"Stopanska is in its bes phase at the moment" - Interview with Mr. Diomidis Nikoletopoulos, CEO
The translation of the original interview from Kapital weekly magazine is provided in this article:
1. Mr. Nikoletopoulos, Stopanska Banka recorded a profit of 26.1 mil EUR for the first 9 months of this year which is significantly better than last year. This trend has been noticed during the recent years. How did you manage to have increased profits at a time when most banks and private companies are in crisis?
For years now we have been talking about “some kind of crisis", local or global, economic or political, regional etc. Definitely we live in turbulent times especially if you want to apply a long-term strategy, but the basic rules of doing business remain valid, they even have greater value and more comprehensive meaning than before.
The successful business should do both; to follow the lead of the customers who have larger appetites and ambitions and to create the conditions for developing new needs, the satisfaction of which boost further the economic activity, regardless of the difficulties in the local or global environment. Certain domestic companies have started adapting their operations in line with higher standards and the population is a step closer to the desired European lifestyle. In a business environment with such a set-up, Stopanska Banka is a partner of great importance and being, at the same time, a member of NBG, the largest financial network in Southeastern Europe is able to operate in a modern/European way, sharing the group valuable experience and knowledge with its customers.
Getting closer to our operating model you can realize the reasons of being a so successful company. As we have often pointed out, nothing is accidentally achieved, instead, behind our success there is a long term business plan, continuous and consistent effort by capable people, deep understanding of the customers’ needs and excellent cooperation with them, innovative products and services and all these within a risk management framework that enables the business growth without the Bank undertaking unmanageable risks. We are always aiming to financing promising companies and sustainable projects that create new jobs, increase exports, provide higher quality and added value to the system and of course to support the individuals in all aspects of their financial needs, being the bank with the dominant position in retail banking in the country. The mix of portfolios, the careful lending approach, the well-balanced pricing and the maintenance of non-performing loans at low levels, are the main contributors to our strong profitability.
For all these to be combined and to function perfectly well, we pay particular attention to our employees as a key factor and the most valuable asset: provide them with appropriate working conditions, provide the necessary tools and trainings, make them feel confident and respected at work and recognize and measure the contribution that they have in the success of the Bank. The corporate culture that we practice is set in a way that allows identification with the goals and values that the brand represents and stands for.
So, the excellent results are a sum of smaller successes that come day after day on a consistent base, we do not create them suddenly and therefore they are not a surprise to us, but rather expected and completely deserved.
Moreover the Group supports our strategy and by keeping all the profits in the country and increasing the Bank's capital, well above the requirement set by the central bank. This support, strengthens the Bank’s position and ability to respond to all customer requirements with greater flexibility and better adaptability to the market conditions, supporting at the end of the day, significantly the overall economy.
2. The data shows that during the first six months, the Bank approved 5.9% more loans than last year, more so for the citizens than for the companies. What are the expectations for lending activities with the closing of the year? Is there interest from the companies for investment loans or they still ask for loans for maintaining their liquidity? What are the main reasons that make you bankers “to press the brake” when approving loans to companies?
Different events from the beginning of the year had a disruptive effect and caused a slight delay in some investment projects or in plans for increasing the productive ability of the companies. I think this trend will not change in the short run, however, the domestic and international business community is focused on finding productive solutions in order to execute their projects and business objectives and in this respect, SB will continue to support all viable credit requests that meet our standards and credit criteria.
Regarding the approval or rejection of the loan applications, nothing is new but a matter of satisfaction of the business and credit criteria. You know that business is variable, the market is variable and everyone must adapt its self by updating the main business requirements if he wants to be successful. The same happens with our bank knowing that a successful business model adapted 10 years ago, today might not work at all, and soon this might also apply to business models set up 5 years ago. Regarding the companies, I think they need to have a little more vision, to think globally although acting locally or regionally, to undertake initiatives that will improve significantly their operations and open new doors for cooperation with partners within and especially outside the country, to develop new products suitable for the today needs and of course to undertake risks that can be managed by them, without putting the existing business at stake. Whenever we see this approach, we are more than pleased to participate by supporting them and standing on their side for long, getting from us all the benefits from being our partner by utilizing our experience, know-how and advisory services.
The Bank is certainly motivated to support not only big companies, but also small and medium companies and help them grow and mature not only because of their positive impacts on the economy but also because SB cares companies not to fail, but to create success stories. The corporate lending team that we are building is rich in experience and constantly rejuvenated and supported to accept challenges and to adapt to the daily demands respectively.
3. What is the balance of deposits in Stopanska bank?
The deposits’ balance of each bank are known from the financial statements published regularly. What is important for us is that the trust and confidence of our customers towards SB is, as always, at the highest levels, providing strong liquidity, more than adequate to cover the needs for financing its loans to customers and other placements.
Although this year we passed from different difficult issues locally and abroad, especially with the situation in Greece and the economic challenges originating out of it, the deposit basis of SB remain resilient and even the slight decrease, noticed during the summer has already been reversed and the situation gets stabilized within very short period without having any serious impact.
