Even the rich aren’t as well-off as they were a year ago but that’s not stopping the wealth management industry from focusing on what the future of private banking will look like after the economic downturn has passed. Click below to view my latest story:

Bank employees working in call centers and reminding clients of their overdue loans used to be as far to the bottom of the banking food chain as you could be. Not any more.

Raiffeisen International, the second-biggest lender in eastern Europe, has ramped up staff in its collections and risk management departments.

Active in 17 countries between the Czech Republic and Kazakhstan, it is exposed to a region that is among the hardest hit by the global financial crisis. Rampant loan growth of the last few years has turned into an equally rapid rise of bad debt.

“We substantially increased resources in our call centres, started new ones,“ Martin Gruell, Raiffeisen’s CFO, said ahead of the Reuters Central European Investment Summit in Vienna. “There are 40 percent more employees working in Collections than before the crisis.”

As it is struggling with the rising tide of non-performing loans – they more than doubled in the first half of the year – it has also shifted part of its pool for bonuses to those who are working on saving as much as possible of loans that have become overdue.

“Employees have targets and are getting bonuses depending on how much they are able to collect,” he said. Do they come at someone else’s expense? “Obviously, if there is not such a high demand on our salespeople, bonuses will be lower there.”

And Raiffeisen is feeling that its competitors are doing the same.

“You wouldn’t believe how hard it is these days to find good risk managers and to keep those that you have,” Gruell said. “This is now one of the most sexy jobs in banking.”

Reuters Central European Investment Summit, September 28-30, 2009

The former Communist countries of central Europe have been the last to be hit by the global economic crisis, but th e hit they took was among the hardest. Only big neighbour Russia’s deep plunge into recession is rivaling the sharp fall from record economic growth that’s in store this year for the economies between the former Soviet Union and Western Europe.

Global risk aversion and deleveraging exposed the weaknesses that the countries had been able to gloss over during the boom years – which in retrospect appeared to have been, in some countries, a colossal binge bankrolled by cheap foreign credit extended by Western European banks that had to come to an end when funding dried up.

Even the specter of a region-wide meltdown lingered over the countries this winter as investors turned a blind eye on the differences between fundamentally sound countries like Poland, and Ukraine, Hungary or Romania, which could avert the threat of default, social unrest and instability only with aid from the IMF and the European Union.

But since the IMF and the EU moved in and made clear they would let no country fail, a pickup in risk appetite has driven up emerging European assets to the extent that some investors already worry about the next bubble inflating.

Worries remain. Many of the region’s export-geared countries’ recovery will depend on a return of demand for their exports in Western Europe. Unemployment is on the rise. Budget deficits balloon. And the mostly Western-owned banks still face an inevitable rise in bad debt that will continue well into next year and could thwart a fledgling economic pickup.

Key policymakers and corporate leaders will discuss these and related issues at the Reuters Central European Investment Summit on Sept. 28-30 in Vienna and Warsaw. We will be blogging about it here.

Poland’s Prime Minister Donald Tusk gestures as he speaks during a conference at the Warsaw Stock Exchange August 28, 2009. REUTERS/Kacper Pempel

After falling off a cliff at the start of this year as the global financial crisis gripped, mergers and acquisitions by Japanese companies overseas are likely to pick up again in the second half of this year, according to boutique Japanese M&A advisory firm Recof Corp.

There won’t be a flood of deals, Recof President Hikari Imai says, but the ones there are, are likely to be chunky as Japanese companies expand their frontiers beyond domestic markets where growth prospects are limited.

Geographically the focus is likely to be Asia — China, India in particular and possibly the Philippines or Australia. And the types of companies looking abroad will broaden as well, Imai told the Reuters Japan Investment Summit.

Recof expects Japanese power utilities, paper, food and beverage and retailing firms to look abroad at markets where they can put their advanced technology and inventory control systems to use.

The sort of companies that up till now have been focused on their home base. Driving all of this will be expectations of lack of growth in Japan’s own markets as it climbs slowly out of recession and its population ages — and saturation domestically.

So Imai reckons yen strength and the big drop in stock markets everywhere mean it may be an opportune moment for companies with overseas ambitions.

