Transcript Slide 1

SERBIA, IT’S TIME TO INVEST!
Christoph Pircher
Head of Corporate Relationship
Management Department II
Raiffeisen banka a.d. Begrade,
Serbia
1. SERBIA AT A GLANCE
ABOUT SERBIA
Total number of inhabitants (last official census
taken in 2002)
• Serbia - 7.498.001
• Belgrade - 1.576.124
• Individual income (2006 statistics):
• Serbia – gross 387 EUR, net 265 EUR
• Belgrade – gross 487 EUR, net 337 EUR
• Unemployment rate in Belgrade (2006): 18.0%
• Unemployment rate in Serbia (2006): 28%
*Source: www.siepa.sr.gov.yu
MARKET ACCESS
Serbia is in the center of
CEFTA – duty free access to
30 million people market
Duty free exports to the EU
FTA with Russian Federation
- market of 150 mil. people.
Limited number of
exceptions: complete
vehicles, confectionery,
some alcoholic beverages
Customs operations have
been improved by electronic
database, electronic
declarations, and imports &
exports time drastically
shortened
Source: SIEPA
COMPETITIVE LABOR COST
2006 Average Gross Salary: 387 EUR
2006 Average Net Salary: 265 EUR
Source: SIEPA
PRIVATIZATION
First phase
Privatization of cement factories which took place in 2001 onwards:
•
Holcim bought Fabrika Cementa Novi Popovac
•
Titan bougth Fabrika Cementa Kosjeric
•
Lafarge bought Fabrika Cementa Beocin
Second phase
Privatization of breweries and tobacco industry, major deals:
•
Philip Morris (Altria) bought DIN
•
BAT bought DIV
•
Carlsberg, INBEV and Efes bought major breweries
MACROECONOMIC DATA
FOREIGN DIRECT INVESTMENTS (in Mill. Of US $)
Foreign direct investment (net)
4,264.38
4,500.00
4,000.00
3,500.00
3,000.00
2,195.30
2,500.00
2,000.00
1,500.00
1,550.00
966.00
1,000.00
500.00
0.00
2004
2005
2004
2006
2005
2006
2007
2007
MAJOR FOREIGN INVESTORS
2. BANKING SECTOR IN
SERBIA
BANKING AND ECONOMY
BANKS ASSETS - Share in GDP
Total Banks Assets as %of Serbian GDP
140%
125%
122%
120%
100%
81%
80%
60%
39%
40%
32%
38%
43%
20%
0%
1999
2000
2001
2002
2003
2004
2005
CONCLUSION:
Due to the closure of large banks and restructuring process undergoing in state-owned banks in
Serbia the banks asstets‘ participation in Serbian GDP has declined. Nevertheless, result of
new entrants into Serbian banking sector, this ratio is expected to increase.
BANKING AND ECONOMY
TOTAL CREDITS - Share in GDP
Total Credits as % Serbian GDP
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
40%
32%
27%
21%
18%
23%
16%
1999
2000
2001
2002
2003
2004
2005
CONCLUSION:
Evident decrease of this indicator is a result of assets restructuring of state-owned banks (i.e.
Write-offs of bad loans). Following the resructuring of banking sector and presence of foreign
banks, participation of total credits in GDP has begun to increase
BANKING AND ECONOMY
RETAIL LOANS - Share in GDP
Retail Loans as % of Serbian GDP
8%
7%
7%
6%
5%
4%
3%
2%
5%
3%
1%
1%
0%
1%
1999
2000
1%
2001
2%
2002
2003
2004
2005
CONCLUSION:
Retail market segment is the most dynamic in term of growth rates. The large increase is
primarily generated through much larger supply of retail loans in recent years. There is still
enough scope for further growth.
DEVELOPMENT OF SERBIAN BANKING SEKTOR in 2007
Number of
banks
There are 36 banks in the market as of 30/06/07 (vs. 37 as of
31/12/2006)
New players
Hungarian OTP Bank overtook 3 banks (Niška, Kulska and Zepter
Banka). Belgien KBC Group overtooka A Bank. The first American bank
in Serbia, Opportunity Banka, obtained an operating licence in 2007.
