Uncertainty about the exchange rate and interest rates is pushing companies to seek solutions to cover financial risks, enhanced by the economic downturn.
Romanian companies are starting to seek solutions to slash risks related both to interest rates and the exchange rate, and the progression of raw material prices, which come to account for 80% in overall production costs, so that they may have more business predictability, says Cosmin Bucur, the new head of RBS Bank Romania's Treasury.
"(...) One can operate strategy imports from the area of financial products to the segment of raw materials," says Bucur, 34.
Bucur has been working for the bank since 1998, when he started as a dealer in the Treasury of the former ABN Amro. In 2008, Britain's RBS took over ABN Amro Romania in a global deal. Traditionally, ABN had a strong position on the market on the treasury side of the business.
Now, Bucur is trying to develop the Treasury's operations on the derivatives segment, inclusively trading of raw material price-backed securities, as well as trading of carbon certificates.
Cumulated operations in the derivatives area have come to account for 15-20% in revenues generated by securities traded with the bank's clients. "On the Treasury segment, it's business as usual. New products are the growth driver. Besides the traditional pillars, foreign currency transactions and the monetary market, we now have a third pillar, derivatives," Bucur says. He forecasts declines on the former two pillars.
"Clients' interest in derivatives will maintain, given the move to predictability. Everyone is trying (...) to create anchors, which will emerge through derivatives, due to cover the entire asset class," Bucur forecasts.
Uncertainty about the exchange rate and interest rates is pushing companies to seek solutions to cover financial risks, enha
