Bank of the Year Awards 2018 – central and eastern Europe
The best banks of the past 12 months from central and eastern Europe.
Albania, Banka Kombetare Tregtare
Albania’s Banka Kombetare Tregtare (BKT) continues to improve most of its key metrics, including returns and costs, while growing its market share in neighbouring Kosovo. That has given it enough confidence to upgrade the Kosovo operations from branch to subsidiary status.
With 27 branches in Kosovo, BKT’s share of the market has reached almost 10%, so the bank reasoned that it was strategically important to decentralise the business. It believes that the resulting special focus will allow it to benefit from opportunities in the “dynamic” economic environment of “the youngest state in Europe”.
In 2017, net profits at BKT increased by only 0.7% to $58.9m. Yet the bank was able to continue growing its capital and assets much more aggressively. Tier 1 capital rose by 11.2% to $328m, and assets by 21.2% to $3.66bn. Return on equity improved further from the 19.1% achieved in 2016 to 20.5%. The bank’s non-performing loan ratio tightened from 7.5% to 4.9%.
The technology highlight of 2017 was a project to implement a business process management (BPM) platform. This helps the bank to improve the services it offers through both branch and digital channels within very short timeframes, giving it design-once, deploy-anywhere capabilities, and case lifecycle management for better decision making.
The BPM project has already allowed the bank to renew existing infrastructure by integrating different types of systems, including Fico scoring and origination, enterprise content management, know your customer and identity services.
The bank has become the first in Albania to launch smart mobile banking for its business customers, who can now access their accounts via their mobile devices.
“Every award we receive is thanks to our dedicated staff and, accordingly, is dedicated to them,” says BKT’s CEO, Mehmet Seyhan Pencabligil.
Following its acquisition of Areximbank, Ardshinbank has become the largest bank in Armenia by capital and assets. It says that the deal has significantly enhanced its ability to provide a wider range of quality banking services to its corporate and retail customers.
Areximbank was previously owned by Russia’s Gazprombank. The acquisition, announced in 2016 and completed the following year, has boosted Ardshinbank’s branch numbers to 63, making it one of the largest networks in the country. The bank also has a representative office in Paris.
After net profits more than doubled in 2016, they rose by another 34.5% in 2017, to 53.5m dram ($110,000). Return on equity increased from 8.5% to 9.3%, while cost-to-income and non-performing loan ratios were steady at 45.6% and 2.5%, respectively.
The main thrust of Ardshinbank’s technology strategy is to encourage self-service adoption. In 2017 it installed self-service machines in all of its branches, so as to enjoy all the associated benefits of this model, from a reduction in paper to greater transparency.
The bank’s mobile banking application allows clients to register online and conduct financial transactions around the clock. Options include transfers and payments, currency exchange, card limit adjustments, card blocking and scheduling appointments.
Since 2017 all of Ardshinbank debit and credit cards have been contactless, providing a secure, quick and convenient method to pay for goods or services. The local nickname is ‘tap and go’.
Supporting culture in Armenia is a central pillar of Ardshinbank’s corporate and social responsibility programme. It does this in a number of ways, including sponsorship of artists, concerts and cultural events.
“Nowadays stability and sustainability are insufficient for the successful development of the bank,” says Ardshinbank CEO Artak Ananyan. “Customers demand a hi-tech, attractive and convenient product.”
Azerbaijan’s Pasha Bank grew its assets and net profits in 2017 with the help of a relationship marketing project. This focused on enhanced cross-selling capabilities and promotion of higher margin products.
Pasha Bank is a leading investment and corporate bank serving domestic clients, as well as foreign companies looking to do business in the region. It aims to deliver banking services to the highest international levels of transparency and service.
Other aims of the relationship management project were to increase the number of clients using Pasha Bank as their main bank, to make pricing and discounting more competitive, and to increase non-interest income as a share of revenues. Customers were classified into segments and industries, based on the ‘one decision maker’ principle, and a discount management system went live.
In 2017, total assets rose by 17% to 3.6m manat ($2.1m), while net profits grew by 36% to 83,000 manat. Annual non-interest income grew by 56%, and return on equity was 20%, compared with 15% the year before. Gross return on assets rose from 14.4% to 16.4%.
Last year was also characterised by new digital perspectives, the bank reports. It successfully launched a host-to-host payments solution for large corporate clients such as Azercell, Socar (the State Oil Company of Azerbaijan Republic) and Coca-Cola. The business-to-business platform allows the secure exchange of payment files within a single interface and supports various transaction types.