Competition
As compared to the neighbouring countries, competition intensity in
Serbia is rather high. Moreover, the process of ownership
concentration isConcentration
carried out on
ongoing
basis.
level
in Serbia
banking
sector
60%
50%
5 2 ,6 %
5 1 ,0 %
5 0 ,3 %
40%
3 2 ,3 %
30%
3 1 ,5 %
2 5 ,8 %
2 1 ,6 %
1 8 ,2 %
20%
1 6 ,7 %
10%
5
6
6
5
8
1
30
23
20
0%
p rek o5%
5 % of
a k tive
over
assets
Number of
Broj ba na k a 2 0 0 5
banks
2 % -d o
5 %ofa kassets
tive
isp od 22%
% aof
k tive
2%
5%
Below
assets
2006
Juni 2 0 0 7
DEVELOPMENT OF SERBIAN BANKING SEKTOR in 2007
Share of foreign-owned banks in the total
assets in Serbia
90%
79%
80%
75.5%
69%
70%
60%
50%
40%
38%
30%
Furthermore, due to the increased
competition (and cross-border
financing) as well as quality market
dispersion, share of 5 biggest banks
in the aggregate assets still shows a
decreasing trend.
20%
10%
Share of 5 biggest banks in the total assets
in Serbia
0%
2004
2005
2006
2007
51%
50%
50%
In mid-2007 drop of the share of
foreign-owned banks was recorded
for the first time since 2004, which
primarily results from foreign
borrowing and capital increase by
local banks.
49%
48%
47%
47%
47%
46%
45%
45%
44%
43%
42%
2004
2005
2006
Juni 2007
Source: Raiffeisen
bank
BANKING AND ECONOMY
EUR/RSD ANALYSIS AND FORECAST

In 2006 RSD nominal appreciation towards EUR was 7.66%
In 2007 RSD deppreciated against EUR nominally for 0.90%
(31.12.2006-17.09.2007)

It is expected that the EUR/RSD would be around 79 level at the end
March 2009

2007
CPI was 11.9%
Trend EUR/RSD
Trend EUR/ CSD
History
History
30.03.2007.
81.5742
Forecast
30.06.2007.
79.0254
19.05.08
83.08
30.06.2008
31.12.2008
81.00
80.00
MONETARY POLICY and EFFECTS ON INTEREST RATES
Since September 2006, reference interest rate on dinars has been
reduced from 18% to 9.75%, which has brought about the following:
Reduction
in the
reference
interest rate
on dinars
more attractive overdraft facility due to significantly lower interest
rates
through increased stability of dinar, banks have started to offer
more massively dinar loans without foreign currency clause
Development of reference i.r. on dinars (2006 – 2007)
19,13%
20%
16,06%
18%
16%
18,00%
14%
15,25%
12%
10%
Se
p0
O 6
ct
N 06
ov
D 06
ec
-0
Ja 6
n0
Fe 7
b
M -07
ar
-0
A 7
pr
M -0 7
ay
-0
Ju 7
n0
7
Ju
l
A -0 7
ug
-0
Se 7
p0
O 7
ct
N 07
ov
D 07
ec
-0
Ja 7
n0
Fe 8
bM 08
ar
-0
A 8
pr
-0
8
8%
1 m Belibor
Ref rate
Izvor: NBS
MONETARY POLICY and EFFECTS ON INTEREST RATES
EURIBOR has recorded a significant growth since early 2006 (by
approx. 2% ), which has brought about the following effect:
Growth of
EURIBOR
Higher interest rates on foreign currency and dinar loans with
FCY Clause
Growth of EURIBOR (2006 – 2007)
5.00%
4.75% 4.77% 4.73%
4.30%
4.50%
4.03%
4.00%
4.12%
3.56%
3.87%
3.24%
3.50%
3.63%
2.97%
2.91%
2.50%
2.65%
1M EURIBOR
6M EURIBOR
08
31
.0
3.
20
07
31
.1
2.
20
07
30
.0
9.
20
07
30
.0
6.
20
07
31
.0
3.
20
06
31
.1
2.
20
06
06
30
.0
9.
20
31
.0
3.
20
01
.0
1.
20
06
2.41%
06
2.00%
3.24%
2.64%
30
.0
6.
20
3.00%
4.41% 4.44% 4.38%
3.85%
Source: Reuters
3. MACROECONOMIC OVERVIEW
REAL GDP GROWTH - in SERBIA (% yoy)
10
8,4
8
7,1
6
7
6,2
5,4
4,98
4,2
4,7
4,7
4
2,5
2
1,8
the economic activity
continues to “deliver”
strong numbers. GDP
growth yoy in H1/07
was 7.6% with
financial intermediation
and trade contributing
close to 20%.
0,8
0
f
20
07
20
06
-3,0
20
05
20
04
20
03
-2
20
02
20
01
0,1
-4
GDP (%yoy)
Industrial output (%yoy)
due to the estimated
decrease in the
agricultural production
(8%-10% yoy) forecast
for the GDP growth in
2007 is revised to the
level of 6.5%.
