Raiffeisen Bank to release ROL bonds

Raiffeisen Bank is considering the release of a ROL-denominated bond issue on the domestic market this year, therefore joining the group of trendsetters on this segment of the Romanian financial market. “We’re considering the release of a ROL-denominated bond issue this year. It is too soon to be talking about details now, but we will certainly go for the domestic currency, and the one-year maturity,” Rasvan Radu, Raiffeisen Bank vice-president said. Banca Comerciala Romana (Romanian Commercial Bank – BCR) and BRD-Groupe Societe Generale, the top two banks in the system, had announced a couple of weeks before the end of last year that they were planning to issue bonds this year, too, as they mainly wanted to ensure longer maturities for the cash attracted. Simply put, the difference – as far as banks are concerned, between a classic banking deposit made for a longer maturity and bonds is that, whereas the first option allows for the money to be withdrawn before the due date, so that the bank cannot count on them for the entire duration, the redemption of the bonds before the due date comes with higher costs. The decline in the savings deposited in banks month by month and particularly the reluctance of the depositors towards longer maturities are now forcing banks to find other streams of cash for longer terms. The solution seems to come in form of bonds, which are new financing instruments for the domestic market, but are common practice for mature economies. ZF