Csilla Ihasz: 15 anniversary of successful business in Serbia

We were recognized as The Best Bank in Serbia in 2016 by The Banker, while European Business Awards selected us as the National Champion in the Environmental and Corporate Sustainability

Thanks to strong loan volume disbursement to retail clients, banking sector assets reached RSD 3,241 billion, recording an increase of 6.3% year on year. Improved regulatory framework, followed by better collection and partially to ceding of claims, led to decrease in gross NPLs.

At the end of 2016 the overall profit before tax of banks in Serbia was 118% higher than in the last year. What is this telling us about the revival of the banking market?

When looking at financial figures of Serbian banking sector in 2016, we can conclude that there are many positive signs that speak in its’ favor and favor of revival of the demand. The growth of net profit of entire banking system was mostly influenced by provision release, decrease of net credit losses and lower expenses arising from indirect write offs.

Facilitation of monetary policy, low interest rates within the Eurozone and decrease of interest rates on savings also influenced strong competition among banks which further led to a reduction in interest rates on new loans, mainly in corporate sector. In accordance with this and due to improving macroeconomic environment, we could expect further growth of credit activity in the future.

When looking at the results in 2016, UniCredit Bank is positioned as second on the market in terms of profitability. Which factors that have contributed to your successful business?

Year 2016 was very special for our bank. Besides the fact that we celebrated our 15 anniversary of successful business in Serbia, we also achieved excellent business results. This was recognized and awarded with some of the most important acknowledgements in business and philanthropic community. We were recognized as The Best Bank in Serbia in 2016 by The Banker, while European Business Awards selected us as the National Champion in the Environmental and Corporate Sustainability.

Numerous factors made our success possible. We continued to work on improvement of processes and delivery of products and services tailored to the needs of our clients. Our commitment to customer centricity enabled us to further strengthen our position as one of the leaders in terms of profit, efficiency and productivity. We managed to stand still above the market average in terms of many important parameters such as cost to income ratio, return on equity or cost of credit risk.

All this led to achieving the second highest profit before tax in the sector in the amount of RSD 6.5 billion and double digit market share.

When looking at your offer can you please tell us for which products/services there is the highest demand?

We are all well aware of the effects that the dinarization process, followed by the overall decrease in interest rates, had on lending in local currency. Not only that they provided a solid ground for creation of more favorable lending conditions, but they also stimulated market players to ‘get into the game’ of offering the proper product, under proper conditions.

Our bank was one of the market players that, guided by its strong customer focus, managed to provide its clients financing solution in local currency, available upon simple and fast approval procedure. This, followed by favorable lending conditions positioned our RSD cash loan as a leading product from our retail offer. Our client portfolio analysis show that new clients are particularly interested in this product, especially for its refinancing feature since it provides them the possibility to put together all monthly installments into a single one with the most favorable interest rate, therefore enabling them to relax their household. As additional advantage, I would underline the insurance that provides loan repayment support to clients who lose their job, or cannot repay their obligations due to certain unexpected situations.

We are also witnessing significant interest in housing loans primarily due to simplified approval procedure and more favorable conditions, result of increased competition. Fully aware that the process of resolving the housing issue is extremely stressful for clients, we did our best to support them during every step of this process, not only through advisory, but also by offering a competitive product.

When SME segment is concerned, working capital loan is by far the most attractive product, followed by overdraft, guarantees and investment loans. However, we must not neglect the fact that limited number of clients are using loans, while others use mostly payment services. Actually, more than 50% of our clients are using electronic channels and even 90% of their transactions are being performed via e-banking.

You are offering products and services also to students. Why did you decide to target this part of the market?

From the start of our business, our orientation comprehended investments in young people though various programs. Initially we were focused on providing educational support through UniCredit & Universities Foundation, in terms of scholarships, support in preparing final papers or possibility to gain first working experience in the country or abroad. Having this in mind, our partnership with Ministry of Education, Science and Technological Development was something that was imposed by itself. For the group of, how we like to call them, future leaders we created a Student Package Account that enables them to receive a scholarship or a loan on their account, but also to use free of charge current accounts, debit cards, e-banking and m-banking services.

We are fully committed to building a long term partnership with these young people since they are the future of this country. Feedbacks received from them enable us create a range of products that fully meet their needs now, but that will also be useful to them after graduation and during the beginning of employment.

Looking at the numbers today in comparison to the past, can you please tell us how often do your clients use online banking?

Not only Serbia, but entire Central and Eastern Europe are witnessing a technological revolution. Firstly, the number of mobile phone users recorded enormous growth which consequently led to the development of a large number of applications. Now, as a result, we have a significant growth of online shopping.

Official data show that in the last year over 1.45 million people in Serbia bought or ordered goods or services via internet. The majority of them used internet in order to book accommodation, buy travel vouchers, purchase gadgets, food and mobile games.

With aim of keeping up with global trends, we implemented a Mobile banking development strategy thanks to which we improved user experience and introduced new services and functionalities, at the same time educating our clients. As a result, a continuously increasing number of clients are opting to perform banking transactions without visiting the branch, using our m-banking application at any time and from any place.

The European Investment Fund (EIF) and UniCredit signed in January an agreement on guarantees with the aim to increase lending to innovative small and medium-sized enterprises in eight countries, including Serbia. What will this mean in practice for you client segment?

The agreement between UniCredit and EIF aims to enhance access to finance for innovative SMEs, as well as to mid-caps (up to 499 employees). Thanks to this program – Innofin – enterprises in eight countries, including Serbia, have the possibility to benefit from total financing amount worth EUR 160 million for the improvement of their business performance with less security requirements and will be able to take advantage of more favorable price.

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