REAL GDP GROWTH – comparision to other countries
REAL GDP growth 2 0 0 7 , forecast
7,5
RUSSIA
7,1
SLO VAKIA
SERBIA
6,5
RO MAN IA
6,0
BULG ARIA
6,0
BH
6,0
ALBAN IA
6,0
PO LAN D
5,7
CZECH
5,0
4,6
CRO ATIA
4,3
SLO VEN IA
EU- 13
3,1
HUN G ARY
2,5
USA
2,0
0,0
5,0
4. RAIFFEISEN BANK IN SERBIA
RAIFFEISEN BANKA A.D.
Established in 2001 as the 1st bank with 100% foreign capital
More than 500.000 clients
91 branches
Universal bank with 4 business segments:
• Corporate Banking
• Retail Banking – Private individuals
• Retail Banking – SMEs (small & micro enterprises and professionals)
• Treasury & Investment Banking
Raiffeisen Leasing d.o.o. established in 2003
Raiffeisen Future a.d. established in 2006
Raiffeisen Invest a.d. established in 2007
LOAN PORTFOLIO INCREASE of Raiffeisen Int. (RBRS+RIEEF)
Serbia
1600.0
157.5
1400.0
1200.0
141.6
1000.0
100.9
800.0
253.3
351.9
187.6
288.7
600.0
681
573.3
381.4
200.0
*
RIHO
2006
2005
0.0
RBRS Corporate
RBRS Consumer
2007
400.0
442.5
RBRS SME
As at: 30.06.2007. In million EUR
* the amount does not include RZB portfolio
Source: Raiffeisen banka a.d.
RIEEF – new source of financing from abroad
Thanks to the possibility of providing direct financing from abroad, Raiffeisen
Group has managed to offer its clients very attractive and highly competitive
interest rates in the market.
Growth of RBRS and RIEEF lending in Serbia in
millions of euros
626
600 548
500
400
300
187
200
100
35
Ju
n06
Ju
l-0
Au 6
g0
Se 6
p0
O 6
ct
-0
No 6
v0
De 6
c0
Ja 6
n0
Fe 7
b0
M 7
ar
-0
Ap 7
r- 0
M 7
ay
-0
7
Ju
n07
Ju
l-0
Au 7
g0
Se 7
p0
O 7
ct
-0
No 7
v0
De 7
c07
0
RIHO
RBRS
Source: Raiffeisen
banka
Market position and market share
* RI (RBRS+RIHO) u Srbiji
Market position in Serbia
Total assets
1
*
Total loans
1
*
As at: 30.09.2007. Prepared by: Raiffeisen banka
Raiffeisen banka market share
2007
Corporate (L, M, S)
Gross loans
Deposits
**
13.9%
Consumer
Gross loans
12.6%
Deposits
15.4%
Total assets
Source: “Statistički bilten”
As at: 30.09.2007.
** due to cross border loans of certain banks – non accountable
**
TOP 15 banks by total (gross) loans
1,600
RIHO *
1,400
643
1,000
938
540
435
394
ProCredit
SG
EFG
Eurobank
AIK banka
HAAB
Komercijalna
Banca Intesa
RBRS
-
Vojvodjanska
200
347
309
292
275
251
230
Erste
619
400
Agrobanka
693
Piraeus bank
793
Volksbank
829
600
UniCredit
800
1,184
Alpha
1,200
* Since there are no official statistics for cross border loans - no available data for other banks here
As at: 30.09.2007. In EUR million
Source: NBS Prepared by: Raiffeisen banka
TOP 15 banks by total equity
450
400
90
*
350
300
250
358
349
341
231
200
228
150
207
200
197
172
100
163
138 134
122
50
90
60
Erste
Piraeus
banka
Alpha
OTP
Volksbank
Agrobanka
Unicredit
Vojvođanska
HAAB
Societe
Generale
Komercijalna
Eurobank
EFG Ste.
AIK banka
Banca Intesa
Raiffeisen
banka
-
* In Q4 2007 a significant capital increase of EUR 90 million was realized
As at: 30.09.2007. In EUR million
Source: NBS Prepared by: Raiffeisen banka
CORPORATE BANKING DIVISION
Started with operations in July 2001. godine
Leading bank for corporates:
•
•
64 of top100 domestic companies are banking with Raiffeisen banka
79 of top100 foreign investors are banking with Raiffeisen banka
31.dec.04
31.dec.05
31.dec.06
Number of clients
2,551
3,081
3,170
30.jun.07
3,170
Loan portfolio (in EUR mio)
373.3
573.3
667.2*
774,7*
Deposits (u EUR mio)
267.9
254.5
415.2
428.7
* Raiffeisen International in Serbia (RBRS + RIEEF)
SE&M – Small & Micro Enterprises and Professionals
started with operations in January 2003.
