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ment by ostentatiously advertising its compliance with Euro-
pean Union (EU) laws and regulations. The country hopes to
join the EU in 2025. In fact, the government of Macedonia is so
keen to do so that it has, following vociferous Greek objections,
changed the name of the country. There is a privately-owned
central securities depository (CSD) too, established in 2001 by
a group of brokers and banks to dematerialise stock certificates,
settle MSE transactions DvP, keep a record of who-owns-what
and provide securities borrowing and financing services.
Raiffeisen Bank International
Though the Austrian bank has received a few responses here,
Raiffeisen does not actually offer a custody service in Skopje
directly. Instead, investors access the market indirectly through
a local bank. Scores are mostly in the Good range (5.00-5.99).
M A R K E T S ]
dented performance this year (See page 80 for category scores).
Unicredit also gets a significantly higher number of responses in
this market than any other provider.
Raiffeisen Bank International
The Austrian bank services clients in Bucharest via a direct link
to the local central securities depository (CSD), the Depozitarul
Central, which migrated successfully to the TARGET2-Securi-
ties (T2S) settlement platform operated by the European Central
bank (ECB) in the first wave of June 2015. Judging by the scores,
which are well up on a year ago, the direct link to the CSD works
for clients. In fact, the scoring of the questions about settlement
and safekeeping is extremely high.
Société Générale Securities Services
The French bank top scored here last year. It has done less well
this year. Although it attracted only a few responses, the details
point to difficulties for clients in on-boarding, settlement, asset
safety and servicing, compliance, technology and relationship
management.
Not every respondent agrees, however. “Société Générale Ro-
mania (BRD) is a great provider, demonstrating high profession-
alism and willingness to adapt and to help,” writes one. The bank
is also well-entrenched in Romania, having bought a majority
stake in Banca Română pentru Dezvoltare (BRD) 20 years ago.
Citi
Citi strengthened its franchise here with the acquisition of the
ING custody business in Bucharest in 2013. The clients are bare-
ly visible in the survey this year, and the average scores, such as
they are, are down on 2018, but the long-term outlook for banks
servicing foreign investors in this market is bright.
SERBIA
ROMANIA
Romania has a large domestic market packed with cheap
labour (most famously, software engineers) that is attractive to
near-shoring multinationals. In fact, it was consumption that
turned Romania into the fastest growing economy in central and
eastern Europe from 2013, until it began to over-heat in 2016-17,
with both government borrowing and the trade balance turning
negative. This has dampened growth since, making harder for
the Bucharest Stock Exchange (BVB) to out-perform, and to
gain emerging market status. Though MSCI has applauded the
efforts of the BVB to improve liquidity by cutting trading fees
and introducing market makers, hopes that the country would
be elevated to the MSCI Emerging Markets Index last year were
disappointed. FTSE Russell has also kept Romania on its watch
list. A BVB collapse in late 2018, sparked by a characteristically
unexpected volte-face by the Romanian government on the taxa-
tion of banks and consumer access to pension savings, has yet to
be fully corrected.
UniCredit
UniCredit Bucharest is still opening and closing accounts effi-
ciently, keeping cash and securities safe, collecting entitlements
on time, settling trades promptly and engaging fully with clients.
It is the volatility in the scoring of non-core services that has
64
Global Custodian
Spring 2019
The Belgrade Stock Exchange (BELEX) was re-founded in the
1990s and continued to trade throughout the civil wars, but
really only developed as an equity market from 2010. To improve
liquidity, the exchange embarked on a campaign to encourage
Serbian companies to IPO, deploring the fact that it had not
hosted one since 1940. In October last year Fintel Energija duly
became the first company to float in Belgrade since the Second
World War.
Though the stock market has not started 2019 well, the last
three years have seen it climb upwards in line with rising eco-
nomic growth. The interest from abroad is likely to be sustained,
for Serbia is now treading the familiar path to accession to the
European Union (EU). The economy of Serbia is already closely
tied to the EU in terms of both exports and inward capital flows,
but the government is now also reducing public debt, deregu-
lating the labour market and stabilising the financial system. As
part of that programme, the balance sheets of the banks are be-
ing cleaned up – EU banks own a majority of the banking assets
in Serbia already – and investment from abroad, both direct and
indirect, is being encouraged.
UniCredit
UniCredit, which has a retail bank here, entered the Serbian
market the year the Yugoslav wars finally ended in 2001. Eight-