Market opportunities for specialist niche banks

This all means a financing environment for Investkredit presenting new opportunities and challenges for specialist solutions in the European core market. For the current year 2005, Investkredit sees particularly good business opportunities in the structuring of financing solutions specially tuned to meet customers’ needs. Innovative instruments such as the Mittelstandsbond, which was in such strong demand in 2004, and a targeted expansion of specialist segments, such as acquisition and project finance, will give considerable support to the development of the business. The ABS instrument available to medium-sized companies for securitising trade receivables will also be a focal point for the business in 2005.

Additional boosts to growth are expected to come from the business in the core market countries of Germany, Poland, Slovakia, Czechia and Hungary, which already contributed substantially to Investkredit’s positive performance in 2004. The aim here is for an intensification of direct contacts with customers by the teams on the spot, in both corporate lending and real estate finance, leading to an increase in the number of mandates as arranger.

In 2004, overall economic performance in the euro areas and, accordingly, the required budgetary consolidation were below expectations. Taking the forecasts of economic researchers into account, 2005 is also unlikely to see any relief for public-sector budgets. At the same time, the public sector in Central Europe will continue to push the catching-up process, and the infrastructure investments required for this will put a substantial strain on their budgets. This means high demand for Maastricht-sparing financing solutions in the future, both for the euro area as well as for the accession countries. Kommunalkredit with its know-how will be offering these more than ever. Work on the market in the CEE area is being pooled into a new bank – Dexia Kommunalkredit Bank – in order to play a leading role in public finance here too.

In the real estate segment the new E2 portfolio, participating with the EBRD and co-operating with DIFA, is an ideal combination for all concerned. This will make more boosts to growth in the region possible. In the future, Europolis’s function will consist of building up and managing several portfolios with various risk profiles as asset manager. Europolis will be able to further expand its pioneering position as investor, developer and asset manager of commercial real estate in the CEE region.

The focus in the existing E1 real estate portfolio will be on the second construction phase of the entire River City Prague project and completing the other developments that have already started in Czechia, Hungary and Croatia. The new E2 portfolio will also be more devoted to the candidate countries for the next expansion of the EU and other Eastern European states, such as Ukraine. The volume of Europolis’s real estate is expected to grow by at least EUR 150 m in 2005.