New People, new Branches: A Focus on Customers’ Real Needs


Eastern European economies are particularly sensitive to any negative development in the world economy. According to a recent survey, morale among investors in the eurozone dropped in October to its lowest level in more than six years. But Gyula Fatér, CEO of OTP Bank Romania is not giving in to despair. On the contrary, the head of the Romanian unit of Hungary’s largest lender envisages aggressive plans to grow market share. He talked exclusively to the Budapest Business Journal in his Bucharest office.

Gyula Fatér, CEO of OTP Bank Romania

BBJ: From time to time there is news in the Hungarian media that the Romanian economy is doing so well that it will soon catch up the Hungarian economy. What is your take on this?  

Gyula Fatér: It is quite complicated to compare, so I wouldn’t really focus on that. Let us just elaborate on the current situation in Romania. What we see is that there are a lot of opportunities here. In the previous years there was a quite an impressive growth in terms of GDP. However, most countries in Europe are facing at least a slowdown, and we expect it will also have an impact on Romania. However, the overall expectation is still that, even if the growth rate will be lower than in the previous year, it will remain healthy, and we can rely on this, improving our capacities in this country. We want to invest more in Romania, we want to extend our capacities, so we are quite positive. We think, that Romania has some of the biggest, if not the biggest, potential in this region, so this is why we see the opportunity here and we are strengthening our foothold.

BBJ: There is GDP growth, but there are also other factors: a growing deficit and very intense internal consumption which, analysts say, is overheating the economy.

GyF: There are always uncertainties; we cannot ignore this. However, we are targeting certain segments that we believe are more resilient to these changes. Also, we want to have a more balanced growth in terms of products. In the recent past, we have pretty much focused on loans. We have a very aggressive plan that seeks to double in five years our market share in terms of assets, which means also the loan unit. At the same time, we are putting more emphasis on managing our customers’ whole wallet: current account, main banking relationship, so the entire relationship should be renewed. I can say that we are in a transition which is very much focusing on improving the customer experience.

BBJ: There has been some bank consolidation recently in Romania, but there are still many lenders on the market. Why do you think customers would choose OTP?

GyF: What we see is that, even this year, we have been able to grow our market share in terms of the SMEs and mortgage lending. Why do SMEs turn to us? We are a universal bank with a very solid background. OTP, as a dominant regional banking group, has 18.5 million customers in 11 countries. We have the know-how to approach them, and on the top of that, as I mentioned, we are working on a new method of customer experience. I think that pushing digitalization to the extreme probably does not meet most of customers’ expectations. People still need that personal relationship they can get in the branch network, especially when they need financial advice to deal with a complex life situation. Of course, we have a very modern internet and mobile banking system, OTPdirekt, a system serving our customers online. But, beyond that, instead of closing branches, laying off people and forcing our customers to stay away from our office, we do the opposite. We hire new people, we want to be there for our customers, we are even prepared to open new branches. So we believe that, contrary to what is happening, we should focus on our customers’ real needs and maintain a personal relationship.

BBJ: Not so long ago Romanian banks were struggling with bad loans, mainly contracted in the financial crisis. What is the situation now?

GyF: The pressure is much lower than it was before. Fortunately, fewer and fewer customers are still struggling with this situation, so there are fewer and fewer resources needed from the banks. We have plans in place for dealing with this issue more actively, though. The issue is rather how to manage this in a proper way. Some are choosing to sell the non-performing loans as soon as possible, while we prefer to manage that, if we can; we prefer to make an agreement with the customer.

BBJ: That is a positive development, but there are several other challenges, the U.S.-China trade war, Brexit and other strong factors, which could create significant problems. What do you expect, how will they impact our markets in the region?

GyF: As I said earlier, we can see the [coming] European economic slowdown, and I include everything in the causes of that. What we must see is that Europe is not slowing down because there is something wrong with its economies, but all those factors that you mentioned are having an impact. There are the uncertainties of [the] post-Brexit [situation], the U.S.-China trade war, but also some measures taken by the United States against European products. We can summarize all those as [contributors to] the European economic slowdown. Hopefully it will be managed but, frankly, we cannot really control them. Our expectation is that there will be a slowdown, definitely, but not a crisis.

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