September Highlights. Ukraine: Key economic figures and forecasts

Transcription

1 September 216 GDP growth and inflation Highlights GDP (% yoy) Inflation (eop, % yoy), r.h.s. On 14 September, after more than one year of postponements, three technical missions, and one change in government later, Ukraine finally put the IMF's Extended Fund Facility (EFF) programme back on track and received a third IMF tranche of USD 1 bn. With the experience of huge delays and given quite challenging structural benchmarks, we are sceptical if Ukrainian will receive the next tranches in November this year and February next year on time. The State Statistics Service of Ukraine minimally increased its preliminary estimate of Q2 GDP growth to 1.4% yoy from 1.3% yoy. Seasonally adjusted data remained at a level of +.6% qoq, i.e. showed a surprisingly good performance after a contraction in Q1. Nevertheless, we decided to slightly adjust our GDP forecast down by.pp to +1% yoy, while we kept the growth projection for 217 unchanged at a level of +2% yoy. Industrial output dynamics improved again in August given progress in manufacturing and energy sectors. The growth of retail sales picked up to.2% yoy in August from 4.% yoy in July. Against the backdrop of a low-lying statistical base, consumer price inflation accelerated to 8.4% yoy in August from 7.9% yoy. Ukraine: Sovereign ratings LCY rating S&P Moody's Fitch FCY rating Long-term B- Caa3 CCC Short-term B n.a. n.a. Outlook Stable Stable n.a. Long-term B- Caa3 CCC Short-term B n.a. C Outlook Stable Stable n.a. Latest assessment Oct-1 Nov-1 Jul-16 Source: Thomson Reuters, RBI/Raiffeisen RESEARCH Financial Analysts Sergii Drobot, Raiffeisen Bank Aval, Kyiv Ukraine Economist sergii.drobot@aval.ua Andreas Schwabe, CFA, RBI Vienna Senior Economist CEE andreas.schwabe@rbinternational.com The approval of the third IMF tranche brought confidence to the FX market, at least temporary. The National Bank continues to ease monetary policy and liberalize the FX market. As expected, the key policy rate was cut by another bp to 1%. Ukraine: Key economic figures and forecasts Real Sector e 217f GDP (UAH bn) 1,4 1,46 1,87 1,98 2,36 2,624 GDP (% yoy) Domestic demand (% yoy) Terms of trade (% yoy) CPI (avg, % yoy) CPI (eop, % yoy) PPI (eop, % yoy) Real disposable income (% yoy) n/a n/a External Sector C/A Balance (% of GDP) Goods export (% yoy) Goods import (% yoy) FDI (USD bn) Total external debt (% of GDP) Gross FX reserves (USD bn) Fiscal Sector Fiscal balance (% of GDP) Public debt (% of GDP) Source: State Statistics Service, National Bank of Ukraine, Ministry of Finance, RBI/Raiffeisen RESEARCH 1

2 Mar-1 Jun-1 Sep-1 Dec-1 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Ukraine Proposed Schedule of Tranches (USD bn) Program Financing (USD bn) Debt operation,7 3, 4,4 2 Other bilateral,4,,2 US 1 1 EU,9,9,7 Multilteral 1,8 -,3 IMF 6, 2,3,4 2,9 IMF: GDP and Inflation Forecast 4 43, , -6 8, -8 6, 6,,, Real GDP (% yoy) Inflation (eop, % yoy), r.h.s. Economic policy On 14 September, after more than one year of postponements, three technical missions, and a change in government, Ukraine finally put the IMF's Extended Fund Facility (EFF) programme back on track and received a third IMF tranche of USD 1 bn. Right after the finalization of the second programme review by the Fund's Executive Board, the third tranche replenished foreign reserves by about USD 1 bn. However, this amount was less than initially expected as the instalment has been cut from USD 1.7 bn likely due to late/failed fulfilment of all commitments (and to spare money for future tranches). The total value of the programme remained unchanged at USD 17. bn, but the payment schedule has been modified, decreasing the next tranche to USD 1.3 bn (planned for November 216), but increasing the size of the tranche afterwards to USD 2 bn (envisaged for February 217). Generally, the Fund praised certain progress in reforms and economic stabilization while noting that additional efforts should still be made in several areas. Specifically, reforming the pension and tax systems as well as combatting corruption. On 3 October the Review, the Letter of Intent and the new Memorandum have been published (a leaked version has been available since mid-september), and we briefly analyse the documents (we actually analysed the leaked versions, but did not find differences compared to the officially published ones). Ukraine authorities fulfilled all, but three performance criteria established in the previous memorandum mid-21. The NBU failed to meet the target for net FX reserves, the government defaulted on the bond held by Russia (not observing the criteria of non-accumulation of external payment arrears), and FX market restrictions were continued. Moreover, only six out of eleven structural benchmarks were met. Ukraine authorities did not strengthen the corporate insolvency regime so far (reset benchmark from Mar 216 to September 216), neither did they conduct a pension reform (revised and reset from Dec 21 to Dec 216), nor did they strengthen the provisions on the order of bank transactions (reset form Dec 21 to Sep 216). In addition, a specialised anticorruption prosecution function has been established only recently (now fulfilled as prior action, initially demanded for Sep 21). According to the new memorandum, the IMF states that "the worst of economic storm seems to be over", and economic stabilization is taking hold. The IMF downgraded its GDP forecast by.pp to 1.% yoy for 216, and expects that the economic growth will amount to 2.% next year, reaching 4% yoy by 22 (we are slightly more conservative expecting 1.% in 216, 2.% in 217, and pencilling in 3.% yoy potential growth). Inflation is projected to reach 13% yoy by end-216 with a gradual slow down to % by 22. Unlike the previous memorandum, there is no explicit projection for the exchange rate. However, "it is expected that a relatively contained current account deficit and the resumption of capital inflow would support a small real exchange appreciation over the medium term". With a projected decrease in inflation rate, this would implicate also a relatively stable or only slowly depreciating nominal exchange rate. The IMF sees the state budget 216 broadly in line with the programme, as the budget deficit moves towards the targeted 3.7% of GDP. Nevertheless, in order to meet IMF programme parameters, the reform of the tax system, which started in 21, has to be continued. The IMF s 2

3 Ukraine IMF Forecast highly prioritized issue is a reform of the pension system that has been postponed since end-december 21. The reduction in social security contributions (aimed to improve the business climate) almost doubled the structural deficit of the pension system. A very low retirement age and a complicated system of special pensions (compared to international standards) make the situation even more difficult. Thus, "to set the pension fund on a stronger footing, and to create space for gradually increasing pensions to more socially acceptable levels over time", a broader parametric reform is needed. The prior action that should be done by end-216 is to reduce the number of people eligible for early retirement. Also, the IMF demands the quality of the government in general, and tax administration in particular to be improved while asking for downsizing the government. Reforms within the energy sector are seen by the IMF partially ahead of schedule. Taking advantage of lower cost of gas imports from abroad, the Ukrainian government increased tariffs to full cost recovery levels one year earlier than initially planned. This helped to radically decrease the deficit of the stated owned energy company Naftogaz. The next step is the development of a quarterly tariff adjustment mechanism with the prospect of full market liberalization (no later than 1 April 217). Meanwhile, the reform of Naftogaz itself has been set to continue, and is aimed to improve the company s governance and increase transparency. On a positive note, the IMF sees the flexible exchange rate regime enabling economic adjustment while the National Bank of Ukraine (NBU) gradually replenishing its international reserves. The Ministry of Finance, in its turn, supports the build-up of reserves by rolling over of the maturing domestic FX bonds. According to the IMF, the started FX market liberalization should continue, but the pace will depend on economic development and financial stability. It is important to support the disinflation trend and reserve accumulation. Banks Recapitalization Plan The financial sector is seen gradually recovering. The number of operating banks has been reduced by about 8 to just around 1 due to problems with liquidity, excessive exposure to related parties and insolvency. The NBU completed two waves of diagnostics. The first round covered 2 largest banks "those that needed additional capital have since brought their capital to at least zero [from negative levels] according to the June 216 NBU provisioning requirement". The next round of diagnostics touched another 19 banks "12 of these banks needed additional capital". Thus, the goal for the banks now is to meet the capital requirements within the prescribed period. Furthermore, mentioned related party exposure should be reduced. The regulator, from its side, will encourage banks to recover loan activity (by improving legislation), and will enhance supervision. Both nationalization and privatization is mentioned. In case a bank is nationalized, the Ministry of Finance will hire a well-known international firm to run the bank with a commercial business perspective. Moreover, international best practice will be followed, and all legal means pursued to ensure that the State secures from former owners the recovery of all the loans related to them in a timely manner. The state-owned banks should follow commercial principles whereas their privatization is also possible. According to the IMF, the results of structural reforms are still mixed. Despite the establishment of the National Anticorruption Bureau (NABU), the high level of corruption persists, which is seen as a major factor restraining foreign investments. Thus, the next goal for Ukrainian authorities is to strengthen the NABU to enhance its investigating power and to create an anticorruption court. By end-october 216, high-level officials have to declare their assets and incomes via the recently established (with large obstacles) 3

4 2Q212 3Q212 4Q212 1Q213 2Q213 3Q213 4Q213 1Q214 2Q214 3Q214 4Q214 1Q21 2Q21 3Q21 4Q21 1Q216 2Q216 Ukraine electronic declaration system that should increase transparency. As for deregulation, the IMF s experts also believe that the new legislation on agricultural land sales could generate significant economic gains for Ukraine. Meanwhile, there has been little progress in reforming the stateowned enterprises (SOE). There are over 3, SOEs in Ukraine (or around 1% of GDP), but due to "weak governance and ownership structures, there is limited information regarding the operating and financial state of these companies". Thus, in the nearest future (by end-october), they have to be classified to one of three categories for privatization, for liquidation, or continued state ownership. Moreover, a single national holding company should be created. SB: Structural Benchmark; PA: Prior Action GDP dynamics GDP growth (% yoy) Contributions to GDP growth, p.p GDP growth (% qoq, s.a.) 2Q1 3Q1 4Q1 1Q16 2Q16 Net exports Inventories GFCF Government Households GDP (% yoy) Despite the significant progress in some areas, the risks are seen to remain high, both domestic and external. Domestically, the risk of political instability persists. Specifically, the Fund notes the possibility of an early election, policy reversal, and slow programme implementation while the deep decline and slow growth in living standards, and high corruption could cause a loss of public confidence in the reform programme. Moreover, protracted and volatile development of banking sector may lead to financial instability. Finally, the risk of escalation of the military conflict in the east of Ukraine is still present. On the external side, risks mentioned by the IMF are the weakening of the terms of trade, slow global recovery, and volatile commodity prices. With the experience of huge delays in the pay-out of a third tranche and given quite challenging structural benchmarks (e.g. land and pension reforms), we are sceptical if Ukrainian authorities will manage to perform the steps in the requested fields on time. Thus, the next tranche of planned USD 1.3 bn may well be released after the envisaged date of November 216. In general, though, even with the delays in the fulfilment of conditions and accordingly tranche disbursements, we see a further continuation of the IMF programme as a more likely scenario than its termination also given the (geo)political backdrop. Real Sector The State Statistics Service of Ukraine minimally increased its preliminary estimate of Q2 GDP growth to 1.4% yoy from 1.3% yoy. Seasonally adjusted data remained at a level of +.6% qoq, i.e. showed a surprisingly good performance after a contraction in Q1. Agriculture increased by.6% yoy, which is a reflection of a good harvest this year. Construction and trade were the strongest performing sectors in Q1 growing by 14.9% yoy (2.1% qoq) and by 7.1% yoy (1.3% qoq) respectively against the backdrop of falling inflation and economic stabilization. Besides public administration and defence demonstrated notable growth by.% yoy (1.8% qoq), also caused by the still ongoing conflict in Donbass. As expected, due to the increase in VAT revenue, product taxes went up by 3.9% yoy. At the same time, the decline of subsidies amounted to 4.4% yoy. These both components were supportive for growth. The financial sector is still a negative outlier showing a reduction by 24.6% yoy (-2.7% qoq) which is not surprising given the decline in revenues (mainly interest and from foreign currency trading) and still significant provisioning. On the expenditures side, final consumption increased by.6% qoq or by 2.3% yoy. On the back of growing real wage (by 6.1% yoy in H1 216), household consumption increased by 4.3% yoy (1.1% qoq). 4

5 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-1 Apr-1 Jul-1 Oct-1 Jan-16 Apr-16 Jul-16 Ukraine Contributions to GDP growth, p.p Q1 3Q1 4Q1 1Q16 2Q16 Other Taxes to products Real estate Finance Transport Trade Construction Manufacturing Mining Agriculture GDP (% yoy) Industrial output growth by sector (% yoy) Industrial production Mining Manufacuring (all) Utilities of manufacturing: Food Light industry Woodwork and paper Coke, refined products Chemical Pharmaceutical products Rubber, plastic and mineral Metallurgy Machine building -3,6-17,4-2,4-22,4-16,7-19, -19,9-14,2-11,3-7,3-13, -1,4-1,6 -,4, 2,,9 3,3,6 1,7,7 1,6,6 8,1 8, 13, Jan-Aug 21 to Jan-Aug 214 Jan-Aug 216 to Jan-Aug 21 Inflation (% yoy) CPI Food prices PPI Moreover, there was a recovery in investment activity the growth of gross fixed capital formation accelerated from 4.2% yoy in Q1 to 17.6% yoy (+9% qoq) in Q2. However, the dynamics of foreign trade deteriorated in Apr-Jun. The decline in exports deepened from 3.8% tot to 6.% yoy (-3.% qoq) due to deterioration of trade relations with Russia and difficulties with the transit of Ukrainian good through Russian territory. Despite the fact that the decline in imports shrank from -7.2% yoy to -.1% yoy, we saw the fall of imports by.% qoq in seasonally adjusted terms (partially this could be attributed to the strengthening of the national currency in Q2). Taking into account the still modest growth rates of GDP, and other key indicators, we decided to slightly adjust our GDP forecast down by.pp to +1% yoy, while we kept the growth projection for 217 unchanged at a level of +2% yoy. Industrial output dynamics improved again in August given progress in manufacturing and energy sectors. Industrial production went up by 3.4% yoy. However, in seasonally adjusted terms, the output still shrank by estimated 1% mom. The mining industry posted a decline by 1.7% yoy on the backdrop of rising tensions in Donbass. Metal ores mining and oil/gas extraction dropped by 9.1% yoy and by 3.1% yoy respectively. By contrast, coal mining increased by 12.6% yoy. Growth in manufacturing improved from -1.% yoy in July to +.% in August due to the recovery of most sectors. Expanding electricity production resulted in the rise of energy sector output by 4.9% yoy. Overall, growth of industrial production accelerated from 1.7% yoy in Jan-Jul to 2% yoy in Jan-Aug (vs % yoy in Jan-Aug 21). The growth of retail sales picked up to.2% yoy in August from 4.% yoy in July. Moreover, the seasonally adjusted index increased for the third month in a row, according to our estimates. Thus, the retail sales index recovered from a setback observed in May, in cumulative terms from Jan-Aug, the growth of retail sales amounted to 3.8% yoy for companies, and 3.1% for companies and natural persons active in retail trade. Inflation Against the backdrop of a low-lying statistical base, consumer price inflation accelerated to 8.4% yoy in August from 7.9% yoy. However, on a month-to-month basis, prices are slightly falling for the third month in a row (-.2% mom in June, -.1% mom in July and -.3% mom in August). This development can be mainly attributed to seasonality. A higher supply of fruits and vegetables resulted in the decline of prices for these goods by 1.6% mom and.1% mom respectively. As a result, aggregated food prices fell by 1% mom in August. Prices for alcohol and tobacco jumped by 2.4% mom mainly due to higher tobacco prices by 3.6% mom. Stability in the FX market in the previous months as well as seasonality effects led to lower clothing prices by 3.3% mom in August. Communal payments rose by.7% mom on the back of growth of communal tariffs for sewers (by 1.3%) and water supply (by 8.7%). Oil prices marginally increased by.2% mom. Given the current price dynamics and the fact that the effect from the increase in tariffs was much weaker than we expected (or at least reflected so in the official statistics), we are improving (lowering) our inflation forecast to 11% from 14% yoy for year end-216. Producer prices grew by.2% mom in August, while on an annualized basis, the growth accelerated from 18.3% yoy in July

6 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-1 Apr-1 Jun-1 Aug-1 Oct-1 Dec-1 Feb-16 Apr-16 Jun-16 Aug-16 Ukraine FX market USD mn 1 Goods' export and import growth rates (% yoy) Source: National Bank of Ukraine, RBI/Raiffeisen RESEARCH Export (% yoy) Source: National Bank of Ukraine, RBI/Raiffeisen RESEARCH UAH exchange rate NBU interventions/auctions USD/UAH Import (% yoy) EUR/UAH USD bn 19, 17, 16, 14, 13, 11, 1, 8, 7,, Gross FX reserves, r.h.s. to 18.9% yoy in August. The rise of iron ore prices at the global commodity market triggered the increase of prices in metal ores mining by 6% mom. As a result, prices in the mining industry went up by 1.8% mom. Prices in the energy sector hiked by 2% mom against the background of an increase in electricity costs by 2.2%. By contrast, in manufacturing prices fell by.7% mom in August, mainly due to the decline in prices in coke and refined petroleum production. Balance of Payments The current Account (C/A) surplus shown during the last three months gave the way to a deficit of USD 34 mn in July. Such dynamics attributed to a deepening decline of goods export in combination with growth of imports. Exports decline accelerated from 8.3% yoy in June to 1.1% yoy in July. In value terms, merchandise exports remained at the level of the previous month, but due to a strong base effect, the decline deepened. On the back of deterioration of trade relations with Russia, food exports dropped by 1.2% yoy in July, while we observed growth in the previous month. Moreover, the decline of metallurgical exports accelerated from 11.1% yoy to 14.6% yoy. For the first time in recent years, import dynamics returned to a positive territory. The abolition of an additional import duty boosted food imports by.2% yoy. Amid growing purchases of energy resources from abroad in anticipation of the heating season, the decline of mineral products imports slowed down to 27.9% yoy in July from 46.9% yoy in June. Machinery imports hiked by 31.8% yoy. The financial account recorded a surplus of USD 447 mn. As before, the primary drivers of growth were FDI (USD 291 mn inflow), traditionally directed to the banking sector to recapitalise banks, and the reduction of foreign currency outside the banking sector (by USD 61 mn) as USD (savings) are converted to UAH. Furthermore, the net growth of foreign loans amounted to USD 177 mn. On the other hand, due to the reduction of external liabilities, the external position of the banking system with regard to portfolio and other investment flows shrank by USD 18 mn. In July, the overall balance of payments recorded a surplus of USD 11 mn. In Jan-Jul, C/A posted a deficit of USD 38 mn (deficit of USD 77 mn in Jan-Jul 21). Goods export fell by 11.6% yoy, while imports declined by only 7.4% yoy. The financial account surplus was at a level of USD 1 bn. Thus, the overall BoP (excluding changes in FX reserves) recorded an excess of USD 16 mn according to results of the first seven months of the year. Monetary Policy and Exchange Rate The approval of the third IMF tranche brought confidence to the FX market, at least temporary. Thus, in mid-september, the UAH strengthened to the level of about 2.7 UAH per USD. Nevertheless, oscillations returned to the market soon, and currently phases of depreciation alter with ones of appreciation. From time to time, the National Bank intervenes in the market attempting to mitigate these fluctuations. This resulted in USD mn sold in September (major part in first half of the month) versus USD 47.9 mn of FX bought by the regulator. Traditionally, agricultural exports support the exchange rate in Sep-Oct, while the approaching winter is usually a negative factor for the UAH. In our view, the UAH could depreciate towards the level of USD/UAH 29 by year-end 216. Source: Bloomberg, RBI/Raiffeisen RESEARCH 6

7 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-1 Apr-1 Jul-1 Oct-1 Jan-16 Apr-16 Jul-16 Ukraine Balance of Payments Real interest rate Source: National Bank of Ukraine, RBI/Raiffeisen RESEARCH Money Market UAH bn 7 2 USD bn Aug-16 Current Account Capital Account Source: National Bank of Ukraine, RBI/Raiffeisen RESEARCH Real interest rate (current inflation), % Inflation, % yoy Key policy rate, % CDs Outstanding amounts held on banks' correspondent accounts Index of Interbank Rates (o/n), r.h.s. Sep-16 Financial Account Balance of Payments 17% 16% 1% 14% 13% 12% 11% The increase in international reserves in August was only minor. Due to the hike of pressure at the FX market and significant debt payments, the National Bank managed to replenish reserves by less than USD 1 mn to USD 14.1 bn. Issuance of FCY bond by the government replenished reserves by USD mn. However, debt payments amounted to USD 39.8 mn, while net FX sales at interventions added up to USD 13.4 mn. For September, given the IMF tranche of USD 1 bn and the issuance of an US-guarantee bond of USD 1 bn, we expect FX reserves to approach an amount of USD 1. bn, while by end-216 the figure may reach USD 16 bn (in case of arrival of the EU tranche equal EUR 6 mn). The National Bank continues to ease monetary policy and liberalize the FX market. First, as was expected by the market, the key policy rate was cut by another bp to 1%. We do not expect further reductions this year, but do not completely rule out the possibility of another cut in case of a strong currency, which is though not our base case scenario. Also, some administrative controls have been eased in September. Specifically, the daily limit for FCY cash withdrawals has been increased from UAH 1, to UAH 2, (i.e. almost USD 1,). In addition, the National Bank has allowed domestic companies to buy foreign currency to repay loans from foreign investors even if they have more than USD 2, on their FCY account. Without