“During the 2018 to 2020 phase of our strategic plan, we are using digital tools and a flexible approach to transform our business model,” says Taleh Kazimov, Pasha Bank’s chief executive officer and chairman of the executive board. “The bank continues to follow only the best world practice, and offers a wide spectrum of high-quality services as a result.”
Alfa Bank pioneered the ‘mobile first’ strategy in Belarus, meaning that online services are regarded not as merely an additional channel but as the key channel for product sales. Subsequent developments have included remote account opening and, most recently, instant online loans.
At the heart of Alfa’s mobile banking is its InSync.by application. Using this, and a photograph of their passports, new customers can open an account in 30 seconds, with courier delivery of a debit card to any place in the country. This service is unique in the Belarusian market.
Launched in 2018, InSync Loan allows instant loan approvals for existing customers. ‘Time to yes’ is seven seconds, and ‘time to cash’ – cash in the current account – is 30 seconds. Such speeds are fast even by global standards. The share of online loans in Alfa Bank’s portfolio is already 10%. It is working with the National Bank of Belarus on blockchain-enhanced video and voice identification, so it can offer its InSync Loan service to new clients as well as existing ones.
Net profits grew by 13.6% in 2017, to Rbs45.2m ($21.1m), while assets rose 28% to Rbs1.88bn and Tier 1 capital by 30.2% to Rbs282m. Return on equity was a healthy 17.6%, up from 16.4% in 2016, though rising costs pushed the bank’s cost-to-income ratio up further from 58.3% to 61.9%.
The bank wants to remain modern, transparent and convenient for its clients, and has completely changed the way it communicates with them in chat, social media and messengers. Customer support is available 24 hours a day, every day, and agents have no scripts. “We speak the same language as our clients,” the bank says.
Rafal Juszczak, CEO of Alfa Bank Belarus, puts that into context. “Modern banking is not about products,” he says. “This is about people, culture and emotions. At Alfa Bank we simply do what we believe in, going far beyond the traditional approach.”
Bosnia-Herzegovina, UniCredit Bank Mostar
Having identified digitalisation as essential to the future of its business, UniCredit Bank Mostar’s long-term strategy is to keep improving electronic services while continuously educating clients about their advantages.
In 2017, as a result of these educational efforts, active users of digital services tripled to 100,000, giving UniCredit Bank Mostar the leading position in this market. It has also simplified and accelerated the process of paying bills via its m-ba mobile banking application.
In 2017 it introduced the ‘Take a photo and pay’ service. Instead of manually filling out a payment order, users can now use the mobile device to photograph or scan the recipient’s account number, payment amount and reference details. These are then automatically loaded into a payment order.
UniCredit Bank Mostar was also the first in its market to allow clients to design their own banking package. Called Modula, the package comprises a current account, contactless debit card and m-ba mobile banking.
To help guarantee improved security to clients, the bank has completed construction of a modern data centre, conforming to the latest industry standards, including Tier 3.
The past year has also been notable for the completion of the merger process between the bank and UniCredit Leasing. UniCredit is the only bank in Bosnia-Herzegovina to include leasing products in its offering.
The bank was able to increase its net profits in 2017 by 9.8% to Km89m ($51.25m), while growing its assets by 11% to Km5.2bn and its Tier 1 capital by 16.2% to Km616m. Return on equity increased from 11.4% in 2016 to 12.4%.
“We have been able to achieve the best results thanks to the devoted work of every UniCredit team member and the precious loyalty of our clients,” says Dalibor Cubela, president of UniCredit Bank Mostar’s management board. “We are grateful to our clients for their continued trust.”
Bulgaria, Raiffeisenbank Bulgaria
In 2017, Raiffeisenbank Bulgaria outperformed its local banking market in terms of profit, total assets, loan portfolio and deposits. It attributes this to a sustained strategy of excellent customer service and low risk profile.
Compared with 2016, the bank’s net profits grew 1% to Lv134m ($77.17m) in 2017, while assets rose by 11% to Lv6.99bn. Return on equity was more or less steady at 17.7% while the non-performing loan ratio, at 4.9%, was less than half the local industry average.
The bank has concentrated on customer experience as one of the main pillars of its strategy. As such, it continuously develops innovative financial products, provides high levels of service and is transparent about fees. In 2017 it was rewarded by gaining the highest net promoter score (showing how likely a customer would be to recommend the bank) in the Bulgarian market.
