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A G E N T
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EUROPE
M A R K E T S ]
reforms and with a shockingly high rate of unemployment alle-
viated chiefly by a large informal sector.
Raiffeisen Bank International
None of this has prevented Raiffeisen, which has retail and cor-
porate banking operations here, collecting a set of scores that are
as close to perfection as the dignity of the respondents permits.
However, the clients have not rallied in sufficient numbers to war-
rant the translation of these excellent scores into a formal rating.
UniCredit
The banking sector is one of the few in Bosnia Herzegovina to
have attracted foreign investors, and UniCredit retains a custo-
dy presence here that is bolstered by a 76-branch retail banking
network. It was into the custody and clearing business early,
settling the first trades for cross-border investors on the Sarajevo
Stock Exchange when it opened for trading in 2002. Its custody
licences and settlement connections span both halves of the state,
but UniCredit has attracted insufficient responses to make any
sort of assessment of how its securities services have evolved.
BULGARIA
ALBANIA
This marks the debut in this survey for a country which dis-
appeared into the brutal Stalinist cul-de-sac masterminded by
Enver Hoxha. Though the communist regime collapsed in 1990,
along with those elsewhere in east-central Europe, the country
lapsed into economic and political turmoil in which a series
of pyramid schemes did nothing to enhance the reputation of
market capitalism. Unsurprisingly, it failed to develop a capital
market. The Tirana Stock Exchange, established as a department
of the Bank of Albania in 1996, remained completely moribund
despite obtaining licences to operate as a regulated securities
market in both 2003 and 2005. However, a new Albanian Secu-
rities Exchange (ALSE) started trading government bonds in
February 2018.
Raiffeisen Bank International
Raiffeisen, which purchased the former state-owned Albanian
Savings Bank in 2004, has a substantial presence in the country,
serving both corporate and retail customers through a 78-branch
network and managing local investment and pension funds too.
The bank has not attracted enough responses to be rated, but
the scores are outstanding in all service areas and, in particular,
Relationship Management, Client Service and Innovation.
BOSNIA HERZEGOVINA
The Sarajevo Stock Exchange hit bottom in early 2018 and has
climbed unsteadily since. The Banja Luka Stock Exchange in
the north is up handsomely this year too. However, the 10-year
old Vienna Stock Exchange BATX index – which encapsulates
the most liquid stocks listed in both Sarajevo and Banja Luka
– tells a less encouraging story: unsteady decline over 10 years
and steady decline over the last four. This is not surprising for
divided markets based in a less-than-united and poorly governed
country hosting an economy struggling to introduce market
60
Global Custodian
Spring 2019
Although the Bulgarian economy has grown steadily since the
local banking crisis of 2014, MSCI removed Bulgarian stocks
from the Frontier Markets index in 2016. The stand-alone MSCI
Bulgaria Index suggests that investors have made money here in
only two out of the past four years.
Citi
Sofia was not part of the Citi direct clearing and custody
network until 2013-14, when the American bank acquired the
sub-custody assets of ING Bank, which included Bulgaria. Citi is
not inundated with responses from clients actively trading and
investing in Bulgarian securities.
Raiffeisen Bank International
The Austrian bank has been building a presence in Bulgaria
since the mid-1990s and never by acquisition (though, with the
parent bank having recovered its financial strength, that may be
about to change). It has a sizeable retail network of more than
130 branches but is also active in the trading as well as safekeep-
ing of Bulgarian securities. Raiffeisen has not attracted enough
responses for its custody services to be assessed properly here,
but the responses it has received suggest excellence in Relation-
ship Management, in particular.
Eurobank
No provider received more responses here than Eurobank, and
the collective verdict of the respondents is that their provider is
delivering a perfect service. (See page 78 for individual scores).
The Greek bank certainly cannot be accused of less-than-total
commitment to its south eastern European neighbour. Eurobank
bought most of Postbank here more than 20 years ago, and later
merged it with another Bulgarian acquisition, DZI Bank. The
restructuring of the Greek banking industry added the Bulgarian
operations of Alpha Bank, and in November last year Eurobank
further bolstered its presence with the acquisition of the Piraeus
Bank subsidiary in Bulgaria as well.