The bank’s focus will continue to be on financing social and economic reconstruction and development of the Republic of Srpska, says the newly-appointed Acting Director of the Investment and Development Bank of the Republic of Srpska, Dražen Vrhovac.
In an interview with banjaluka.net, he revealed further plans of the IRB of Republika Srpska, as well as directions for reorganizing the institution.
Earlier this year, you were named v.d. Director of the Republic of Srpska Investment and Development Bank. What is the current situation in the IRB (profit, placements, investments) and what are the first steps that you have taken and will take in this function?
All preliminary indicators indicate that another successful business year is behind IRB Srpska. 155 million were disbursed through loans, while KM 66 million was invested in securities. Considering that the plan for 2019 is significantly exceeded, we also expect extremely good indicators of the financial performance of the bank and the funds it c manages. The Republic of Srpska IRB has previously established a planning framework for 2020 that provides comprehensive support to the economy and population of Srpska. Accordingly, we will continue to move within the set goals and priorities for this year.
Prime Minister Višković’s government announced last year the reorganization of the Republic of Srpska’s IRB, which is one of the conditions of the IMF. How much do you think is the reorganization of the IRB necessary, and in what sense? What are your latest findings in this field?
Negotiations with the World Bank over possible modalities and the content of changes in the IRB’s business have been going on for some years. While all participants in these negotiations agree that IRBRS as a system is functioning well and achieving commendable results, they also believe that there is always room for further improvements that would make the system more effective. What is certain at this point is that the focus of the bank will continue to be on financing the social and economic reconstruction and development of the RS, especially in those cases that could be an obstacle to sustainable economic and social development.
Can the Republic of Srpska IRB be a driving force in the coming period, that is, an engine that will drive the development of the Republic’s economy and increase investments and in what sense?
The Republic of Srpska IRB was established with a clear vision to become the most important pillar of financial support for development and investment and thus enable the creation of a competitive and sustainable Srpska economy. The mere fact that the Bank’s managed funds have raised around KM 2.5 billion since its inception, for purposes appropriate to domestic development needs and priorities, clearly indicates that Republic of Srpska’s IRB has already managed to impose itself as one of the most important drivers, not only the economic but also the overall social growth and development of Srpska. Therefore, in the coming period, we will continue to act in accordance with the development priorities of the Republic of Srpska, and in partnership with the private sector and international financial institutions, we will support the overall investment activities on our terms.
Opposition often criticizes that the Republic of Srpska IRB government is unequally distributing funds in Srpska and that the eastern part is neglected. What is your view on this and can we expect that the IRB will receive equal treatment for everyone in the coming period?
In the past period, special attention has been paid to stimulating the development of the eastern part of our Republic. To this end, the Government in time established a Fund for the Development of the Eastern part, thus providing funds for the sole purpose of supporting development projects in this area of the Republic. Also, projects implemented on the territory of underdeveloped or highly undeveloped municipalities are stimulated by an additional reduction in the basic interest rate. I would like to emphasize on this occasion that all credit claims that came from the Eastern part.
In accordance with our terms and conditions, they have been approved for funding and will remain so in the future. About 52 million KM is available to finance projects in this area in 2020, through the East End Development Fund and other funds managed by the bank.
Can we expect a greater presence of the Republic of Srpska IRB in the capital market in Srpska and how can this be achieved?
In its work to date, IRBRS has been strongly present in the domestic capital market and has provided a significant contribution to its construction and further development. This is supported by the data that so far, almost 560 million KM has been invested in securities, of which over 100 million was intended for the economy of the Republic. About 13% of the total turnover on the Banja Luka Stock Exchange in the period from 2008 to the end of last year consisted of IRB’s investment activities. The Bank will continue to be present on the capital market in the coming period. This, of course, is in line with our investment policies and the recognized need to realize the socio-economic priorities of the Republic in this way.
What are the plans of the IRBRS and you as a director for the next period, that is, how do you see the IRBRS in two to three years?
With regard to our plans for the coming period, the Republic of Srpska IRB will remain strongly committed to providing comprehensive financial support to the economic growth and development of the Republic under stimulating conditions of use. At this moment, we especially recognize the need for additional focus on financing technological renewal and modernization of the domestic economy, which in itself would bring about an improvement of its competitiveness, both in ours and internationally. In addition, we will continue to promote the Bank and the Republic of Srpska in international financial circles, primarily through the implementation of projects with our partner institutions and international associations, which meet the needs of the domestic economy and construction. Therefore, it is our clear intention to ensure full efficiency in the use of the resources and resources at our disposal in the future, respecting the comprehensiveness of the needs and priorities of social and economic growth and development of the Republic of Srpska.
Source: RTRS