Raiffeisenbank Bulgaria has migrated all its debit and credit cards to contactless technology. Last year saw a 40% annual growth in the number of cards issued, with the total in circulation now more than 500,000.
The bank’s corporate website has been redesigned to provide intuitive navigation and more services. The internet banking platform, Raiffeisen Online, has also been redesigned to allow fast and easy bill payments and transfers. The number of online banking users has continued to grow and now exceeds 315,000 customers. By the end of 2017, nine out of 10 payments were being made electronically.
Mobile banking usage is growing too, with downloads of the mobile app up by 40% over 2016. Payments made via the app have doubled over the same period.
“We use traditional ingredients, such as smart growth, efficiency, a healthy portfolio and transparency, and 21st century ingredients such as innovation and digital transformation,” says Oliver Rögl, Raiffeisenbank Bulgaria’s CEO. “The result is a customer-oriented, modern and profitable bank.”
Addiko Bank Croatia describes 2017 as a “breakthrough” year, it being a year when the bank recorded above-benchmark growth of new business in all key customer segments.
The Balkan interests of Hypo Alpe-Adria-Bank were rebranded as Addiko Bank in 2016. Its new business strategy is to provide “straightforward banking”, with simpler products and convenient services.
That means fewer essential products with greater value, described in the simplest terms so they are universally understood. The new strategy was accompanied by a sales force effectiveness programme focused on cash loans, primary current accounts and packages.
This had an immediate effect on branch performances, with 2017 year-on-year sales increases in all targeted products. Retail loans increased by 51%, current accounts by 38% and current account packages by 56%. A loan improvement project focused on corporate and small and medium-sized enterprise clients saw new loan disbursements rise by 27%.
While Tier 1 capital and assets remained largely unchanged from the previous year, net profits rose by 288% to in 2017 Hrk230m ($34.9m) as revenues rose, costs were reduced and the business returned more meaningfully to the black.
Over the course of 2018, the bank launched Addiko Chat Banking, Croatia’s first Viber-based financial transaction service. It allows customers to communicate directly with the bank and make simple payments. After only a few weeks, Addiko Bank had more than 50,000 followers on its public Viber account.
In 2017, the bank also launched its first digital branch. It is still the only bank in Croatia to provide such a service.
“This is about great people working together,” says Mario Zizek, CEO of Addiko Bank Croatia. “In 2016, when we launched the Addiko brand, I was convinced that customer centricity, cultural change, hard work, dedication and perseverance would bring results. And we have delivered.”
Czech Republic, Ceskoslovenska Obchodni Banka
The strategic highlight of 2017 for Ceskoslovenska Obchodni Banka (CSOB) was the signing of a 10-year exclusive partnership agreement with Czech Post. The partnership hugely extends CSOB’s distribution platform for financial and insurance services.
CSOB already operated at post offices under its Postal Savings Bank (PSB) brand, but this was alongside a number of other providers. Czech Post has now simplified this complex business model, with only a single provider. The new arrangement allows CSOB to expand its offer of banking, savings, pensions and insurance products via some 2800 post offices and another 400 franchise outlets. That gives the bank the widest distribution network of any bank in the Czech Republic.
Together with Czech Post, the bank has developed a new cross-selling function for the postal front-end system, which shows which products the client has with PSB as well as CSOB. It then suggests the best new product to offer to the client.
CSOB Mobility focuses on smart payment solutions for public and personal transportation. This includes insurance and the financing of electric and hybrid cars at home and abroad. The bank is market leader in card payments for public transport, with more than 600,000 tickets a month paid for with CSOB cards.
In April 2018 the bank acquired Uetreno.cz, the largest comparison website for household services in the country, reinforcing its strategy to get closer to clients outside banking. It already owns an insurance comparison website.
Net profits increased by 16% in 2017, to Kcs17.5bn ($760m), while assets grew 21% to Kcs1315.6bn.
“The Best Bank of the Year award shows that our work is developing in the right direction,” says John Hollows, CEO and chairman of CSOB. “We are constantly striving to improve not only our services and products, but also the overall approach to clients.”
Estonia’s SEB Pank values its small and medium-sized enterprises (SME) customer base highly and is intensifying efforts to facilitate its growth. In the past 18 months it has launched a number of initiatives in support of this key segment.
Like its sister banks in the neighbouring Baltic states, SEB Pank has established an innovation centre at its headquarters. The centre’s principal function is to host seminars, workshops and hackathons for SMEs, young entrepreneurs and start-ups.
