The possible emergence of a second wave of bad loans, contractedby public sector workers, is the main uncertainty factor markingthe 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 overallthere are fewer uncertainties than a year ago, there still arequestion marks on certain issues and the most important one is thedynamics of bad loans, as the fallout of the VAT raise andreduction in public workers' salaries is still halfway. I believewe'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 facingproblems, including standard solutions of temporarily cutting theinterest rate for 6-12 months without modifying the final term,rescheduling or grace periods of up to 3 months, but also solutionsadjusted to the specific situation of a certain client.
The bank's 2011 budget starts from the premise there will be nofurther economic downturn, as all market forecasts indicate, adevelopment likely to be supported by foreign markets. "I do notbelieve there will be a second downturn in the West. Our budgetwill be in line with the policy of cementing our leadingposition".
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