Core CPI y-o-y
12.00
14.00
16.00
18.00
20.00
22.00
24.00
26.00
03-F
eb-0
5
03-A
pr-0
5
03-J
un-0
5
03-A
ug-0
5
03-O
ct-0
5
03-D
ec-0
5
03-F
eb-0
6
03-A
pr-0
6
03-J
un-0
6
03-A
ug-0
6
03-O
ct-0
6
03-D
ec-0
6
7 Day 14-Day 28-Day 60-Day 182-Day
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May 2007
Threats: The currency market’s volatility
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May 2007
Conclusions
Banking is a complex service, which will be needed still for some time
Following global trends is essential today as the effects are already here
Serbia is generally doing well on economic development
Banking sector in Serbia remains interesting and competitive
If you cannot convince them – confuse them
Thanks for the attention!Alexander Picker
May 2007