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East meets East

(Article published in the Sept 20, 2006 issue of Manila Standard Today)  

Tomorrow (21 Sept. 2006), at the Manila Polo Club, at just about the time the lights of Manila turn up and the sun rises in the other side of the globe, Philippine business will meet Dr. Herbert Stepic, CEO of Raiffeisen International Bank-Holding AG and Deputy General Manager of Raiffeisen Zentralbank Österreich AG (RZB).  Dr. Herbert Stepic is expected to make us aware (we, who take it as a given  that it is us who are in the East) of the potentials of conducting business with another East, specifically Central and Eastern Europe. 

 An Austrian born on 31 December 1946, Dr. Stepic conducted all of his formal studies in Vienna. The foundations were dug at Schulbrüder erbertrtStrebersdorf, a grammar school, and the superstructure was laid at the Vienna University of Economics and Business Administration where he received his Master’s degree in 1968 and, after doing military service in 1969 and 1970, his Doctor of Philosophy degree in Economics in 1972.

 He joined Raiffeisen Zentralbank Österreich AG (RZB) the following year and has since been involved in the task of growing the international business of RZB.  In his east of the world, as in ours, responsible positions in trade organizations and honors quickly come in the wake of stellar performance.  Thus, Dr. Herbert Stepic became the President of the Austrian-Arab Chamber of Commerce in 1992 and the Vice-President of the International Chamber of Commerce in 2002.  He has held both posts since then.  Citations were also given to him by the countries of his region recognized the work he has done.  He was made “Offizierskreuz des Verdienstordens” by the Republic of Hungary; awarded “Groβes silbernes Ehrenzeichen” by the Republic of Austria; pinned the medal “For Friendship of Nations” by order of the Russian President Valdimir Putin, the “Golden Medal” for outstanding service by the Slovak Chamber of Commerce, “The Madara Horseman” by the Bulgarian President Georgi Purvanov, and the medal “For Merits” by President Leonid Kuchman of the Republic of Ukraine. 

            Though usually a prophet is not honored in his own country, Dr. Herbert Stepic was named “WU-Manager des Jahres 2005” by the President of his alma mater in 2005 and was awarded “Silbernes Komturkreuz  des Ehrenzeichens für Verdienste um das Land Niederösterreich” by Dr. Erwin Pröll, Governor of the Province of Lower Austria.  And, since no PhD is worth the initials if he is not published, he wrote a “Handbook of Export Finance, Ueberreuter” which has since become standard reading for students of the Vienna Unversity of Economics and Business Adminstration.

 Dr. Herbert Stepic, at the top of Raiffeisen International Bank-Holding AG (Raiffeisen International) and  Raiffeisen Zentralbank Österreich AG (RZB), is the embodiment of the symbiotic relationship, i.e, of both independence and cooperation, between the two organizations.   Together RZB and Raiffeisen International stand among the dominant figures in Central and Eastern European banking and finance. 

 RZB, which owns 70% of Raiffeisen International, began with Friedrich Wilhelm Raiffeisen, he was born in 1818 and died in 1888.  A social reformer who was an advocate of self-help Austrian version of our “sariling-sikap”, that the cooperative grew organically over more than 140 years without a single bankruptcy. 

 Today, RZB is Austria’s third largest bank.  Through the equity held by Raiffeisen International in various banking units, RZB is present in Albania, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Kosovo, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, and Ukraine.  In addition, RZB has also representative offices in Lithuania, Molova, and Russia.

  This concentration of offices in Central and Eastern Europe does not mean, however, absence in financial centers elsewhere. RZB has branches in London, Beijing and Singapore as well as representative offices in New York, Brussels, Frankfurt, Milan, Paris, Stockholm, Ho Chi Minh City, Hong Kong, Mumbai, Tehran, and Seoul.

 RZB is a full service bank, but its focus is on retail banking, giving personal loans to banking customers as well as small and medium-sized enterprises and engaging in the credit card business. 

 It is thus not surprising that RZB enjoys the confidence of international agencies and scores high in the eyes of the rating agencies.  It is partner to the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) of the World Bank.  Standard and Poor’s gives its short term obligations a rating of A1 while Moody’s gives P-1 for short-term, A1 for long-term and to RZZ, as an entity, C+ for financial strength.

 Tomorrow’s hand shake of Dr. Herbert Stepic with the Philippine business community, however, is more than just a fleeting cocktail reception.  In fact, it serves as the public epiphany of quiet kapit-bisig RZB locked with Filipino partners in the beginning of this year.  During the first quarter of 2006, RZB together with its long-time partner in Asia, the Lippo Group, infused about Php 3 billion in Export and Industry Bank (Exportbank), resulting in RZB owning about 10% of the latter’s equity.

 Exportbank, many will recall, was the white knight that came to the rescue of the despositors and investors in Urban Bank which imploded in the first half of 2000.  It was a rare occurrence in Philippine banking that saw a bank less than five years in the scene boldly take over the assets and liabilities of a banking institution and investment house and shouldered the responsibility of bailing out its trapped depositors and investors. By 2004, Exportbank successfully concluded the 3-year liability program of the rehabilitation plan it submitted to the Philippine Deposit Insurance Corporation; and April of this year, it completed all payments due, amounting to about Php 16.% billion, to depositors and creditors both of Urban Bank and Urbancorp Investments, Inc.

 From all indications, RZB and Exportbank are a perfect fit.  Both are bent on focusing on delivery of banking services to small and medium-sized enterprises.  On the one hand, Exportbank has chosen as its customer base the country’s export sector; RZB, on the other hand, through Raiffeisen International, has embraced the goal of assisting customers in other parts of the globe penetrate Central and Eastern European markets.

 Ben Castillo, President of  Exportbank, is very optimistic, and rightly so. RZB is certain to provide Exportbank’s customers a ready and reliable channel to Austria and the rest of Central and Eastern Europe, which is known to us in Asia as the “China” in the other side of the world. 

 Exportbank is THE gateway to the opportunity, offered to Philippine business by the new markets in Central and Eastern Europe and Exportbank President Ben Castillo pledges, “our bank will certainly maximize this opportunity.”  So let it be written; so let it be done.