Emerging Europe

European companies, and particularly small and medium-sized enterprises (SMEs), could yet suffer a cash-flow squeeze from direct debits under the Single Euro Payments Area (Sepa) regulation, despite the European Commission handing companies an extra six months to comply.

The promise of cross-selling other banking services and products was often sufficient to justify a bank lending to a large corporate client. But even if that works well, the financial justification for lending is questionable, at best.

As banks become more and more unwilling to take on commercial debt financing and governments seek to expand exports to boost recovery, export credit agencies are taking on new, expanded roles.

The scale of Ukraine’s challenge to correct economic balances is staggering, even if a political consensus is reached that would see an IMF support package. What’s more, markets might be understating sovereign default risk given strict debt covenants in the 2015 Russian-backed dollar bond that is sure to be used in a regional chess game, say analysts.

Although market players discern substantial differences between the fragile-five economies – notably in their current-account profiles – they remain, as a group, especially vulnerable to domestic and international market shocks, says bearish analysts.

Despite its political problems, Romania’s improving economic fundamentals justify its higher ranking in Euromoney’s Country Risk Survey.

Emerging markets (EMs) are showing greater differentiation in risk correlations, despite the media hype, but notable risk correlations persist elsewhere for currency markets, especially economies tied to the commodities sector.

With civil unrest on the streets of Ukraine showing few signs of stopping, we ask four ECR experts if a solution can be found to the divided country’s problems.

Central bank takes action to mitigate a prolonged lira slump.

Privatization a “great opportunity”; Credit demand remains weak

Central and eastern Europe is attractive for private equity houses. But they need to get their priorities right.

Surveys suggest that virtual currencies look a safer bet than local stocks and property.

The new chief executive of Bank of Cyprus faces challenges on a scale that perhaps dwarf those he faced when restructuring the investment bank at RBS. Compelled to deal promptly with mounting bad debts, he also has to cope with the local reputational aftermath of the bank’s EU-imposed bail-in. Will his diet of “hard work and heavy lifting” see the bank through its crisis?

Georgia’s youthful finance minister, Nodar Khaduri, is committed to an open, business-friendly economy and hopes to revive foreign direct investment. A pro-western, EU-focused approach is also a central policy plank.

Emerging-market assets have fallen thanks to domestic policy risks, rather than Fed-tapering fears, triggering market contagion, as Turkey and Argentina lurched into crisis mode. However, India’s economic rebalancing shows the way forward for EMs out-of-market favour.

A massive currency sell-off this week echoes the dark days of emerging-market crises, say bears. Analysts are resolutely underweight emerging market bonds and stocks, citing the legacy of the recent credit boom and the absence of structural reforms.

A toxic combination of large external financing gaps and US liquidity withdrawal has increased the risks of investing in triple-B rated emerging market (EM) sovereigns. With many countries facing elections this year and stalling on structural reforms, economists taking part in Euromoney’s Country Risk Survey have placed five of the larger EMs under the microscope.

Court in Aix-en-Provence rules that Mukhtar Ablyazov, the former chairman of BTA, once Kazakhstan’s largest bank, should be extradited to either Russia or Ukraine to face fraud charges. The ruling is the latest twist in the saga of a man who once bestrode Kazakhstan's banking sector. Euromoney explores his fall from grace.

What is the truth about Mukhtar Ablyazov? Is the former head of Kazakh bank BTA a fraudster on a par with Madoff and Stanford, as prosecutors from Russia and Ukraine to England and France claim? Or is he the persecuted victim of his home country’s political elite? One thing is for sure: the hunt for Ablyazov, and billions of dollars in assets he is alleged to have illegally appropriated, is one of the great sagas of our time.

In an in-depth interview with Euromoney, the head of the powerful Russian state lender discusses domestic bank competition, regulation, credit growth and reveals the impact of state ownership.

BNP Paribas beats Italian and Spanish banks for; Rabobank Polish unit; Commits to third-biggest bank in Ukraine

Foreign buyers are attracted by news of an export-led recovery and privatizations. Getting them hitched for the long term, however, will require a boost in local macroeconomic demand, including dealing with banks’ residual bad debts.

Internationals take a majority of Energa; IPO slides in secondary market

A flurry of strategic sales by western investors and private equity firms kept corporate financiers busy last year. But these deals mask a problem: while financing is plentiful, sellers can’t bring themselves to be realistic on pricing.

VTB’s chief executive likens his role in Russian banking to that of a surgeon in a state-owned clinic. He’s certainly carved out a strong position in corporate and investment banking. He insists he can operate successfully in Russia’s new state-controlled capitalism, while resisting political pressure. Can he make what critics call his ‘grandiose scheme’ for VTB work?

Russian and western firms have shovelled millions into investment banks in Russia. Although their ranks are much diminished, they remain dug in: doggedly hopeful, despite little chance of a change in their prospects.

The CEO of VTB reveals the Russian government could see its stake in the lender diluted if it does not subscribe to a new round of capital-raising in the coming years, as he defends the bank’s state-backed business model and claims majority ownership is not necessary for sovereign support of the country’s second-largest bank by market cap.

CEO Andrey Kostin of the Russian state lender eyes investment banking cuts and a cap on its private-equity business, amid a more mature phase of growth in the heavily-competitive domestic market.

Euromoney explores the changing face of Russian finance, with a new generation of firms competing with established players in a crowded investment-banking scene. Coverage includes macro risk, Sberbank's investment-banking dynamo, Renaissance Capital's great expectations, the consumer-banking boom and the commodities cycle.

RenCap says 2013 operational profit is ‘a major achievement’, with 50% of revenues from Africa, boosting the lender’s diversification strategy after a volatile restructuring.