Erste Bank strategy in CEE pays off
14 Sep 2005
Each year the prestigious financial magazine ‘The Banker’ grant ‘The Banker Awards’. The awards decided by the global editorial team of ‘The Banker’, asses not only the latest results and performance data but also the strategic developments and overall achievements of the banks. A record 510 banks entered from 138 countries this year.
The banks must also demonstrate that they use modern technology in order to strengthen their position on the market, and must show what sort of strategy and promise they have for the future.
Former state owned banks Ceska sporitelna, in the Czech Republic and Slovenska sporitelna, Slovakia, members of the Austrian Erste Bank Group, have been awarded ‘Bank of the Year’ country awards for their respective countries.
Ceska sporitelna and Slovenska sporitelna both share a common experience. State owned from the forties to the nineties, their evolution has taken them to huge loses and close to bankruptcy. After the privatization of Ceska sporitelna back in 2000 and Slovenska sporitelna in 2001 they turned to profitability under the management of Austrian Erste Bank. Within a transformation period of less than 18 months both banks developed from “dinosaurs” with poor prepared staff, inefficiency, bad products and services to leaders in their local markets.
Andreas Treichl, CEO of Erste Bank describes the process: “It is a tough process transforming former state banks into market leaders. It’s characteristic that their employees are afraid to be responsible. They are afraid to make mistakes. We invest heavily into staff training to change this attitude and to teach people new skills related to customer management. We think our de-centralized approach helps: our banks in CEE have clear targets, but how they reach them depends on them. This means motivation and trust from our local employees and their sentiments towards the Erste Bank Group are very important.”
Today the two banks represent a case study for successful turnovers of major state owned banks in Central Eastern Europe highlighting Erste Bank’s success. Erste Bank is currently taking part in the banking privatizations in Romania. Andreas Treichl comments on Erste Bank’s successful strategy: “We see an investment in a country as a long-term commitment. We don’t enter a market to turn a bank into a profitable institution and then sell it. Once we enter a market, the bank turns into a member of our Group, an important stone in our mosaic.”
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