Petia Dimitrova: Success is only a step towards new success
29 June 2017
Ms. Dimitrova, what are your forecasts for the Bulgarian economy? How do you assess its current condition and its prospects?
The year is going well and I expect it to be successful one for households and businesses, as well as for the banks. Business activity is growing throughout the country, employment and solvency are increasing. In the first quarter, GDP growth reached 3.9 percent according to the preliminary NSI data. This is the highest it has been in the past 2 years. The good news is that the growth is mainly due to domestic consumption. We have long been waiting for this to happen, given the decline in unemployment and the rising incomes. The other good piece of news is that there is a positive investment contribution. Although low, it is a nice change from the negative values of the previous year.
At the same time, there are now good opportunities for project financing like low interest rates and optimal deadlines. Lending follows the attitude of entrepreneurs and the general state of the economy. That is why I expect growth of 3 percent and even more, comparable to the expected growth of the economy.
Did the bankers in Bulgaria manage to clear their name after the events in recent years, or is the word “banker” still loaded with negative connotations?
I do not think that the banker profession is loaded with negative connotations – on the contrary. We are a part of every person’s life, their financial partner. 1996-1997 were perhaps the most dire in the history of the entire financial system in Bulgaria. But this is very far behind us. There have also been moments of crisis in recent years, but as we have seen, the banking community dealt with it and the system remained stable. Confidence in banks remained high, as evidenced by the steady increase in deposits. The asset quality review and stress test conducted by the central bank last year show that banks can withstand more challenges. Today we have a stable and profitable banking system, decreasing levels of bad loans and, above all, extremely high liquidity and capital adequacy ratios, even higher than the requirements in Europe.
What do the numbers show? Do people trust banks enough to take out loans and leave their savings with them?
The data is indisputable. Deposits of individuals and companies reached new record highs – by the end of April they exceeded BGN 74.5 billion. This is an increase of nearly 7 percent for the last year alone.
At the same time, loans to households and businesses are also growing. Gross loans exceeded BGN 55 billion, and all three banking segments – corporate, consumer and mortgage lending, grew at the same rate of about 2.5 percent.
Some important factors here are the improving economic environment, the low interest rates, the more active credit supply. And last but not least, the increased competition between banks. Currently, there is also great interest from customers to buy homes. As of May, we at Postbank have a 60 percent increase in new loans compared to a year earlier. Our forecasts show that this year we will have even higher volumes of both loans to individual customers and corporate loans.
Is now a good time now to take out a bank loan?
My team at Postbank and I have one basic rule – we always advise clients that the best time to take out a bank loan is when they have a clear plan and strategy on how exactly they would use the financing. At the moment, interest rates on loans are at their lowest historical levels, which stimulates a large number of people to invest in the development of their business. I expect that next year the trend will reverse and interest rates will begin to rise. However, I don’t think that this increase will be significant. The European Central Bank is in no hurry to raise interest rates because it wants to see the EU economy stabilize first and support more indebted countries with lower interest rates. On the other hand, mid-term market expectations, including ours, are for an end to the downward trend in interest rates in the eurozone and for a normalized interest rate policy by the ECB, which will be reflected in Bulgaria at a later stage.
If customers want to take advantage of the low interest rates for as long as possible, now is the time to take out a loan. The BNB also forecasts that interest rates will remain at these levels in the short term. As a result of the strong competition on the market, we are seeing interest rates on newly granted mortgage loans at about 4 percent. This is good news for anyone who needs their own home. Customers need to be realistic and know that sooner or later interest rates will gradually begin to rise. But they should evaluate their options well, because if you have taken out a long-term loan at the lowest interest rates, you should be able to service it even in more difficult times.
Do you think that Bulgarians have sufficient financial literacy to make reasonable decisions about their money?
One of the priorities of our bank, as well as other financial institutions, is to help people improve their financial culture. Not everyone needs to understand how the banking system works. It is important that they have enough financial knowledge to know how they can get useful information and make the best financial decisions for themselves. Unfortunately, our education system cannot meet these needs and the lack of qualified personnel is a big problem at the moment. But it is also up to us, the business representatives, to take responsibility for such education. That is why we care about people’s financial literacy and young people in particular, especially via the digital channels.
