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66 Opinion
bne December 2020
that it does not prove wholly counter-productive – there ought to be a strong Hippocratic commitment to “first, do no harm.” Obama’s re-set was predicated on the possibility of building up the supposed liberal Medvedev but actually contributed to ensuring that Putin felt there was no alternative to his return to the presidency.
Meanwhile in Moscow...
Likewise, the risk is that if such policy proposals and overall stance look likely to be adopted by the Biden administration – even if, like most grand strategies, they end up diluted, delayed and diverted by bureaucratic inertia and the pace of events – they will condition Moscow’s response.
At present, there seems to be an interesting attempt to signal the need for a less confrontational foreign policy in Moscow. Those three ubiquitous bellwethers of the Russian foreign policy elite, Dmitri Trenin, Fedor Lukyanov and Andrei Kortunov, have all made their own contributions.
Trenin recently commented that “Russia is learning to mind its limitations; to repel residual nostalgia; and to think straight, putting issues before personalities, and staying focused on its own interests, leaving the empire farther and farther behind.”
To Lukyanov, “Russian foreign policy at the new stage should
CEE BANKING SECTORS:
In crisis and recovery mode at the same time
Gunter Deuber of Raiffeisen Research in Vienna
There is positive news for all Central and Eastern Europe (CEE) commercial bankers, market observers and investment bankers. The fresh 2020 CEE Banking Report by Raiffeisen Research, an important source of opinion and information, has arrived and will be published today. And much more important is, of course, that the business prospects in the short term are not as bad as expected.
This crisis is unique. But that means the medium-term consequences of this crisis are probably unique as well.
A strong starting position helps
CEE banking markets enter the coronavirus (COVID-19) crisis on a solid footing, having reached record profitability
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become much more selfish and much less emotional” such that “the main issue for the next period is risk minimisation.”
As for Kortunov, he warned that, rather than committing itself to “war to the bitter end”, the Kremlin ought to contemplate
a “a new Brest-Litovsk Peace.” Evoking the controversial treaty that got Bolshevik Russia out of the First World War but at terrible territorial cost, brought Kortunov under the guns of the ultra-nationalist Orthodox Katehon think-tank as “speaking on behalf of the liberal sixth column.” Nonetheless, this is not likely to have been an analogy he used thoughtlessly or lightly.
It is not that these figures, all “hybrid scholars” with both independence and close official connections, are signalling the onset of a kinder, gentler Russian foreign policy. Rather,
it seems likely that they see a potential window of opportunity, a moment in which they can advocate for a less confrontational and ideological one in the wake of Biden’s victory.
In an ironic mirror-imaging, these are the Russian counterparts – in their own very different ways – to the “realists” behind the first Politico letter, and if America’s hawks gain the ascendant in the new presidency, or even just seem likely to, then their Russian counterparts will reassert their control of Kremlin thinking. This is, after all, a crossroads moment in Moscow, as well as Washington.
Russian banks have been earning a ROE of 18% this year – the highest level in almost a decade
in nominal terms in 2019, with an average Return on Equity in CEE at 15%. We estimate the 2019 CEE banking profit pool at €47bn, thereof €13.6bn in Central European (CE) and Southeastern European (SEE) banking markets and €34bn accumulated in Eastern European markets (Russia, Ukraine, Belarus).
Non-performing loan (NLP) ratios reach multi-year lows in CE/SEE year-end 2019. The NPL ratio in CE reached a value
of just under 5% at the end of 2019, in the CE-3 markets (Hungary, Slovakia, Czech Republic) even a remarkable 2.5%. In the SEE region, the NPL ratio was 5.9% at the end of 2019. This means that this ratio reached values close to the levels seen prior to the 2008/2009 Global Financial Crisis.