one of leading banks in terms of loan portfolio
focus in 2008 will be on: increase in the scope of cooperation with micro clients via intensified loan activities, increase of client deposit base,
further development of long-term relations with existing clients
service quality improvement, new products introduction and even larger process efficiency aimed at client’s satisfaction increase
31-Dec-05
31-Dec-06
31-Dec-07
Number of clients
11,011
17,578
23,956
Loan portfolio (in EUR million)
100.9
144.5 *
212.1 *
Deposits (in EUR million)
33.3
49.2
72.4
*Raiffeisen International (RBRS + RIHO) in Serbia
TREASURY & INVESTMENT BANKING DIVISION
Leading treasury bank in the country
• Market share in FCY trading with clients –20,99% in 2006.
• Market share in FCY trading with Banks – 15,57% in 2006.
 The first reference rate for local currency was introduced on Raiffeisen banka’s initiative BELIBOR i BEONIA
Brokerage
Won takeover bid mandates to represent:
• German pharmaceuticals company Stada Arzneimittel AG in the acquisition of
Hemofarm a.d., the largest takeover in 2006 in Serbia, transaction size: EUR 475 mio +
squeeze-out EUR 12 mio
• Cyprus Popular Bank in takeover of Centrobanka a.d, transaction size: EUR 33 mio
• largest Austrian insurance company UNIQA in takeover of Zepter Osiguranje,
transaction size: EUR 16 mio
• Findomestic bank in takeover of Nova banka, transaction size: EUR 24 mio
Custody
• First authorized Custody Bank on Serbian market.
• Leading provider of clearing and settlement services for Belex and OTC trades:
Voluntary Pension Fund-Raiffeisen Future a.d.
The first bank in Serbia that established 100% owned subsidiary for management and
organization of Voluntary Pension Fund
Raiffeisen INVEST a.d. Beograd Investment Fund Management Company
RAIFFEISEN LEASING D.O.O.
Founded in February 2003 and started with full-fledged
operations in August 2003
Shareholders:
• 50% Raiffeisen banka a.d.
• 50% Raiffeisen-Leasing International GmbH, Vienna
Serving all three main client segments:
•
corporates, private individuals and SME
Branches: Belgrade, Novi Sad, Cacak, Nis, Subotica and
Kragujevac
Market Share: 22.82%
Number of signed contracts
Portfolio (in EUR mio)
31-Dec-04
31-Dec-05
31-Dec-06
4,087
7,497
10,942
79,2
137,2
156,0
Branch development – 91 branches in 8 regions (as at: 31.Dec. 2007)
1.Region Belgrade I
• Beograd (19)
• Pančevo
• Grocka
• Požarevac
• Smederevo
• Vršac
2.Region Belgrade II
• Beograd (19)
• Obrenovac
• Stara Pazova
• Lazarevac
3.Region North Vojvodina
• Subotica
• Sombor
• Kikinda
• Bačka Topola
• Senta
4.Region South Vojvodina
• Novi Sad (5)
• Bačka Palanka
• Zrenjanin
• Vrbas
• Inđija
125 branches by 2010.
