From London all the way to Shanghay, VUB, a.s., is being actively involved in providing proexport activities of Slovak firms A financial institution which has the upper case letter "B" in its logo

Vseobecna uverova banka, a.s. (VUB) ranks among our largest financial institutions. It has an irreplaceable role in giving effect to financial operations of foreign trade of the Slovak Republic. We are talking with Ing. Jozef Galis, general manager of the VUB international relations division, about concrete aspects of its activity.

What do representations abroad mean to VUB and how many thereof does it have there?

It is first of all about the presence of our bank in significant financial markets, which is of course also in the interest of Slovak foreign trade. A first VUB representation opened six years back in Moscow. This, however, is not doing active business but instead concentrates on intermediating them and is instrumental in obtaining information on export possibilities, terms of payment, or picking up banks fit for Slovak clients who are operating in Russia. On the contrary, the Prague-based VUB branch office is engaged with active business, grants credits, opens accounts, make payments in both the Czech Republic and abroad especially in relation to Slovakia. To promote the extension of goods exchange between the Slovak and the Czech Republics through export development, the Prague-based branch office grants credits to subsidiaries of Slovak firms in the Czech Republic.

Another VUB representation is operating in London. Its preoccupation is to provide contacts with major financial institutions for the parent bank, further receive syndicated loans to the benefit of our bank or VUB participation in loans for other foreign entities. Despite that the European Central Bank has its registered office in Frankfurt upon Main, Germany, London continues to be a financial centre beyond European importance.

A hitherto last VUB representation was set up a year ago in Shanghay. China constitutes not only extensive but also prospective market and therefore it is preparing the opening of a number of Slovak-Chinese joint ventures. A representation based directly in a country of its future operation obtains information on approapriate forms of investing and commercial activities that are thereafter available to VUB clients. Even through this activity does the bank intend to make contributions toward mutual development of Chinese-Slovak relations in the area of foreign trade.

Traditional commercial relations with the neighbouring countries are the subject of financial operations while providing them. What activities is VUB developing in the Visegrad Four countries?

We have established good relations in the Czech Republic with Komercni banka and they are expressed through individual agreements promoting mutual trade between the Czech and the Slovak Republics. VUB is also maintaining similar relations with Ceskoslovenska obchodna banka (CSOB), which used to be a monopoly bank on foreign trade financing. In addition to mutual credit lines to finance exports, VUB is extending guarantees for its clients to the credit of CSOB and the other way round. Naturally, there is at the same time cooperation with other Czech banks as well. As regards Hungary, VUB has signed credit contracts to promote exports of the appropriate country with Magyar Kulkereskedelmi bank that is specialised in foreign trade. We are informing each other on further possibilities in extending the cooperation.The weakest link of the interbank cooperation is as yet posed by Polish banks where VUB has not yet signed contracts or agreements on foreign trade promotion.

What are prospects in improving the cooperation with Polish banks?

In the past, several negotiations were held with the representatives of major Polish banks. However a standpoint was dominant on their part that with the hitherto foreign trade turnover between Poland and Slovakia it was not necessary to establish direct clearing relations and the system of payments is being effected through U.S. or other banks. We expect that with current developments of commercial relations it is just a matter of time to intensify within one year also interbank relations in the light of accelerating the system of payments and to create more advantageous conditions for implementing mutual trade.

Slovakia's proexport policy has a number of forms. By what can a financial institution contribute to its successful implementation?

In the VUB international relations division, a special department is set up to finance exports and promote foreign trade. Its province includes offers of bank products specifically oriented toward funding exports. This regards, for example, bills of exchange - our client may offer a supplier credit, with the bank buying back a bill of exchange and refinancing a transaction, thereby in fact funding it. Another option is to buy back a documentary letter of credit. This means that the client may grant a supplier credit and VUB will refinance that for it after the instruments have been accepted by a foreign bank. In such a manner a bank in fact is crediting a foreign entity and financing a Slovak exporter. Thus, as I noted, besides Czechia and Hungary, VUB has entered into export credit lines with Ukraine, Yugoslavia, Romania, as well as Bulgaria, Russia and Cuba. We are cooperating in this field in particular with Eximbanka SR that is arranging insurances on certain export activities of Slovak export firms.

Slovak Trade FORUM