Welcome to the October issue of The Treasurer. No doubt as you read this, the eurozone crisis will still be rumbling on without a final resolution seeming any nearer. In July, research by US Bank Citi put the chances of a country leaving the euro in the next 12-18 months at 90%. But 18 months is a long time to suffer agony, so let’s hope we get out of casualty earlier than that.
There has been so much focus on the eurozone over the past year that it is easy to overlook the fact the pain has spread to other European countries. This is particularly the case in Eastern Europe where Hungary is in intensive care. The Hungarian banking system has been negatively affected by exchange rate dynamics due to a large loan portfolio denominated in Swiss francs and, late last year, it formally asked for financial assistance from the International Monetary Fund.
But Hungary isn’t the only country that looks unsteady on its feet. Rating agency Moody’s says Bulgarian banks’ non-performing loans will hit 20% by 2013 while Czech banks also face growing losses on loans, too, after a splurge in unsecured consumer lending. We examine the problems facing these countries and others in our cover feature, starting on page 18.
Luckily, despite the eurozone crisis, it isn’t all doom and gloom in the world. Latin America is a shining example of this and, on page 22, we take a good look at the region, which is attracting the excitement of investors from across the globe. It boasts young populations, economic competitiveness and rapid growth. Have we already seen the best of Latin America? It certainly doesn’t look like it.
In times of turmoil, there tends to be a flight to quality and this has certainly been the experience of Grosvenor, the property group with an empire in Mayfair and Belgravia, and whose shareholders include the sixth Duke of Westminster. David Peters, Grosvenor’s group treasurer, talks about its success at accessing the US private placement market, on page 24.
Autumn has tended to be a tumultuous time over the past few years. So let’s hope for some calm this month. I wish you a fruitful four weeks and look forward to welcoming you again to The Treasurer next month.
Don’t forget to drop me a line if you have any comment on the magazine or you have an idea for an article. I will always be delighted to hear from you.