Banking small and medium-sized companies across central and eastern Europe has become intensely competitive for the regional banks. Even amid the anaemic economic growth of last year, competition to grow the SME client base remained high as banks sought to expand their market share and boost assets.
Raiffeisen Bank International stood out last year, delivering strong growth in the business across multiple markets and offering solid support to SME clients, especially in Ukraine, in key areas such as financing, digital solutions and sustainability.
Raiffeisen’s SME banking business not only provided substantial financing to the engines of many of the region’s economies but also supported companies with services, products and advice to enable them to grow.
This was particularly evident in Ukraine, where Raiffeisen last year banked more than 25,000 new business banking customers – small and micro businesses – providing some Hrn4.1 billion ($101 million) in loans, including Hrn205 million to agricultural businesses.
In addition, the bank implemented several projects related to raising foreign financing under new agreements with international financial institutions including the European Bank for Reconstruction and Development and the US International Development Finance Corporation.
It was a similar story across other central and eastern European markets. In Albania and the Czech Republic, for example, the bank grew its SME clients year on year by 19% and 15%, and its lending by 21% and over 5% respectively. In turn, this helped drive up net commission from SME banking in Albania by 38% and revenues by 14% in the Czech Republic.
At the heart of the bank’s SME business growth last year were digital services and sustainability related lending.
This included developing its digital channels for remote servicing of customers in Ukraine, enhancing the capabilities of its Smart Business app in Romania and improving its online lending services across multiple markets.
Raiffeisen is among the leading providers of sustainable finance in the region. Last year, it extended its green unsecured loans for private individuals and SMEs to Albania, Kosovo, Slovakia and Bosnia and Herzegovina, and it launched a new sustainability-related home equity product in Hungary designed to help finance appliances that improve a property’s energy efficiency. By the end of the year, Raiffeisen had provided a total of €739 million in new green mortgages and unsecured green and social retail loans – nearly 60% up on 2022.
Raiffeisen stood out, delivering strong growth across multiple markets and offering solid support to SME clients in key areas such as financing, digital solutions and sustainability
Vera Economou, environmental, social and governance competence centre lead at RBI Sustainable Finance in Vienna, says that across CEE markets the awareness of the importance of sustainability among SMEs is rising, and being driven by a number of factors, not least the power to help sustain and grow commercial activity with larger companies.
She gives the example of a family-owned construction company in Albania that saw and understood the importance of sustainability in the context of keeping their business running from generation to generation.
“An important aspect of that is that they want to stay in the supply chain of large multinational corporates, which means having to produce a CSRD [EU Corporate Sustainability Reporting Directive] report and calculating their CO2 emissions. These companies are increasingly willing to do what is needed to be more sustainable.
“What I see in the mindset of CEE companies is no different to western companies,” she adds.
