Emerging Europe

Funding constraints of the kind familiar to small and medium-sized enterprises (SMEs) are now starting to impact multinational corporations (MNCs) with emerging-market (EM) exposure, pushing them to look to their banks for new options to obtain financing.

Seven years after the first default of Kazakhstan’s largest bank, its lenders are once again under pressure. Can the sector survive an economic slowdown and dramatic devaluation?

Turkish borrowers have become increasingly active in the Eurobond markets in recent years. But with funding costs rising, investment falling and political risk ever-present, could the last large source of new bonds in emerging Europe be about to dry up?

Ljubljana is a happier place these days, overcoming the banking and political crisis weighing on its prospects. Investors should take note: Slovenia is one of several smaller European countries making a comeback.

Timing is right for Post Bank launch, says chairman. Branch network will be bigger than Sberbank’s.

There is no need for panic. Emerging market credit is outperforming US high yield and the investor base is stable.

Moody’s has followed S&P’s lead by downgrading the borrower to junk status in line with its Euromoney country risk score. Other oil producers are at risk, the survey predicts.

Even robots can be made to learn from experience nowadays. Given what happened to Hungary, Poland’s downgrade should be no surprise.

Ukraine finished 2015 with a slightly improved score year-on-year, despite seeing turbulence on all fronts in the ECR scoring categories throughout the year. Its score dipped in the fourth quarter of 2015, but ECR experts see some reasons for hope amid the gloom.

Banking sector clean-up to continue; UniCredit heads for the exit.

The country’s banking sector has staged a remarkable comeback over the past two years and is well-positioned to support growth and investment. Whether or not that will materialize, however, depends on its politicians.

The bailout of Parex Banka at the height of the financial crisis helped push Latvia into deep recession. Today, reborn as Citadele and with a global all-star cast of owners, the bank is well on the way to becoming a national asset.

The Baltic state leapfrogged both sovereigns in the global ratings last year, making its credit ratings outdated.

Poland’s sovereign bond spreads are in turmoil, after a shock downgrade by Standard & Poor’s (S&P). The move follows a sharp drop in its political risk score in the latest Euromoney Country Risk (ECR) survey.

Investment-banking volumes in emerging Europe have fallen to their lowest levels for more than a decade. Some international banks are withdrawing capacity, while there is little sign of a pick up in the capital markets. So why are some of the universal banks still making positive noises?

VTB Capital cemented its position as Moscow’s leading investment bank last year. With cross-border deals for Chinese and Indian clients it is becoming more than just the adviser of choice for Russian corporates. But will the firm’s ambitions get the better of it?

It shows how far expectations have fallen for CEE that its most exciting prospect is now Romania.

Serbia’s ex-finance minister leads charge; sovereign restructurings ‘can open doors’.

While irked by western dominance of Swift and determined to assert its monetary independence, the prospect of Russia going it alone on payments and messaging remains remote.

The likelihood of fresh elections is delaying the structural reforms necessary to prevent the debt burden from snowballing.

A year ago, we at Euromoney marvelled at the near perennial progression of personages passing through the portals of Bucharest’s finance ministry in the 25 years since Romania’s tyrannical Nicolae Ceaucescu was toppled: 21 finance ministers since 1989.

Pricing slashed as emerging market IPOs struggle; political in-fighting ‘threatens Georgia’s reform record’.

Proposed privatizations in central and eastern Europe need to be viewed with scepticism, as they have a habit of disappointing.

The new trading platform for emerging-market currencies is now live with the Indian rupee, Brazilian real, Chilean peso and Colombian peso.

A new government emphasizing Hungarian-style nationalist, unorthodox policies with increased public spending has raised uncertainty over Poland’s risk profile. However, the sovereign borrower is in a strong position and is less indebted than Hungary.

Allowing private equity firms to take over struggling banks is an inherently risky strategy for governments and regulators.

SME banking has been a top priority for Turkish lenders since the country’s regulator called time on the consumer boom in late 2013. Can the segment keep its cool in the face of rising local economic and political pressures?

Turkey’s economy has been slow to go digital but increasing smartphone penetration is offering unparalleled growth opportunities for banks, mobile operators, e-commerce platforms and a host of new generation players. Striking a balance between competition and collaboration will be key as aspiring innovators face up to the challenges posed by big data, regulation and security.

Russia is a safe haven, say bankers; local liquidity holding back supply.

The sovereign has climbed another three places in the global rankings compiled by Euromoney Country Risk, and is keeping pace with Bulgaria and Romania.