The Growth Programme is set to become a regular event at the centre. Here, SMEs get professional mentoring through workshops and individual training sessions. This is supplemented by an online learning programme, the e-Academy, which has attracted more than 60,000 users so far.
SEB believes that, by creating toolboxes and co-operation formats for SMEs, over the long term it can foster a mutually beneficial relationship. The bank points to the fact that Estonia’s SME financing portfolio grew by 15% in 2017, compared with 0.8% in 2016.
The bank sees opportunities rather than threats in new disruptive technologies, and is making its open banking platform available to start-ups and fintechs. It describes this as a ‘sandbox’ where they can test and develop their products.
Other technological milestones include the launch of Smart-ID, an SEB identification solution that does not require a smart card reader or a special SIM-card, and the introduction of EU-wide instant payments. SEB was the first bank in Estonia to join the EU system, which allows clients to make payments of up to Ä15,000 in seconds, around the clock.
The bank is active in promoting financial literacy. It has designed a 10-lecture course for use in schools, and created a blog project – Life in the Shoes of a Pensioner – which highlights the need for long-term financial planning.
In 2017, Bank of Georgia completed the transformation of its retail banking operations from a product-led to a customer-centric model. At the same time it has continued to invest in user-friendly and multi-functional digital platforms.
The bank operates in the corporate and investment banking, retail, and wealth management segments. It has three retail brands – Express, which services emerging retail clients with the emphasis on technology and cost-efficiency; Bank of Georgia, which serves mass retail customers; and Solo, for mass affluent clients.
Its overall strategic aims are to grow the product-per-client ratio in mass retail, double transaction volumes in emerging retail and to develop a significant regional franchise in wealth management.
Bank of Georgia has redesigned all of its branches to make them more client centric, retraining staff to become universal product bankers and moving all non-client-facing processes to the back office.
It has reinforced the new approach with a reward programme, Plus+, which awards points for loyalty and benefits for having multiple products with the bank.
A new multi-feature banking application, m-bank, was launched in 2017. Since its launch it has been downloaded by customers nearly three times as often as the bank’s previous app.
“Bank of Georgia, with its best-in-class corporate governance standards and premium listing on the London Stock Exchange, has evolved as one of the few truly public financial institutions in eastern Europe,” says Bank of Georgia CEO Kaha Kiknavelidze. “This has allowed the bank to attract financial and human capital – our biggest competitive advantage in the market.”
Net profits in 2017 grew by 17.2% to La338.9m ($125m) while assets increased by 17.6% to La12.6bn. The bank also issued a landmark international local currency bond.
After a string of other acquisitions, OTP Bank more than doubled its market share in Croatia with the purchase of Splitska banka in May 2017. It had had its eye on Splitska, the fifth largest bank in the country, for more than a decade.
OTP bought the Croatian universal bank for Ä425m from Société Générale, which had acquired it in 2006. The Hungarian bank had wanted to bid for Splitska at that time but was effectively prevented from doing so by the Croatian regulator on competition grounds. OTP’s local subsidiary, OTP banka Hrvatska, already had 4.9% of the Croatian market. The acquisition raises that to 11.6%, alongside 93 additional branches, 255 ATMs and 1334 employees.
In 2017, OTP’s net profits rose by 38% to Ft168.6bn ($587.6m), helped partly by the Croatian buy. Tier 1 capital grew 17% to Ft1063bn, and assets by 12% to Ft7704bn. Profitability was reflected in the share price, which rose nearly 30% in 2017, before falling by about 5% in 2018.
While the bank has endured a period of contracting loans, the past two years have seen a spectacular turnaround in loan volumes at group level. In 2016, performing loans grew 6% and in 2017 by 25% (foreign exchange-adjusted and supported by acquisitions).
Part of OTP Bank’s Digital Transformation Project, launched in 2015, has been a digital wallet project to make payments more convenient and simple. After OTP’s Simple contactless mobile payment system, available only to OTP customers, proved a huge success, the bank launched a virtual prepaid Simple card which anyone can use. It can be topped up from any bank card, OTP or not, via the application.
“We believe in stability and continuous innovation,” says Sándor Csányi, CEO and chairman of OTP Bank. “OTP’s main strength is the traditional respect for cultural differences – this is the basis of our regional development, which is driven by both organic and acquisitive growth.”
Bank for Business (BpB) is achieving dramatic growth in Kosovo by offering its customers more than just banking services. Its Suppliers Club helps them get better prices from their own suppliers.
The BpB business model focuses on micro and small and medium-sized enterprise (SME) clients. It realised that one of the main barriers to growth for micro customers was their lack of scale in purchasing, which meant less room for price mark-ups.
