Global Custodian Spring 2019 | Page 64

[ S U R V E Y | A G E N T B A N K S I N F R O N T I E R 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-