June was a month full of events and conferences. Standing out from the other was “The Regional Finance and Investment Conference for SouthEast Europe” organized by Euromoney Conferences on the 12th of June.
The reason for the huge interest generated by this conference is two folded. First, Euromoney is a very well respected events organizer with an immense history behind. Second, or better said, as a consequence, they are able to line up prestigious participants. This event was attended by top Governmental representatives – Mr. Victor Ponta, the Prime Minister of the Government of Romania and Mr. Liviu Voinea, Minister Delegate for Budget. The National Bank of Romania was represented by the Governor, Mr. Mugur Isarescu. The leading banks of Romania were also represented at this event (BCR, Raiffeisen Bank, Banca Transilvania and Bancpost), as well as other regional governmental and institutions representatives. Details on Euromoney Conferences web site.
Bancpost was present as a partner and through the voice of it’s Executive President & CEO, Mr. Anthony C. Hassiotis. Mr. Hassiotis participated in the panel IV, “Outlook for SEE Banks” where several topics were under debate:
- How healthy is the European banking industry?
- How does this affect the banks of SouthEast Europe?
- A European banking union: the implications
- What is the best way to tackle NPLs?
- How can a balance be struck between the interests of the banks and the consumer?
- Cross border versus local currency funding
- Basel III and capital adequacy. How will this affect capital structures for SEE banks?
- Bank deleveraging
- Where are the best business opportunities for banks operating in the region?
The panel moderator was Giada Vercelli, Content Director, Euromoney Conferences and the other panelists, besides Mr. Hassiotis from Bancpost were Steven van Groningen, President and Chief Executive Officer, Raiffeisen Bank Romania, Sergiu Manea, Executive Vice President of Corporates and Markets, BCR, Matthew Saal, Local Currency and Capital Markets Development team, EBRD and Omer Tetik, Chief Executive Officer, Banca Transilvania.
Below, an excerpt from the declarations of Mr. Hassiotis:
There is a myth that deleveraging is a result of banks not lending and instead taking money out of the system. I think that most definitely the banks want to and are actually, currently, lending and investing in the real economy.
The problem we are facing is that, at this point, there is a lack of confidence overall, which translates into a lack of demand for credit, either from the private or the commercial sector. There are not enough projects or demand for loans to give money for. If you also take a look at the steady growth of the overall deposit base, what that tells you is that there is liquidity in the pockets of individuals that trust the banking system and they give it to us for safe keeping. On the other hand, they also repay loans and they are not getting new ones. So I think what is missing right now is this vision, this belief that the outlook for the future is indeed better.
As far as the corporate customers are concerned, they must be educated to present credible, reliable audited financial statements to the banks if they really want to be financed, to the extent that they want to be financed. Having two sets of books is not the way to do business anymore. The less grey economy we have the better off all of us are.
Then you have the pricing, and this is where we, the bankers, are guilty as charged. Exactly because there are not enough projects to finance and enough loan demand, the pricing is thin. This means that we are also giving the wrong impression to the companies that the current pricing is sustainable over the long term. To me this is also dangerous, because you cannot base long term project planning on today’s pricing which inevitably is going to rise.
Before closing, I want to make one more statement: I think that the crime that has been committed against the banks is that depositors were allowed to lose money. Banking is based on trust, no more, no less. And what appeared to be a small insignificant action in a small island like Cyprus shook the very foundation of banking which is trust.
Regarding to the question as to when the crisis is going to be over, the answer is that it will be over when people and companies think and believe it is over.
The event was covered on Twitter, under #emcSEE hashtag:
