Expanding to the CEE region – rougher than expected?

"Some customers who want to expand into the CEE region underestimate the different market practices and the availability of financial solutions compared to their home market," says Stefan Gaida, Head of Supply Chain Finance at RBI. Depending on the complexity of the supply chain, the company is quickly confronted with an increased need for working capital. 

“Financial risks such as exchange and interest rates can lead to significantly higher financing costs,” adds Sanja Bruckner, Head of Capital Markets Corporate Sales. She also highlights that RBI aims for clients to easily access hedging products, including currency exchange and customized derivative solutions throughout the Group. “Proactively managing financial risks and establishing a stable cost structure for future financing is crucial for smooth operation in a new market environment,” explains Sanja Bruckner.

In addition, there are often unexpected regulatory or legal hurdles, which RBI clearly addresses with local teams of specialists in the respective target markets. Susanne Prager, Head of Cash Management: "We sometimes observe that customers are surprised at how complicated opening accounts for non-resident companies in CEE can be. Customers appreciate the fact that we develop workaround solutions on an individual basis, for example with an account structure at RBI for cash pooling for non-resident companies”.  

Even though RBI supports standardized international payment transaction formats based on the ISO standard, there are more country-specific features to consider. "Customers are happy that our experts can explain the background in detail and provide support during implementation. In Cash Management, for example, we have introduced a centralized onboarding team that assigns a dedicated person to customers to ensure smooth and efficient onboarding across the entire RBI network. This includes account openings, file testing and technical implementations – all with full support from RBI's Cash Management team."  

There are also some special features in the CEE area when it comes to factoring. "For example, transferring ownership over the offered receivables may require different actions in different countries," says Stefan Gaida, citing an example from daily practice. Also factoring solutions across different countries with multiple jurisdictions and different currencies can become very challenging. "This is where the long-lasting expertise of RBI Vienna in cooperation with the local expertise of the Raiffeisen network banks is very valuable, as our specialists have a deep understanding of the regulatory and legal environment, the financial infrastructure and the market conditions in their local market."

"As part of GPS (Group Prime Services), we cover the entire value chain of securities services – from execution to custody and depository bank services," explains Bettina Janoschek, Executive Director, Head of Prime Services Sales & Market Intelligence. When investing in the CEE region, challenges may arise from the fragmented landscape of its capital markets. Although often seen as one region and with many countries being part of the EU, markets are very diverse, with rather small local capital markets, each of them with their specific market infrastructure and regulations.

"Together with our colleagues in the network banks, we act as a bridge from West to East for clients – both institutional and corporate – interested in investing in CEE." One central set of legal documents and a single entry point to place orders or instructions related to securities transactions ensure the necessary speed to market and operational efficiency. "In the event of market-specific questions or important market developments, RBI's central GPS team is always supported by the local experts at the network banks. In this way, customers benefit from both: efficiency and convenience paired with local market knowledge and capabilities,” says Bettina Janoschek.

Despite all the expertise and financial details, expanding into new markets is always about people, relationships, and trust. As a relationship bank, this is RBI’s specialty, and our relationship managers are familiar with all the cultural differences that can affect the behavior and business practices of suppliers and customers. Working with network banks promotes trust and credibility in the new market, which facilitates smoother business operations and expansion. Last but not least, network banks also provide access to local business networks, potential partnerships and valuable market information that support the company's growth and sustainability