So the bank has taken an industry-by-industry cluster approach to its clients, and negotiated better price deals with large suppliers on their behalf. The suppliers have a channel through which to communicate with the micro clients. BpB settles their invoices and intermediates in financing their working capital in “a fast and efficient” process.
This win-win triangle has started to pick up and new micro clients are joining the bank to get their supplies through the club.
Net profits grew by 40% to Ä5.5m in 2017, while assets grew by 25.6% to Ä204.9m. Tier 1 capital grew 35.3% to Ä19.6m and return on equity was on a similar level to 2016, at 35.6%. Bank staff give professional advice to their clients, reflected, perhaps, in a non-performing loan ratio of 2.97% (in 2016 it was 4.94%).
The bank puts technology at the centre of strategic investment. It has renewed most of its IT structure and its entire fleet of ATMs. It has also deployed new online and mobile banking platforms, and plans to introduce m-POS and wallet payment services
“In the past three years, BpB has experienced an upsurge in performance, especially at its core business segments – SME clients and private individuals,” says Arton Celina, BpB’s CEO. “Our highly motivated team, improved efficiency and tailor-made products have been the ingredients of our success.”
In a busy programme of new development, the emphasis was firmly on technology for SEB Latvia in 2017. The bank replaced its previous banking system with a new core IT system, introduced an easier solution for client authentication and launched an upgraded version of its mobile banking application.
The new IT platform was by far the bank’s largest investment project of the past decade. It took three years and cost more than Ä30m. Developed by SEB engineers in the Baltics, it is already being used by SEB Estonia and will be adopted by SEB Lithuania. The result will be a unified banking software platform across all three SEB Baltic banks.
For clients, the main manifestation of the new system was a new, more user-friendly internet bank, one with more functions to manage their finances in the most convenient way.
Another joint initiative across SEB’s Baltic operations was Smart-ID. The application replaces code cards and code calculators to provide easy access to the internet bank and to authorise payments and other transactions.
The challenge was to persuade clients to change their habits, moving from code cards to a mobile app. Smart-ID proved to be a rapid success, gaining nearly 150,000 users by the end of 2017. It was introduced in all three Baltic states simultaneously, and Latvia has led by some margin in numbers of new users.
SEB Latvia launched a new version of its mobile banking app and was one of the first two Latvian banks to introduce instant payments. The group wants to be a frontrunner in creating the next generation of financial services, taking into account the revised Payment Services Directive. It has already created an open banking platform in all three Baltic countries and is in discussion with fintechs and other companies who wish to create new opportunities for clients.
SEB bankas places a premium on education and innovation, and its initiatives range from encouraging financial literacy among the young to its new innovation centre for fintechs and other fledgling businesses.
The SEB Innovation Centre, opened in March 2018, was created to help enterprises grow and become competitive as quickly as possible, with the help of innovative ideas and services. The idea is that this will then foster faster economic growth in Lithuania. The centre also runs a unique three-month, called the Business Growth Programme, which is free for small and medium-sized enterprises. Fourteen companies participated in the first programme earlier in 2018, with mentors from a number of countries, including the US.
The bank also offers a free video educational programme on business and entrepreneurship skills via its e-Academy, SEB’s biggest Baltic project targeted at young companies.
In 2017, SEB bankas significantly upgraded its mobile banking application, simplifying the most popular functions. It now allows prompt payment to other app users using the client’s contact list, and fast payments of up to Ä30 without additional passwords. The Smart-ID app allows secure access to an online bank account with just a few clicks.
Smart-ID also provides access to the bank’s newly expanded remote advisory service, which analyses clients’ needs and gives appropriate financial advice.
“Advanced banking solutions, which allow our customers to address their financial concerns promptly and conveniently from any location, are among our key priorities,” says SEB bankas CEO Raimondas Kvedaras. “So is the promotion of entrepreneurship and innovation in Lithuania.”
SEB bankas’s 2017 net profits were flat at Ä93m, while assets grew by 2.7% to Ä7.72bn. Return on equity rose slightly from 12.1% to 12.5%, the cost-to-income ratio improved from 45.1% to 42.5%, while the non-performing loan ratio fell from 2.9% to 2%.
NLB Banka has been upgrading all its channels, including digital services, to improve the customer experience. The result has been a steady increase in customer numbers.
In 2016, the bank introduced NLB mKlik, a mobile banking application for retail customers. In 2017, it followed that with the launch of NLB mProklik for corporate clients. The launch marked the 15th anniversary of the bank’s first electronic banking services for corporates.
