VUB is one of the most experienced banks in finance companies. It also confirmed its role during the pandemic, when it very quickly implemented many digital solutions and significantly intensified regular contact with entrepreneurs. Even as the only bank, it opened a new branch of the company during the crisis.
But as he says Andrew Viceník, Director of Corporate Banking at VÚB . BankThe role of the modern bank is not only to finance entrepreneurs, but also to help do better and more sustainable business. “At the bank, we have the knowledge and skills to help companies develop their businesses. Among the thousands of projects we have been a part of, we have built knowledge that can help entrepreneurs do their business better. This is the added value of a modern bank that SMEs will find here.” .
In the interview you will learn more:
- What digital solutions help entrepreneurs find financing more easily
- How does VUB appreciate the further development of the real estate sector and how does it realize the risks of investing in office buildings
- How entrepreneurs have grown since the last financial crisis and how this affected decision-making in a difficult situation
- To what extent do companies need to replenish their reserves and what causes delays in investments?
- Why the country needs to be involved in promoting sustainable businesses responsible for the environment and employees, and whether it is realistic for investors to come to terms with a lower return on capital
VUB is a powerful corporate bank with a large network of branches and a number of relationship managers. How has the pandemic changed the way you work and how have you been able to deal with it?
At VUB, we were able to adapt to working from home at record speed, dissolved technology support, cut out unnecessary processes and set out to streamline the remaining ones. All of us at the bank understand that the situation is complex and that customers today need banking support more than ever.
The pandemic has really pushed us to unprecedented performance. I will give one example for all of them. Ten years before the crisis, we had not opened any new branch of the company. However, when the measures were issued in the summer of 2020, we added a new branch in Bratislava to the network, while competition closed corporate centers during the crisis. During the pandemic, we have verified that close contact and extensive support are absolutely essential. We intensified communication with customers and the result was their satisfaction with the quality and quantity of our communication. This assured us that our decisions were correct.
The latest trend is digitization, where has the VUB moved in this direction?
It must be said that in recent years, retail has been greatly digitized and corporate banking has remained to some extent. But in the last year and a half, we have faced this hurdle and are moving forward with the changes. During the pandemic, we have invested in expanding digital archives and easier electronic exchange of documents. We have also launched the Business District, through which customers send us their orders online. For relationship managers, we “turned up” a third of online meetings, so instead of three, our guy could handle four meetings for the same segment. We recently started measuring a new parameter, called customer encounter time. It is the time he spends with the customer directly and not on his financial results or preparing the loan offer as it was in the past. We realized that it was important to spend time with and listen to the customer effectively. We have set ourselves an ambitious goal of spending 50% more time with clients this year than in previous years. So far we’re at +25%, which would have been a great result in the past, but we want more today.
We currently accept eligible e-signatures for many products, such as opening and modifying accounts, and are also working on digital signature of loan agreements. A qualified signature is the key to working with clients more efficiently. If we are successful, we will be able to establish a legal relationship with the client without meeting them in person. What is more or less standard in retail is the biggest step you can take in digitization in the corporate sector.
Why is customer contact so important to you?
For companies to improve, they need to innovate, which in turn requires investment. The pandemic has shown entrepreneurs how important it is to work with the bank, suppliers and customers. Today, work is more flexible and interconnected. I see it as a kind of move away from individualism and a stronger focus on belonging. This also changes the role of the bank: the sooner the customer lets us go about their business and talks to us about where you’re pushing their shoes, the better we can help them.
Connecting with business managers is to make them more open. We don’t decide which company is the worst or the best, but we want to take all of our customers even further. But not just by lending them money. We have the knowledge and skills to help them develop their business better. Among the thousands of projects we’ve been a part of, we’ve built the knowledge that can help entrepreneurs do their business better. This is the added value of a modern bank.
You are one of the main financiers involved in building real estate. In this sector, it operates transversely from residential construction, through office buildings, and logistics to shopping malls. How has the coronary artery crisis affected the real estate market?
Real estate prices are driven up due to slow project implementation, commodity prices, but especially high demand due to very cheap mortgages. It is questionable how long the consumer will accept the price hike and when the rental housing will become a safer solution. The Slovak problem is not the price per se, but the availability. The so-called housing affordability index, which measures the time required to purchase an average apartment, measures 13 years for Slovaks. It is one of the worst outcomes in the European Union, where people earn an average of 6-7 years per apartment.
Another question is how long will the demand for housing last, as the demographics deteriorate and our numbers get smaller and smaller. The demand for rural people who want to move to cities will be exhausted once and another motive for growth will have to be sought. The truth is that Slovaks have a stronger tendency to own an apartment than Austria or France. The topic of rental apartments is opened, how many of them will be built and how to finance them so that they are economically sustainable.
What about office buildings?
We can also see for ourselves that up to 1,300 employees can now work in the VUB headquarters with an original capacity of 1,000 people. If people work alternately from home and office, they will not need a fixed place. However, there is no indication that companies should leave buildings en masse, reducing rents and occupancy. The market tries to regulate low demand by reducing supply, introduces rationalization measures, and at the same time, in accordance with the principles of long-term sustainability, pressure is created on modular and flexible buildings. Adequate liquidity in the market and interest in real estate projects. The office building sector is still promising.
Many companies have paid extra during the pandemic for lack of reserves. Do you expect that companies will continue to lack reserves?
The main problem in the near future will be that companies will not lack reserves, but investments. Some companies have tried to survive by stopping the investment and putting this money in reserve. However, without investment, they will lose competitiveness. I don’t think companies already have sufficient reserves and can manage next year without secured financing. Even today, it is important to ask not only how it lives, but how it develops.
The big topic is sustainable corporate finance. What role will banks play in this?
From the start, VUB has defined itself as a green bank looking for long-term sustainable solutions. We currently have green bond issues ready, and we are committed to managing waste and financing new technologies. The important topic is ESG, i.e. supporting companies that do their business sustainably and ethically. In addition to achieving profitability, successful companies must be able to act responsibly towards the environment and future employees as well. In order to incentivize companies to operate in this way, we need to provide them with more financial resources that are beneficial in the long run.
Do you think so Responsible companies must be funded Easier and more beneficial compared to companies that do not adhere to principles?
It is already clear today that state participation will be central to the ESG, as governments must have a rational ambition to make Slovakia an efficient and innovative country according to the principles of the ESG. Funding for innovation isn’t cheap because you don’t know in advance which idea or trend will prevail. If Slovakia is to constantly push the principle that sustainability is more important than economic outcomes, we will all have to accept that the return on capital will also be lower. It is a matter of general agreement and determination that we want to have a healthier and more sustainable world, not a more profitable one. It’s the right decision, but it won’t work without new rules for state financing. The first step in this direction will also be how effectively you can invest the money from the recovery plan.
Profile – Andrej Viceník, Director of Institutional Clients Department at VUB Bank
Andrej Viceník has been working in VÚB since 2006. Until 2010 he held the position of Corporate Client Management Director and until November 2017 he was managing the Small and Medium Enterprises Department.
Since December 2017, he has been a member of the Board of Directors and CEO of the Corporate Banking Division and Chairman of the Supervisory Board of VÚB Leasing, having previously held management positions at Česká poisťovna, Zurich poisťovna and HVB Bank Slovakia. He graduated from the Business School of the University of Economics in Bratislava, and also expanded his education by completing the Executive MBA, which he received from Webster University.
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