support of LCY injections via FX auctions, the liquidity level in the banking system kept falling gradually. Thus, it decreased by about UAH 4- bn to UAH 7 bn in September. Balances on correspondent accounts amounted to about UAH 41 bn by end-september, while funds invested into CDs were equal to UAH 34 bn. Surprisingly, but despite the key rate cut, the money market rates remained at the previous month level, probably due to decline of liquidity. The index of interbank rates (overnight) was at a level of % at end-september. Banking Sector In August, deposits in foreign currency (FCY) increased, whereas local currency (LCY) deposits fell. These dynamics correspond to the increasing demand at the FX market. Household (PI) UAH deposit portfolio went up by.6% mom, while corporate (CO) deposits hiked by 1.7% mom. PI and CO FCY deposit portfolios shrank by 1.8% mom, and by 2.6% mom respectively. Recovery of UAH lending was observed in August on the back of growing business activity. CO and PI LCY loans went up by.8% mom, and by 1.1% mom respectively. FCY portfolios shrank by 2.7% mom (CO), and by 1.3% mom (PI). The capitalisation of the banking system continues to grow. The regulatory capital adequacy increased from 13.84% in July to 13.9% in August. According to the NBU official, five banks (out of top-2) have fully completed the capitalization programme; another five banks completed the programme ahead of the schedule, and four banks are currently under approval of their programmes. On the back of interest income growth (due to restructuring of loan portfolios), the banking sector made a profit of UAH 2.7 bn in August. As a result, in Jan-Aug, the banks losses decreased almost sevenfold compared to the same period of 21 (UAH 4 bn). Source: National Bank of Ukraine, RBI/Raiffeisen RESEARCH 7

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10 Ukraine Acknowledgements This report was prepared by Raiffeisen Bank Aval on 4 October 216 Raiffeisen Bank Aval 9, Leskova Str., 111 Kyiv, Ukraine Tel Fax Call center: 8 (free within Ukraine) Market Analysis Sergii Drobot ( ) Treasury Head: Vladimir Kravchenko ( ) FX, MM: Yuriy Grinenko ( ), Olexandr Varenytsia ( ), Nikolay Vysotsky ( ) Treasury Sales: Marina Lukashenko ( ), Alexander Korenev ( ), Tatiana Kornienko ( ) Securities: Oleg Klimas ( ), Alexey Evdokimov ( ), Daria Shatskykh ( ) Multinational Corporate Customers Head: Andreas Kettlgruber ( ) Relationship Managers: Anna Prydybailo ( ), Lesia Byba ( ) Raiffeisen Bank International CEE Research Team GLOBAL HEAD OF RESEARCH, RBI Peter Brezinschek (117) HEAD OF ECONOMICS / FIXED INCOME /FX RESEARCH, RBI VIENNA Gunter Deuber (Head, 77) CEE ECONOMICS / FIXED INCOME /FX RESEARCH, RBI VIENNA Elena Romanova (Banking sector, 1378) Andreas Schwabe, CFA (Economist, 1389) Martin Stelzeneder, CEFA (Economist, 1614) Wolfgang Ernst, CEFA (FX Strategist, 1) Stephan Imre (FI Strategist, LCY, 677) Gintaras Shlizyhus (FI Strategist, FCY, 1343) CEE CREDIT COMPANY RESEARCH, RBI VIENNA Jörg Bayer (Head, 199) Martin Kutny, CFA (Corporates, 213) RBI contacts: (+ extension); [name].[surname]@rbinternational.com RBI NETWORK BANK CEE RESEARCH CENTRAL EUROPE (CE) CZ: Helena Horska ( ), Raiffeisenbank a.s., Prague HU: Zoltán Török ( ), Raiffeisen Bank Zrt., Budapest PL: Marta Petka-Zagajewska ( ), Raiffeisen Polbank, Warsaw SK: Robert Prega ( ), Tatra banka, a.s., Bratislava SOUTH EAST EUROPE (SEE) AL: Joan Canaj ( ), Raiffeisen Bank Sh.a., Tirana BA: Ivona Zametica; ( ), Raiffeisen BANK d.d., Sarajevo BG: Emil Kalchev ( ), Raiffeisenbank (Bulgaria) Sole-owned JSC, Sofia HR: Zrinka Zivkovic-Matijevic ( ), Raiffeisenbank Austria d.d., Zagreb RO: Ionut Dumitro ( ), Raiffeisen Bank S.A., Bucharest RS: Ljiljana Grubic ( ), Raiffeisenbank a.d., Belgrade EASTERN EUROPE (EE) BY: Oleg Leontiev ( ), Priorbank JSC, Minsk RU: Anastasia Baykova ( ), AO Raiffeisenbank Austria, Moscow UA: Sergii Drobot ( ), Raiffeisen Bank Aval, Kyiv COMPANY EQUITY RESEARCH: RAIFFEISEN CENTROBANK AG, VIENNA Stefan Maxian, CFA (Head, ) 1