Petia Dimitrova: “Postbank is merging with Piraeus Bank Bulgaria in order to provide more options to our clients”
7 November 2019
Ms. Dimitrova, under your management, Postbank successfully finalized the acquisition of Piraeus Bank Bulgaria nearly three months ago. What stage is the consolidation process at? When do you expect to complete it?
Yes, Postbank and Piraeus Bank Bulgaria are merging and will move forward together. We announced the acquisition of the majority stake of the latter’s capital on 13 June 2019 and there are two important stages to complete until end-2019 – the legal merger and the operational integration. This is a key step in the strategy of the strong international group, Eurobank, Postbank is part of for expanding its activities by focusing on the markets it holds a leadership position on.
What is important for us now is to inform the clients of Piraeus Bank Bulgaria of every step of the merger so that they are aware of the process and prepare their financial plans without having any concerns. For the purpose, we are using our traditional communication channels, websites, leaflets and social networks, as well as the special app, EVA Postbank. The app builds upon our banking chatbot – the first chatbot on the Bulgarian market, which achieved unique results for just a year. We created the “new” EVA on the occasion of the merger with Piraeus Bank Bulgaria in order to answer the most frequently asked customers’ questions. What is unique about EVA Postbank is its live chat functionality, which connects customers with Postbank experts to receive answers to more specific questions. Thus, we can be sure that our clients get all the information they need. The merger is a significant step forward in our development. It will enable us to provide our current and future clients with more competitive advantages, innovative services and products, as well as high-quality customer service via our online and offline channels.
It was announced that many departments had already been merged, including those in charge of currency operations, and the consolidation of the banks’ branch networks is set to start next month. What approach will be applied in this process? Will you start, for instance, from Sofia and the big cities or will conduct the process simultaneously across Bulgaria?
The actual merge of departments and teams will start upon the legal merger of the two institutions. Up until then, we will continue operating as two separate institutions. Meanwhile, we are harmonizing the banks’ systems at many different levels. One of the most important aspects certainly is the integration of the two teams, who will contribute to the even better customer service thanks to their experience, expertise and motivation. The development of the branch network is one of our key priorities because most of our clients still prefer in-person consultations with our experts. We invest a lot in making our offices “digital”, in providing options for conducting various operations in modern self-serving zones, which improve customer experience and save customers time. Our first pilot office of this type is already functioning in The Mall in Sofia and the fully renovated Postbank offices in two trade centres will be soon officially opened. We are planning to revamp for one year all of our branches, including Piraeus Bank Bulgaria’s ones, with our unique design and digital zones.
We offer other modern solutions, such as our express lending centres, Momento. They are already providing an expanded range of products and services, which “spread” from Sofia to Plovdiv, Varna and Burgas. We can assure our clients that our branch network will be even bigger after the merger, which will be an additional benefit for them.
Undoubtedly, all bank institutions make considerable investments in the digitalization of their services. There is a high number of lay-offs globally in banks’ central offices and branches. Will there be such process in Bulgaria, as well?
The introduction of technological and innovative solutions is, indeed, the path we are confidently walking on. Our Digitalization mission is aimed at creating an optimal customer experience, as its main function is to meet consumers’ expectations for reliable online financial services and a close and direct contact with the bank. However, this process will not affect our employees. On the contrary, they are at the heart of Postbank’s success. Our competitive advantage is the fact that we know our clients and can provide a flexible solution for their needs. The digitalization of services and the use of self-serving zones for basic bank operations will enable our staff to have more time to consult our clients on various products, options and the best solutions for them. To sum it up, digital services are the future but they will not replace the human factor in the relations with our clients. On the contrary, they will help us offer them even better customer experience, more convenient functionalities, fast and flexible customer service.
Let us go back to the integration of Piraeus Bank Bulgaria. The e-banking information system of which of the two banks will you integrate in your future work or there will be a new system?
While we were preparing for the merger, we conducted an in-depth analysis of the advantages of the two systems and decided to rely on Postbank’s one. Our e-banking app – e-Postbank, as well as our mobile banking app, m-Postbank, are among the best on the market and I am sure Piraeus Bank Bulgaria’s clients will highly assess them. In early September, we launched m-Token Postbank – a mobile app which enables clients to confirm payment operations securely and easily. With its two-factor authentication functionality, Postbank meets the regulatory requirements laid out in the new EU Payment Services Directive for verification of e-payments.