In our bank we conduct various campaigns and initiatives with which we strive to improve people’s financial literacy. I am happy that our team actively participated in the “European Money Week” at the initiative of the Association of Banks in Bulgaria, where the goal was to improve the financial education of children. We support the Economy Academy – CEIBG’s biggest initiative in the field of education and vocational training of young people, through which students have the opportunity to join paid internships in CEIBG member companies. We also have a training centre where we welcome children of all ages who are curious as to what it means to work in a bank; we also offer internship programs. We support children from the National Trade and Banking High School, the American University, and other schools in the country, and education is a priority in our corporate social responsibility programs.
To what extent is success a matter of luck and to what extent is it a matter of work and discipline?
Success is a combination of hard work, preparation, a good team and the ability to constantly adapt and develop. You need a variegated set of qualities and most of all – motivation. The secret of our bank’s success lies in the ability to adopt the point of view of our customers, so that together we can choose the best and most profitable financing opportunities for them. I always tell my team that the most valuable thing when you look back is to be proud of what you have achieved and what you have left behind.
What are the biggest challenges for your profession and position?
Challenges in our sector are a daily occurrence and they stimulate us to be even better. Without a doubt, one of the important challenges is the digitalization in this age of transformation. People can’t do without their digital devices, we see them in the subway, in cafes, everywhere. Businesses need to adapt to change and drive it forward. While up until recently it seemed unreal, today we are talking about digital wallets, payment using a robot, chatbots and artificial intelligence. It is no coincidence that more and more banks see themselves as technology companies.
Furthermore, banks operate in constant competition with non-banking financial institutions and fintech companies. At the same time, regulations continue to be one of the most serious challenges in the banking sector. More and more new rules and standards are being introduced, regulating almost all aspects of the business – new capital buffers, provision of pre-contractual information, protection of personal data, trading in financial instruments. Let us not forget the new Payment Services Directive, which is expected to lead to significant changes. All this increases the banks’ costs and requires more qualified people.
My personal challenge is to take care of the motivation of the people in my team and their professional development, so that they don’t give up on their ideas, but instead be brave and have the courage to see the advantages outside of the box. It’s important that at the end of the day they are satisfied with what they are doing and can’t wait for the next day.
Who are the people you learn from, who do you turn to in case of difficulties, who are your role models?
Personally, these are the people in my family; in a professional aspect, I respect young business leaders because I see the future in them. However, I don’t like to follow someone and walk on beaten paths – I am always looking for my own path to follow. Difficulties motivate me to be even more patient and persistent in achieving a goal, as I believe that there are no “impossible” projects.
How do you measure your success?
There is no such thing as a measure of success, a universal recipe, etc., each person must find what works best for them. For me, professional success is when I see the success of our satisfied customers. Their trust is the best gauge of our work and proof that we have been developing in the right direction for more than 25 years. Success comes to people who prepare, who constantly strive to learn new things, don’t miss their chances and know how to see potential pitfalls and how to deal with them in the best possible way. Success is only a step towards new success, I don’t allow myself to stop.
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Postbank, with the legal name Eurobank Bulgaria AD, is the fifth largest bank in Bulgaria in terms of assets, occupying a leading position in consumer and corporate lending. The bank has a 25-year presence among the leaders of the banking sector and is a leading factor in innovation and trends in recent years, with numerous awards for its innovations. It is one of the market leaders in credit and debit cards, mortgage and consumer lending, savings products, and products for corporate clients. The bank has one of the best developed branch networks and modern alternative banking channels.
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Petia Dimitrova began her career in the Consular Department of the US Embassy, then worked at PricewaterhouseCoopers as Senior Manager and Senior Auditor. She joined the Postbank’s team in 2003 as Chief Financial Officer. In 2005 she was appointed Procurator of Postbank. In 2007 she was appointed Executive Director and Member of the Management Board of DZI Bank. After the legal merger of DZI Bank and Postbank, she became an Executive Director and a Member of the Management Board of the unified bank. In 2012 she became Chief Executive Officer and Chairperson of Postbank’s Management Board. Under the leadership of Ms. Dimitrova, in 2016 Postbank acquired and integrated in a record short time the activities of Alpha Bank’s Bulgarian branch. She is a member of the Management Boards of the Association of Banks in Bulgaria, the Confederation of Employers and Industrialists in Bulgaria, Borica Bankservice, Atanas Bourov Foundation, the University Council of the American University in Bulgaria, the International Banking Institute, the Young Presidents’ Organization (YPO), the Young Global Leaders Forum with the World Economic Forum and many others. Ms. Dimitrova has won over 20 prestigious Bulgarian and international awards, including Mrs. Economy, Banker of the Year award, etc.