5.Region Central and West Serbia
• Šabac
• Ruma
• Sremska Mitrovica
• Loznica
• Valjevo
6.Region Šumadija
• Kragujevac (2)
• Kruševac
• Jagodina
• Aranđelovac
• Paraćin
7.Region South-West Srbija
• Čačak (3)
• Novi Pazar
• Kraljevo
• Užice
• Ivanjica
• Gornji Milanovac
• Prijepolje
8.Region South Serbia
• Niš (3)
• Pirot
• Vranje
• Leskovac
• Zaječar
• Bor
5. INVESTMENT OPPORTUNITIES – REAL
ESTATE
OFFICE MARKET – General perspective
Serbian office market is mainly concentrated in the capital Belgrade and
is split into 2 areas:
1. Old Belgrade (“downtown”)
2. New Belgrade
The majority of development activity is focused
on New Belgrade
Prime office market (Class A) enjoys high pace of growth
In comparison to other European cities alike, Belgrade Class A office
stock is relatively low:
Belgrade
Class A O ffice Stock (in m2 )
Total
No. of citizens in millions
270. 000*
1,6
Zagreb
600.000
0,8
Bucharest
400.000
1,9
*Thereof 100.000 m2 is under construction
Source: Wikipedia
OFFICE MARKET – Market Demand &
Demand for rental space:
conditions
Belgrade office market is characterized by relatively modest demand up
to now:
1. Market demand amounted to approximately 25.000 sqm in 2006
2. Number of international occupiers looking to get a foothold on the
Serbian market
Price:
Prime A class rents’ net prices are similar to comparable eastern
European cities such as Bucharest/Warsaw and amount to:
• EUR 21/sqm/month in Old Belgrade
• EUR 19/sqm/month in New Belgrade
Following factors influence price the most:
• Quality of works, availability of parking and others
• Size of leasable area
• Duration of lease agreement (longer the lease period = lower the
rent)
Vacancy:
The amount of new development in New Belgrade is starting to
undermine rental levels as landlords compete for tenants
Vacancy is around 9% and is likely to increase further with new
developments
RETAIL MARKET – SHOPPING CENTRES / MALLS
Compared to European standards, retail market in Serbia is in its early stage of
development:
Retail leasable area per 1,000 inhabitants in m2
Belgrade
CEE countries
EU countries
15
85-100
170
It offers an excellent market potential, which is expected to grow up to 300,000
sqm in 2010
Retail sector is still fragmented and still dominated by local players, which is
usual for a market evolving from a controlled economy to a free market
Number of retail projects is currently
underway (among the largest are Delta City;
MPC Shopping mall Ušće; Idea, VeranoVero etc.)
Recent trend: new supermarkets around
the city.
RETAIL MARKET – SHOPPING CENTRES / MALLS
Rental Prices
Prime rents in Belgrade are some of the lowest in Eastern European
capital cities:
2
Rental prices in EUR (m / month)
Belgrade
High street, downtown
other
60
15-25
There is no market evidence for supermarket, hypermarket lease
transactions; however the price in range of EUR 7-11 per sqm should be
treated as reliable
RESIDENTIAL PROPERTY MARKET
The residential inventory in Belgrade has shown a
steadily increasing trend over the past few years.
Some new residential development is happening in
Novi Sad and Niš.
Attractive Locations
The New Belgrade area is becoming increasingly
popular (cca. 800 new flats have been constructed
within the last two years and cca 1.800 units are under
construction).
Other attractive locations include the city centre,
Čukarica, Zvezdara, Dedinje. Vračar, Senjak, Banovo
Brdo and Voždovac
New residential developments are mostly built to a
medium standard due to purchasing power of
citizens.
RESIDENTIAL PROPERTY MARKET
Sale prices ranges:
• Up to EUR 1.300/sqm in the city periphery
• EUR 2.000 – EUR 2.500/sqm in the city centre, Vračar, Dedinje,
Senjak
• EUR 1.300 – EUR 1.900/sqm in New Belgrade
Average rents for good-quality premises in prime locations are between
EUR 10/sqm/month -EUR 18/sqm/month.
INDUSTRIAL PROPERTY MARKET /
WAREHOUSES
The underdeveloped industrial market is rapidly changing as
requirements increase for distribution warehouses:
• Needed by foreign investors attracted to Serbian market due to
cheaper labour and favourable tax regime
• To serve the expanding retail and service sectors
• Also driven by increase market activity of third-party
logistics providers
Modern logistics developments are mostly owner-occupied.
Distribution warehouses and light-industrial properties are located:
• Along important traffic links: in Krnješevci and Šimanovci districts
• In the Port of Belgrade
• Outside of Belgrade, industrial and technology parks have been
developed in the regional cities - Novi Sad, Vršac and Niš
The total stock of modern warehousing in the greater Belgrade area is
estimated to be less than 90.000 sqm (mostly built in last three years as
owner-occupied projects)
INDUSTRIAL PROPERTY MARKET – Market
Demand
Supply:
Market is undersupplied and attracts attention of both domestic and
foreign developers. Difficulties in finding a site large enough and security
of land ownership are the major obstacles for market penetration of
international developers.
Price:
Industrial rents can reach EUR 8/sqm/month and more for prime
modern space.
Rents for old non-refurbished warehouses, mainly located in
Belgrade’s port, range between EUR 3 and EUR 5 /sqm/month
Vacancy:
Currently close to zero as majority is owner occupied.
Expected to increase as large amount of old stock
may become empty as tenants upgrade their facilities
/ to be converted into residential or office space
WHY TO INVEST NOW?
Political environment should get more stable
Interesting market in terms of population and growth
rates
Partners you need are already here
First wave of Greenfield investments – still industries
which are underserved
In Belgrade good human resources available – very
similar culture to ours
SERBIA, IT’S TIME TO INVEST!
THANK YOU FOR YOUR ATTENTION!