Emerging Europe

Macroeconomic disruptions and regulatory scrutiny will drive market participants to adopt a practical environmental, social and governance strategy in the year ahead – one that is less about narrative and more about materiality.

The country has one of the world’s best-performing economies with one of the few emerging market currencies to be appreciating against the dollar. It also has large numbers of highly skilled Russians fleeing across the border to avoid conscription. National Bank of Georgia governor Koba Gvenetadze speaks to Euromoney.

NatWest digital SME bank Mettle has broken new ground in its partnership with Polish fintech firm Vodeno.

Societe Generale has exited, and Citi is winding down in retail, but the two biggest remaining Western European players in Russia are also spending a lot of time working out their exposures and operations in the country.

Societe Generale’s choice of Slawomir Krupa to succeed Frédéric Oudéa suggests an approach of riding out the storm and continuing elements of Oudéa’s recent strategy, rather than any radical change.

A new job running Bayern Munich's finances could be more rewarding for HVB CEO Michael Diederich, especially after UniCredit CEO Andrea Orcel’s push for more cuts in Germany.

Fossil fuel assets were set to become obsolete in the transition to net zero. But the war in Ukraine is forcing European governments to secure alternative energy sources and driving demand for coal, oil and gas back in the wrong direction. With the global energy transition seemingly pitched against national energy security agendas, banks are trying to navigate a difficult path through the turmoil.

When Margeir Pétursson bought Bank Lviv in 2006, he had much to learn about operating a bank in a country permanently in Russia’s crosshairs. Talking to Euromoney six months after the invasion, he says there is opportunity among the chaos in this key Ukrainian city.

PrivatBank chief executive Gerhard Boesch looks to the future and the bank’s war-delayed privatization.

Oleksandr Pysaruk, chief executive of Raiffeisen Bank Ukraine, describes how contingency planning for war rapidly morphed into the real thing.

Despite the Russian bombs pounding Ukraine, there have been no wartime bank runs, no bank collapses or even the suggestion of a systemic wobble. That is largely thanks to the work of former National Bank of Ukraine governor Valeria Gontareva. She tells Euromoney that the time for further reform to the stricken country’s banking sector is now.

China has in the past felt compelled to accept the terms of IMF programmes in struggling nations without due consideration of its own views.

The pandemic and the war in Ukraine have brutally exposed the fragility of global supply chains.

India’s refusal to take a side over Russia’s invasion of Ukraine is typical of a geopolitical approach that aims to keep everyone onside – to India’s advantage. Doing so helps the country to keep inflation in check, the one threat to an exceptionally powerful domestic story that is enticing the banking sector.

Ukraine’s recent debt restructuring agreements with international bondholders give it a better prospect of returning to market once its war with Russia ends. But the IMF – more used to pulling countries out of purely economic crises – faces a policy challenge in assisting a country at war.

In what was supposed to be a banner year for Poland’s banks, free universal mortgage holidays are set to halve profits in the sector in 2022. Many fear the government will extend the policy as elections approach in 2023. Are Poland’s attacks on mortgage interest margins in the name of fighting Russia-fuelled inflation a sign of things to come elsewhere?

With Turkey maintaining its ties with Russia, the risk of secondary sanctions against Turkish banks rises. But even if such sanctions are targeted, the central bank’s policies are already risking a deeper crisis.

If Russia stops the gas this winter, the damage to European banks will be worse than Covid, and Germany will be at the centre of the storm.

China’s support for Russia is part of its strategy to reduce the world’s dependence on the greenback – might it work?

The idea of capping the price of Russian oil and gas exports sounds good in theory, but it might be better to test methods for energy rationing.

The currency’s fairly benign passage through the early months of 2022 is now under threat from a variety of factors, including spiralling inflation, the cost of supporting the currency and even a growing interest in cryptocurrency.

Kyrylo Shevchenko, governor of the National Bank of Ukraine, has been corresponding with Euromoney as war rages in his country. Here he tells us how the central bank has kept the banking system operational and protected the currency in extraordinary circumstances.

SocGen’s deal to sell Russian lender Rosbank back to Vladimir Potanin’s Interros Capital is painful, but could help it to move on from the war in Ukraine.

Without Russia, Raiffeisen will be a different entity – one focused on safer countries in the former Habsburg heartlands. The low home-market profitability that Russia once served to mitigate, however, will be more evident than ever.

A number of commodity currencies have received an unexpected boost from the conflict in Ukraine as Western economies look to reduce their dependence on fossil fuels from Russia more rapidly than previously planned.

A combination of geographical position and commodity strength is working in the country’s favour.

The financial frontline of Russia’s war in Ukraine runs through the offices of overworked sanctions officers at banks everywhere. It is their job to freeze the accounts and assets of sanctioned oligarchs. The pressure is colossal: get it wrong or act too slow, and the impact on a bank’s brand and bottom line will be felt for years to come.

The war in Ukraine has further highlighted the benefits of Banco Santander’s diversification across Europe and the Americas, according to executive chairman Ana Botín. However, its European home market may be a big disadvantage in Citi’s looming auction of Mexican lender Banamex.

ESG has been an intense focus for banks in recent years – not least for their communications teams. But with war in Ukraine, ESG has hit its first real test – and the talking has stopped.

Margin hikes are raising the table stakes in markets from commodities to stock loans. Margins may be a better risk signal than curiously subdued measures like the ViX index of equity volatility.