Source of uncertainties in Raiffeisen's 2011 budget

The possible emergence of a second wave of bad loans, contracted by public sector workers, is the main uncertainty factor marking the building up of Raiffeisen Bank's 2011 budget, says Bogdan Popa, the bank's CFO.
"We've started working on next year's budget and though overall there are fewer uncertainties than a year ago, there still are question marks on certain issues and the most important one is the dynamics of bad loans, as the fallout of the VAT raise and reduction in public workers' salaries is still halfway. I believe we'll witness another wave of effects in the next 6-12 months," Popa told ZF in an interview.
Raiffeisen has a special programme monitoring clients facing problems, including standard solutions of temporarily cutting the interest rate for 6-12 months without modifying the final term, rescheduling or grace periods of up to 3 months, but also solutions adjusted to the specific situation of a certain client.
The bank's 2011 budget starts from the premise there will be no further economic downturn, as all market forecasts indicate, a development likely to be supported by foreign markets. "I do not believe there will be a second downturn in the West. Our budget will be in line with the policy of cementing our leading position".