A key factor in attracting/gathering deposits is the pricing policy which should always be associated with the pricing of loans and the overall risk level of each market and country. In our case, the fact that for many years of having stable currency exchange rate versus Euro, has built the confidence towards the local currency. On the other hand, the difference in interest rates on deposits in both currencies has been significantly decreased compared to the past, thus having impact on the demand of products in different currencies. Taking into account that part of the cash inflows are coming from abroad (i.e. diaspora), it is important the banking system to continue being attractive, offering competitive rates and at the same time, the banks to place these funds in loans and securities with interest rates that correspond to their funding and other costs.
4. Now that we discussed loans and deposits as elementary banking products, what else remains to be pointed out in the banking activities?
Underlying banking operations are certainly deposits and loans, but far from it that with these services ends our role. The Bank is an advisor for managing personal and business finances of legal entities and individuals. Globally, despite the established so-called traditional way of using banking services –branch operations, we see constant introduction of alternative channels and increasing functionality.
Stopanska bankaAD - Skopje as a Bank with the longest tradition in the market, has the largest network of branches and for more than 1 year now is working on completely transforming the branches from transactional to advisory centers since the affinity of customers is gradually moving towards self service for the basic banking transactions (transfer of funds, payment). In these newly organized premises the Bank will continue to offer its traditional services, however the focus will be on the advisory role of our employees for the clients. We want our customers to get premium service and financial advice and to be able to choose the products they need and that best fit their capabilities. In support of this, we are constantly building new teams of young and ambitious bankers who are accumulating the experience and knowledge of their colleagues and combine it with their energy to further strengthen the impression that Stopanska is on the side of the customer.
In our branches we have recently began introducing a digital signage platform that will provide video informative content through which the customers will become more familiar with most of our products and find it easier to accept them and use them. And as part of our commitment to be available for interaction with the community through all contemporary channels, these videos will be posted on our web platform, our profiles on the social networks where we will be more accessible and will detect the needs of our community on time.
Since we try the complete customer experience to be constantly improved and the Bank to be first choice for financial services, we invest efforts and promise that next year we will have a new web platform and more in-depth services to the mobile platform. Of course, as pioneers in the introduction of e-banking and m-banking services it is our responsibility to be leaders of these changes and expand these self service tools.
The Bank is constantly preparing and prioritizing projects that facilitate our background operations as well as the experience of customers with our products, and we are twinning different profiles of professionals who need to challenge each aspect: business, IT, organizational, material and so on in order to introduce product/service which will make us all proud and that can be promoted not only in Stopanska bank but also at the group level within the region.
5. CSR activities are more and more emphasized by Macedonian companies, each company seeking its area of activity, interaction and connection to the community. How does Stopanska Banka handle such activities?
Social Responsibility in my opinion, doesn’t come from companies but from the employees and their daily encounters with the community in which they live and work. The needs of our citizens are our needs, that we see, hear, understand and we support where we can. However, we are especially careful and always pay attention to be transparent, fair and create a long-lasting and not temporary benefit to the community. I am especially proud that the Bank is supporting a lot of projects but especially the projects that help children and connected to their education, health, recreation, humanitarian and so on.
Motivated by the great success of last year's project "Give a smile," when more than 1 million smiles were "donated" by the public as a sign of moral support for the donation that Stopanska made for few regional medical centers in the country, this year our leading project is "Vozi parvo, vozi zdravo". Namely, again through extensive interaction with the public, which requires building a culture of using alternative forms of transport without causing any pollution we executed a project that will soon be completed with the opening of the educational traffic / bicycle polygon in Skopje. With the opening of this polygon we will contribute to the goal of the City of Skopje to build on the traffic culture among the youngest and certainly to remind other participants in the traffic on the effects of using alternative forms of transport on the environment and on humans.
Additionally, as a relevant business entity in the country, Stopanska bank includes many of its customers and suppliers who are then further engaged to also contribute to the better implementation of the projects and all in the best interest of the community. By doing this and many interrelated activities, the projects involve more companies and more individuals and become even more valueable and important for the community, creating far-reaching positive effects.
6. Considering the Greek political and economic crisis is in loop do you expect your mother company NBG to ask for a “piece of the pie” from Stopanska Banka’s earnings? The turmoil in Greece this year again raised the question about the possible sale of Greek subsidiaries across the region. How likely is NBG to sell Stopanska Banka’s shares?
As known, the situation in Greece has started been normalized as both the economic and the political risk have been significantly reduced after the recent agreement with the European Union, covering the period until the end of 2017 and the completion of the election process.
An important part of the agreement consists of the recapitalization of the banking sector and the updating of the restructuring plans by the banks which, among others, include measures and actions such the cost reduction and sale of certain subsidiaries (especially the loss making ones) that will rationalize their operation, supporting their future sustainability and performance.
Consequently, the capital base of the parent bank (NBG) will be significantly strengthened, providing with new perspectives to the group members and having a very positive impact not only in Greece but to the regional economy as well.
On the other hand, it is widely known that our Group, even in the most difficult periods, got no dividend from the profits of Stopanska Banka as a minimum return of its large investment for almost 15 years. Instead, all decisions taken by the Group had only one purpose: to enhance and strengthen the presence and performance of Stopanska Banka in the domestic market, something that was achieved extremely successfully since the bank today is at its best phase ever.
Therefore, all future decisions regarding Stopanska Banka will be taken within this context.
I strongly believe that the future of the Bank will be more than promising and the Bank will respond as always with great success to its important role that has for decades in the economy, delivering through this performance even better results and benefits to its shareholders and all stakeholders.