I must note that Postbank constantly invests in its digital channels. We have been awarded many times for our innovations because they meet the real consumer expectations, create added value and establish even better relations between the bank and its clients.
Will the consolidated bank shift its focus to a certain lending segment?
As I said, the two banks are merging in order to offer more options to customers in all areas – more innovations, more personalized financial solutions, better customer service. This process will not change our strife to finance the various segments according to their needs – individuals, households, small, medium and big companies, and intuitions. We will continue working like we have so far by offering individual, personalized solutions to individuals and flexible business solutions. The bigger, consolidated bank will provide us with more capacity to do it.
There is a trend of increasing fees and commissions for basic banking services, including in Postbank. Does this mean that banks are trying to take more preventive measures out of fear of another crisis?
Generally, the Bulgarian banking sector is really competitive and dynamic but it is also very strict in one of its main functions – protecting its deposit-holders’ interest. This is why we all constantly seek the balance between active lending and our strife to avoid unnecessary risks in the actual market conditions.
Postbank is part of an international group, supervised by the European Central Bank and rigorously follows a conservative policy regarding risk taking. We believe this is important for us, for the stability of the banking system and our clients, because this way we can protect their long-term interests, as well. Speaking of the levels of fees and commissions, they are not arbitrarily determined, but are a function of various objective factors and are a part of a concrete service customers receive.
Do you expect more mergers and acquisitions in the banking sector in the next few years?
That entirely depends on lenders’ growth plans and tactics. I have always said that the consolidation in the sector is a natural process because it facilitates the so-called synergy of scale. It is a lot better for companies to be big in order to operate in the banking sector, which requires more and more investments in digitalization, the implementation of the increasingly stricter laws, in attracting and retaining the top talents in the market. Thus, they can meet security requirements, comply with regulations and provide high-quality services to their clients.
What are your projections for banks’ profit as at end-2019, considering the high H1 results?
2019 would be yet another good year for the banking sector. It is marked by profit hikes, growth in the various business segments, higher quality of credit portfolios. I expect that Postbank will post good results in end-2019. The year is strategically important for us because we are merging with Piraeus Bank Bulgaria and are becoming an even bigger and stronger lender. We registered growth in corporate lending, consumer and mortgage lending. We enhanced our digital banking channels and continue being a preferred choice of our clients. We launched innovative products, which are well accepted by customers, and will offer new and attractive services.
How does the eurozone policy of record-low interest rates affect the banks in Bulgaria, considering that most of their parent banks are in the eurozone?
The decisions of the European Central Bank directly affect the interest rates in Bulgaria because the Bulgarian lev is pegged to the euro and the Bulgarian and the European economies are closely integrated. However, this is not the only factor determining interest rates levels. They are affected also by the high liquidity of the Bulgarian bank system, the intense competition among financial institutions, including as a result of the penetration of fintech companies, global processes such as Brexit, the US-Chana trade war, etc.
This is why, it is important for customers to take into consideration interest rates and the development of their resources in the long run when they decide to borrow loans. They should also know that we will support and consult them so that we find the best solutions for their tomorrow together.
About Petia Dimtrova: Petia Dimitrova is Chief Executive Officer and Chairperson of the Management Board of Postbank. Since June 2019, she has served as CEO and Chairperson of the Board of Directors of Piraeus Bank Bulgaria, which will operate as a subsidiary until the finalization of the merger with Postbank.
Petia Dimitrova is a member of the Management Boards of Borica, Atanas Bourov Foundation, Endeavor Bulgaria Association and the International Banking Institute. She is also a member of the University Council of the American University in Bulgaria, of the Young Global Leaders Forum with the World Economic Forum, of the Young Presidents’ Organization, etc. She has won over 20 prestigious Bulgarian and international awards, including Mrs. Economy, an award by Atanas Bourov Foundation for banking and financial management, Banker of the Year award, etc. Under her management, Postbank has become one of the most awarded financial institutions in Bulgaria after winning in two consecutive years the Best Bank in Retail Banking in Bulgaria award in prestigious World Finance magazine.