Photo credit: REUTERS/Yuriko Nakao

Remember the good old days where — if you lived in the United States anyway — people would talk about “emerging markets”?

We’d nod our heads knowingly, wishing these poor folks the best as they tried to accumulate the swell things we had bought for ourselves. We knew that residents of Mumbai or Caracas or somewhere would never attain the great things we had in such abundance here in the good old USA (Hummers; his and hers monogrammed dishtowels; zero down, 110% mortgages on houses we couldn’t afford … that kind of stuff), but we still wished them well.

So, here we are in 2009 and at this year’s Reuters Global Real Estate Summit we find that the new emerging market is … well, it’s right down the block.

According to our guest Tom Shapiro, president of GoldenTree InSite Partners private equity investment firm, the new emerging market in the real estate world is the United States.

Shapiro, in a lively discussion, spoke glowingly about his firm’s recent new business in Brazil and about other opportunities he was seeing outside the United States. But, while he said his firm had not made any investment in the U.S. in about two years, he was starting to look for opportunities and see some enthusiasm for deals to get done.

Shapiro said it was still to early to decide what inning the real estate meltdown was in, but he was starting to see some interest from the sidelines about what the “next big thing” would be — and with cities like New York, San Francisco and Boston as potential growth engines, he was a little hopeful.

Optimism this week has been pretty thin in the real estate world, so we need to take it where we can get it.

Shapiro was one of the featured speakers at this year’s global summit, which continues through the end of this week in New York, London, Shanghai and Kuala Lumpur.

For more of Shapiro’s comments, please click the link below and hear an audio clip:

Tom Shapiro, GoldenTree InSite

Despite the dark cloud hanging over the forestry sector, most industry leaders said they still see the paper business as a good investment.

Overcapacity has kept a lid on paper prices for years, while increasing costs of wood and energy have eaten into the paper makers’ already low margins.

But when asked where they would invest 50,000 euros ($74,330) in stocks other than their own, the participants at the Reuters Paper Summit said the forestries is where they would put their money.

“The good companies will come out of the storm stronger than they were ever before,” said Jouko Karvinen, chief executive of the world’s top paper and board maker Stora Enso.

Karvinen said there has been a silver lining to the “perfect storm” of bad news.

“There may be a good thing with this storm; maybe we will finally get our act together and make decisions that need to be made and start making some real money one day,” he said.

The rapidly growing demand for paper products in China and Latin America’s wealth of fibre were a key argument, the executives said.

“We all need to look for areas that have some growth and create some competitive advantage through your investment,” said AbitibiBowater <ABH.N> Chief Executive David Paterson.
“You either look at the southern hemisphere, markets that have a high growth rate for fibre, like Brazil or Malaysia, or you look at products, which have a real growth in consumption,” he said, adding market pulp and tissue were the products with long-term prospects.

Head of engineering group Metso <MEO1V.HE> paper unit Bertil Langenskiold said he would put the sum into one of the aggressive Brazilian pulp companies or a Chinese paper firm.

Norske Skog’s <NSG.OL> Chief Executive Christian Rynning-Toennesen said he would bet on the industry’s side product, biofuel, which he said will be the sector’s boom area one day.

“I think 10 years from now the biofuel industry will be equally big as the paper industry today,” he said.

All said that the sector would pick up before long.

“I might be an optimist,” said Swedish Holmen’s <HOLMb.ST> Magnus Hall. “But I believe I have a good base for being that.”

Head of packaging firm Huhtamaki <HUH1V.HE> Jukka Moisio said he could not invest in his firm just weeks before the capital markets day.

But he proposed investing in anti-cyclicals.

“I am a risk-averse person, ” he said. “I’d invest in strong brands, where I believe the customer and consumer sentiment is likely to last over declines, like Louis Vuitton.”

Head of struggling fine paper maker M-real said if he could invest in forestries, packaging is the direction he would go.

The heads of International Paper and Smurfit-Stone only saw their own company worthwhile.

“I love the brown business,” Smurfit-Stone’s <SSCC.O> COO Steve Klinger said. “There is a tremendous opportunity and we are ahead of the curve.”