“We have assumed that only a strong own deposit base is a reliable source for further business growth,” says Zdenko Adrovic, CEO of Raiffeisenbank Croatia (RBCR). Customer accounts grew by 21% in 2007, with an impressive 32% in the corporate segment.
RBCR has focused on raising profitability through increased non-interest income from additional services to customers, decreased portfolio risk and reduced processing costs. New product offerings drawn from the wider group include pension and investment funds, which attracted CrK553m (€77.2m) from retail investors in 2007. The strategy is paying off, with return on equity growing in 2007 despite the lending restrictions, to almost 17%, as profits rose 43% to CrK566m.
“In 2009, unstable market conditions will open a lot of opportunities for flexible financial institutions. A precondition of high flexibility is structural balance and cash reserves,” says Mr Adrovic. “The main challenge for 2009 is on the funding side. Stable liquidity based on deposit collection is the ‘holy grail’ for the banking industry in the period of the global crises.”