Work has also been carried out on a new mobile wallet payment application, NLB Pay. This is an upgrade to the bank’s existing contactless technology, and will provide customers with a simple and safe payment experience at the point of sale. It is already available to Mastercard holders and will soon be extended to Visa users.
NLB Banka is enjoying great success with a co-branded credit card, NLB haPPy, which launched in conjunction with Neptun, a technology and appliance retail chain. A first in its market, NLB haPPy rewards cashless transactions and adds a further percentage of cash back when spending inside the network.
By creating a competitive advantage, the bank has boosted sales and attracted clients. The customer base has been growing by a consistent 5% annually. NLB Banka has completed the first phase of a customer experience analysis. With the resulting client profiles, it hopes to create cross-selling opportunities and to target customers for sales campaigns.
The bank also has a leading position in Macedonia’s bancassurance market, and is the only bank selling non-life as well as life products. Last year, overall net profits rose 40% to MKD2.2m ($40,800).
“The success of NLB Banka relies on its ability to constantly transform itself as challenges arise,” says CEO Antonio Argir. “At the same time, we preserve our unique character as an innovative and proactive partner, creating a memorable experience for our clients.”
Seven years after it began operations in Montenegro, Erste Bank has completed a new headquarters building that symbolises the bank’s aspirations. At a cost of Ä9m, it brings together all the back-office functions that were scattered in three separate buildings.
The building introduces an open-space working environment, promoting open communication and an open culture. It is energy-efficient and environment-friendly, and is accessible to people with disabilities. The new working environment supports the bank’s organisational culture project, Cooltura4U – “kultura” meaning “culture” in Montenegrin, “tura” meaning “the trip”.
Erste Bank was the first bank in Montenegro to tackle organisational culture systematically. It has implemented the group certification project, known as Guide to Excellence, and carried out an educational programme for tellers and retail advisers, aligning and upgrading the quality of service throughout the retail network.
A new mobile banking channel, Erste mBanking, has been launched. This offers all the features of Erste NetBanking, and many additional ones, unique to Montenegro. The app is free for NetBanking users and transaction fees are up to 50% lower than at the teller. mBanking user numbers have been growing at around 15% a month.
The bank has also upgraded its offer for pensioners, introducing a consumer loan with payment protection insurance (PPI) paid by the bank. Because the PPI reduces the risk, the bank can offer the loan on more favourable terms, resulting in a win-win for both.
The pensioner market segment is significant, and Erste’s interest rate on these loans can be up to two percentage points lower than the competition.
“The key ingredient is always in the hands of our people, who have the courage to step out of their comfort zone and embrace changes,” says Aleksa Lukic, CEO of Erste Bank Montenegro. “We are good at accepting change, but also at leading it.”
Bank Zachodni WBK, since rebranded as Santander Poland, made important strategic progress in 2017 when it bought much of Deutsche Bank Polska’s business. The move should help it to consolidate its position as the third largest player in Poland’s financial sector.
The transaction, which closed in the final quarter of 2018, includes Deutsche’s retail, private and small and medium-sized enterprise banking business and branches, as well as the DB Securities brokerage. Foreign currency mortgage-backed credit facilities were not included.
The deal increases Santander Poland’s assets by 12%, its share of the consumer lending market by 11.7% and customer deposits by 11%. It will also make the combined bank the leader in the private banking sector.
Santander was the first bank in Poland to launch the Online Service Trust programme. This enables the electronic signing of documents, including time-stamp and verification services, and allows the bank to introduce paperless processes both internally and with clients.
In 2017, the bank implemented its ‘Bank as you want it’ brand strategy, introducing a totally new personal account model that has been widely replicated by competitors. Instead of having to adapt to the bank, customers can decide exactly how they want to use their account. In less than a year, more than 750,000 Poles chose this product.
“Our relationships with customers are based on the sense of security and on advanced solutions that respond to their needs,” says Gerry Byrne, country head of Santander Poland. “This year’s transactions further strengthen our position in the Polish market, and the new Santander brand gives us new opportunities, especially in terms of innovative payments methods and international trade solutions.”
Romania, BRD Groupe-Société Générale
BRD Groupe is on a steep growth path, at least in terms of profits, and has now embarked on an ambitious and all-embracing transformation programme. The programme has four distinct pillars: retail, non-retail, operations, and information systems and projects.
The overall goals are to enhance the quality of service for clients, and to increase operational efficiency. The digitalisation of major processes is designed to achieve both of these aims, while improving the remote channels offering.
