Corona Virus Update

 

as of 15 April 2020

Apart from taking all measures to prevent the spread of COVID-19, we want to keep our customers informed. Please find our latest updates below.

Research

CEE and Austria: The fiscal costs of the “Great Lockdown”

The costs of the COVID-19 pandemic will be huge for all states. Austria and most of the Central and Eastern European countries are taking substantial fiscal and monetary policy steps to counteract the economic fallout of the corona lockdown. The same applies to guarantees, loan moratoria and tax exemptions. In most of the countries, the economic policy countermeasures amount to 5-10 percent of economic output (see chart).

 

Those CEE countries that have fiscal and monetary policy leeway (e.g. Czech Republic, Poland) or where a severe economic slump is imminent (Croatia, Hungary) are particularly active. In Russia and Romania, the aggregate economic policy response has so far been moderate. Romania has very little room for maneuver given the pro-cyclical fiscal policy of recent years. The budget deficit was already large before the epidemic. In Russia, the focus is still on preserving the accumulated buffers, without much state support for companies and employees. This could well change in the course of the year – when there is a little more predictability about the COVID-19 impact on the country and the oil market conditions.

 

For the region’s EU countries, it will be crucial to participate in the support measures at the EU level and that the EU increases any relevant support pots for the region, if necessary, so that the EU crisis management does not appear to be too euro area-focused. For weaker countries outside the EU, some support from the IMF, but also the EU and the World Bank, will be available, but the cost of the health crisis will still pose a tough challenge to these countries.

Fiscal Packages

Our most demanded Services

Global Investor Services

We are pleased to report that on the Global Investor Services side, our team continues to offer highest quality services even in the current crisis situation.

 

Especially on the brokerage side but also in terms of custody transactions we experienced a massive increase in activity. Contrary to expectations we saw an almost balanced traffic of buy (47%) and sell (53%) volumes. We are extremely proud to report that these volumes were processed smoothly in 100% home office mode in this division – including all operational units.

 

As far as our custody services are concerned, our direct access to 10 Central Securities Depositories throughout CEE is a robust and bullet-proof set-up in the current environment. With stringent BCP procedures and our efficient operating mode, we are navigating through the crisis with confidence.

 

Besides, we have conducted several annual service reviews with our dear customers remotely and are proud to report that we have also conducted the first fully fledged “Due Diligence Visit” – including live system presentation – in virtual mode.

Asset Management

Our services also include Asset Management, which is provided by Raiffeisen Capital Management.

 

Especially in the last few weeks, customers trusted in the expertise of RCM and committed additional funds to our specialists. We now manage approximately EUR 50 bn in the RBI Group overall for customers in the institutional and retail business segments.

 

Beside that RCM is having a strong SRI focus in the investment process and was named “Best Asset Management Company for Multi Asset Solutions” by Scope Group (www.scopegroup.com) in 2020.

What does this looming recession mean for our bank?

Overall RBI is well prepared for the expected economic downturn:

 

  • We have strong equity ratios across our group.
  • Our NPE ratio is on an all-time low.
  • Our liquidity buffers stand at comfortable levels.

 

Our staff is highly motivated and committed to serving and supporting you during this difficult time. Although we must keep apart physically, we have moved even closer together. We will for sure remain your dedicated Relationship Bank during and beyond the Corona crisis.

We will continue to update you on a regular basis. Please don’t hesitate to contact any one of us or your Relationship Manager should you have any questions or concern. Stay healthy!

Please contact us for further information

Our top priorities

the Health of our employees & clients

our Business Continuity Plans (already fully in place)

Our focus on serving you

being well-prepared for economic downturn scenarios

Health of employees & clients

Safeguarding the health of employees and customers as far as possible while at the same time maintaining business operations is a top priority for RBI’s Management Board. In recent weeks, extensive precautions have therefore been taken at RBI and its domestic and foreign group companies. Of course, the decisions and recommendations of the Austrian federal government as well as the governments in the countries in which RBI operates with its own companies are taken into account when further planning and, if necessary, introducing additional measures.

Business Continuity Plans

The RBI Group’s security organization has implemented a Business Continuity Management System, which ensures the availability of business processes for various crisis scenarios. This also applies to the current situation. The maintenance of the processes required for RBI’s business is ensured by the location-independent availability of the necessary resources (infrastructure, IT equipment, employees, communication). 

THE MOST IMPORTANT CURRENT MEASURES

For the time being, these rules will apply until mid-April, but may be lifted, extended or tightened earlier depending on developments.

  • As of Monday, 16 March, the majority of employees at RBI’s Vienna head office and its Austrian subsidiaries will work from home. Key functions for banking operations are performed both in the home office and at the location of the respective companies. On the one hand, this reduces the contact between RBI’s staff and other people, e.g. in public transport, and at the same time enhances operational security.
  • Similar measures are being developed for the foreign subsidiaries and other branches of RBI, depending on the respective local situation.
  • Business trips that are not absolutely necessary will not be undertaken; business trips to defined crisis regions are prohibited.
  • RBI’s employees have received clear information and instructions on how to behave in case of illness in order to avoid endangering colleagues as far as possible.

Being well-prepared for economic downturn scenarios

RBI regularly conducts internal stress scenarios and participates in external stress tests conducted by the supervisory authorities. The last EBA stress test simulated a sharp devaluation of the Russian rouble and a sharp decline in the price of oil. RBI performed well in these tests.

Ratios / NPL

RBI’s CET1 ratio is very good at 13.9 per cent, and the proportion of non-performing loans is very low.

Publication

RBI will publish its annual report for 2019 on 18 March.