Raiffeisen Bank Romania: counting on green bonds

Back in 2021, Raiffeisen was the first bank to issue green and sustainability bonds on the Romanian capital market. Since then, it has issued 7 bonds with a cumulative nominal value of almost EUR 1 billion. Business Review sat down with Mircea Busuioceanu, VicePresident & Chief Risk Officer at Raiffeisen Bank Romania, who talked about the lender’s strategy in terms of business development and ESG adoption.

By Anda Sebesi

What were the biggest challenges Raiffeisen Bank Romania faced in 2023?

For more than 25 years, Raiffeisen Bank has been an important player in the Romanian economy, a financial institution with solid results thanks to our long-term investment approach. This philosophy was followed in 2023 as well, when we continued our focus on financing the real economy and ensuring competitive interest rates for our customers’ savings while adjusting our policies to a macro environment characterised by high inflation and geopolitical uncertainties.

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What were the most important projects the bank carried out in 2023?

The activity of a bank is characterised by multiple projects and 2023 made no exception. Among the most important I would mention the significant investments in developing the IT infrastructure supporting our customer business (e.g., new functionalities for Smart Mobile and Smart Market, new lending applications for the individuals and SMEs business segments), the strengthening of our cyber security framework, the successful enhancement of our credit risk model universe for retail business—we are among the few banks in Romania using advanced credit risk measurement—or the progress we’ve made in AI adoption.

What is the current state of the banking industry and what changes should we expect to see in the coming years?

The Romanian banking industry is enjoying a solid capitalisation, therefore it is well positioned to further support the development of the Romanian economy. In the coming years the industry will see accelerated digitalization and consolidation.

How important are ESG and sustainability criteria for Raiffeisen Bank and the industry in general?

We aim to have a positive social and environmental impact, both through the way we operate and by financing projects that promote sustainable growth. Back in 2021, Raiffeisen was the first bank to issue green and sustainability bonds on the Romanian capital market, and we continued in 2022 and 2023 with a EUR 300 million bond. In the last three years, we have issued a total of 7 bonds with a cumulative nominal value of almost EUR 1 billion. We currently have a portfolio of approximately EUR 700 million of loans that are green and sustainable, and we are making steady progress. Just last year we added EUR 150-200 million to the portfolio in this area, and our goal is to have 30% of our portfolio in green loans within the next three years.

Nevertheless, it is equally important to continue to support the development of local communities. With the message “We have more in common than what divides us,” this year we have launched a new edition of the Raiffeisen Communities programme, our NGO sustainability accelerator, with grants totalling EUR 1 million.

What were 2023’s main challenges from a management point of view?

Accelerated digital transformation is impacting all management processes. We’re seeing a continuation of innovation and development in transformative technologies such as artificial intelligence, VR/AR, cloud, blockchain, etc., and our approach is to turn all these challenges into opportunities.

What is the outlook for the banking industry in 2024?

In my opinion, the industry will continue to perform positively in 2024, although I would expect credit risk to be on the rise given the expected macroeconomic developments. As I mentioned before, digitalization and consolidation will represent dominant strategic themes at the industry level.