This digitalisation starts in the retail business. BRD plans a full renewal of its mobile and internet banking platforms, to provide a unified channel experience. Consumer lending and client on-boarding will be digitalised, accompanied by a shift from a transactional to a customer interaction-based call centre. Self-service capabilities will be upgraded.
In non-retail, BRD is focusing on maintaining its strong position in the corporate market while strengthening its relatively weaker performance with small and medium-sized enterprises. The plan includes process efficiency enhancement, more leverage on global transaction banking, increased loan origination volumes and more leverage on synergies with retail and local subsidiaries.
Under the operations pillar, the bank will build an increasingly centralised and automated structure for mass banking operations, with more dematerialisation, straight-through processing and reorganisation of back-office activities under one reporting line.
The value of information systems will be further enhanced via the decoupling of the core banking system and the integration of value-adding platforms and services.
BRD increased net profits by 85% in 2017, to 1.42bn lei ($348m). “In 2017 and the first half of 2018, we capitalised on a combination of a comprehensive and up-to-date product range, thorough risk management and a firm-wide effort to improve customer service,” says François Bloch, CEO of BRD Groupe.
In January 2018, retail arm VTB24 was merged with VTB Bank as one of the key initiatives of the group’s 2017-19 strategic plan. Within the unified bank, the retail business has improved lending and deposit market shares, while ensuring funding for the development of retail technology.
The merger has produced business synergies and cost savings, with management and systems centralisation and integration across corporate and investment banking, mid-corporate banking and retail business.
In retail, as a result, the bank enjoyed a number of achievements in the first half of 2018. It passed the milestone of 11.5 million active clients for the first time. Sales of loan products rose by 33%, driven by mortgages and cash loans, and private banking funds grew by nearly one-quarter.
VTB became one of the first Russian banks to introduce biometric identification technology. Using a digital platform, VTB can remotely identify a person by individual characteristics such as face or voice. This gives users secure access to digital services “without leaving home”, meaning more accessibility for remote areas or low-mobility customers, and more convenience for all.
The bank’s new (and award-winning) Multicard allows users independently to select a loyalty programme, choosing between accumulation of bonuses or miles, or a cash-back arrangement. It acts as a ‘super product’ for all operations, including card payments, savings, transfers and obtaining a credit card loan.
Multicard’s launch prompted a fivefold increase in card applications in the second half of 2017, and it has become the leading product in sales of payroll products in Russia.
As part of its strategy of developing its presence in Europe, the group has merged its operations in Austria, Germany and France into VTB Bank (Europe) SE – the new legal form of Societas Europaea. The centralisation will allow the bank to make its entire product portfolio available to all clients across Europe.
Banca Intesa has embarked on a comprehensive digital transformation programme that will fundamentally change its business model, while boosting operational efficiency and redefining the banking experience for its clients.
The bank has developed an end-to-end consumer-centric journey that enables retail customers to get cash loans and overdrafts via an online solution from the convenience of their homes.
It has also launched a state-of-the-art mobile banking app for businesses, particularly smaller ones, allowing them to check their accounts and make payments of all kinds on the move.
A new virtual branch gives customers the best of both worlds – a digital experience in terms of promptness and convenience, but the human touch in advice and support. They can communicate via text chat, video or audio call, or desktop sharing, without visiting the branch but retaining the personal experience.
The branch network is also being transformed, migrating most transactions to self-service facilities and digital channels. This will include 24/7 self-service zones, and new functionalities added to the ATM network. At the same time, Intesa will place a strong focus on building long-term relationships with customers.
The bank has completed the first stage of Constellation Serbia, a core banking information system modernisation project. It is replacing its core IT platform with the Oracle Flexcube Universal Banking solution.
Net profits increased by 19.4% to RSD11.8m ($114m) in 2017. “Our strong performance across all segments, reflected in our outstanding market and financial results, rests on stable fundamentals, sustainable growth and responsible governance,” says Draginja uric, president of Intesa’s executive board.
“This has enabled us to embark on a comprehensive digital transformation programme that will create more value for both our bank and our customers.”
While Tatra banka has been co-operating with start-ups and fintechs for more than a decade, it has now gone a step further by launching ‘Elevator Lab powered by Tatra banka’, described as an ecosystem for fintechs.
Located at HubHub, Bratislava’s largest coworking space, Elevator Lab has a technology showroom, offering access to innovative technologies. It provides mentoring and direct support as part of the Raiffeisen Bank International’s accelerator programme. It also hosts technological and business hackathons, lectures and conferences.
In response to Payment Services Directive 2, Tatra banka has introduced an open banking application programming interface and developer portal and will allow fintechs access to anonymous and scrambled data.
For its banking customers, it has introduced face biometrics to mobile customer identification. One result is 100% automation of loan approval. It also reduces the time taken to open an account – by 70%, compared with account opening in a branch.
Mortgage loan applications can now be discussed and submitted remotely, via the bank’s Dialog Live contact centre. In most cases a binding mortgage offer is made during the first telephone contact.
Part of Tatra banka’s mission is to extend the boundaries of banking, and it has chalked up a number of recent innovations. One is an online pensions saving supplement scheme. The bank notifies savers of the pensions they can expect and then facilitates additional savings. The number of these ‘upsells’ grew by 67% year on year in the first quarter of 2018.
The bank has introduced a ‘mailbot’ to its call centre, to reduce the number of e-mails for clients. A chatbot is being used on Facebook, where it can provide information about mortgages and hand over to the call centre.
“Tatra banka is defined by a strong local brand, great people and a lasting combination of temperament, curiosity and openness to the changing world,” says Michal Liday, CEO of Tatra banka.
In a tough environment with very low interest rates and increased competition, SKB banka increased its market share and posted the second highest profits in its history in 2017.
While net profits fell, on the face of it, by 32% to Ä43.4m, the 2016 figures had been boosted by exceptional gains. On a like-for-like basis, profits grew by 12.7%. Assets also increased by 7.4% to Ä3.17bn.
The bank’s share of the market for retail loans rose slightly in 2017, from 11.4% to 11.6%, boosted by a favourable fixed-rate housing loan. Market share in corporate loans rose from 9.1% to 9.6%.
As part of its digitalisation programme, SKB introduced contactless debit cards, and mobile banking via MOJ@SKB. It also launched Info SMS to keep customers in touch with the state of their accounts and cards via text message.
SKB’s banking focus is on individuals, sole proprietors and small and medium-sized enterprises. It believes that its responsiveness to their needs and continual improvement of network locations accounts for existing client satisfaction while attracting new customers. In recent net promoter ratings it scored 17 points above its nearest local rival.
The group supports larger companies through SKB Leasing, which continues to rank among the leading leasing companies in Slovenia. In 2017 its leasing book grew by 13.9% to Ä438.5m.
The SKB group is owned by Société Générale. In 2017 it expanded its private banking offering with the support of Société Générale Private Banking. It believes that the expertise involved has no competition in the domestic market.
“Financial robustness surely plays a role in explaining SKB’s success,” says Andre Gardella, SKB’s CEO. “But it would be nothing if not supported by a highly committed and professional team, and if it was not devoted to the implementation of a clear strategy under strict ethical rules.”
In 2017, Raiffeisen Bank Aval had its most successful year since joining the Raiffeisen group in 2005. Net profits grew by 43% to Hrv5.32bn ($193m), which was the highest among all Ukrainian financial institutions.
The bank attributes this to building long-term relations with reliable customers. In 2017, record loan volumes helped to boost assets by 17% to Hrv67.02bn. Its non-performing loan ratio improved dramatically, from 52.1% in 2016 to 20.6%. It has also managed to increase process efficiencies, maintain reasonable cost savings and introduce further up-to-date technologies for online services.
One theme the bank has successfully pursued was to increase lending to energy-efficient projects, exceeding a Hrv1bn target in 2017. Raiffeisen Bank Aval has signed a risk-sharing facility with the European Bank for Reconstruction and Development to support up to Ä20m of small and medium-sized enterprise (SME) loans over three years.
The bank has created a digital hub, which focuses on the development of online solutions for internet and mobile banking, digital wallet and joint projects with fintechs. It has also launched Raiffeisen Pay, a mobile wallet app, and introduced Raiffeisen Business Online, a new platform for SME customers.
This year the bank launched its new Raiffeisen Online internet banking system for private customers. This provides remote registration, extended functionality and a single platform for mobile and web versions.
Raiffeisen Bank Aval is now rolling out a phased renovation of the branch network with contemporary design and a digital concept of customer services, due for completion in 2021.
“Our success is built on long-term relationships with our clients, our deep expertise, the ongoing improvement of processes via our lean and agile methodologies and a strong risk management reflected in the good quality of our loan portfolio,” says Volodymyr Lavrenchuk, CEO of Raiffeisen Bank Aval.
