When Banka Creditas bought Expobank last September and subsequently renamed it Max banka, you planned to merge them by 2025. How does it look now?
It is true that we want to merge both banks. And we decided to do it as soon as possible. If things go well, already during the second half of next year. We are now preparing all the details, but we cannot say a firm date yet. This depends on how the analysis of the merger project turns out, which we will then submit to the Czech National Bank for approval. It is a complex legal and organizational process, which also includes informing clients two months in advance.
Why did you decide to speed up the connection?
Our analysis showed that it is better to merge the banks first and then develop their products. Originally, we wanted to do the opposite and develop some retail products independently at Max Bank.
So will you have to slow down or postpone the innovations you planned in both banks?
The innovation plan at Banca Creditas will not be affected in any way. At Max Bank, we have suspended or postponed some new activities, for example the offer of new consumer loans. However, this did not affect the biggest planned investment and innovation in Max Bank – the transition to a new version of the Flexcube IT system. It happened during the first weekend of July, when we had to take an extended shutdown of internet banking because of it. It was an important breakthrough, the launch of the Flexcube system at Max Bank is a crucial step for the future development of Creditas Bank as well.
How is this related to the development of Creditas Bank?
The new version of the Flexcube system should become the heart of the IT systems that Banka Creditas will also run on after the merger of the two banks. Until then, we want to develop new products and services on the new system at Max Bank, for example new mobile and internet banking or a new solution for managing the branch network. Max bank clients will see some improvements by the end of this year, for example a mobile application, which they do not have yet. Creditas clients will receive new mobile and internet banking only after the merger of the two banks.
You mentioned that you are preparing new branch management on the new Max Bank system. However, Max Bank has only one branch. Will its clients be able to use the Creditas branch network?
This will not be possible until the connection with Banka Creditas.
You say that the innovation plans of Banka Creditas will not be hindered by the merger with Max banka. What does it look like with the involvement of Creditas in the upcoming mobile number payments, which should be launched in the Czech Republic this year?
We will certainly not postpone this and we want to be in the first wave of banks that will offer payment by number. In the same way, we already know that next year we will also offer clients immediate payments in euros within the countries of the eurozone.
What new things are you planning for Creditas clients this year?
In the fall, we will launch a new application for complete online investment management. We are also preparing a further expansion of the range of investment funds. These are very popular among our clients, for example the Creditas Real Estate Fund had an annual appreciation of 12 percent last year, the best among real estate funds. In the first quarter, we added the Creditas Mixed Fund, which focuses mainly on bonds and shares of domestic companies, to the offer, and we are going to offer other funds. We will also soon launch new funds for qualified investors. It concerns the Retail Park Pardubice fund and the Alisol green fund, whose underlying asset is photovoltaics.
A year ago, you told us that you would like Banka Creditas to start offering consumer loans this year. Does this still apply?
Due to the change in the merger strategy of the two banks, we have decided not to start this year yet and will return to it when the merger takes place.
Are you planning any changes in the Creditas branch network? In the number of branches or in the range of cashier services that you now operate at all branches?
Of course, we monitor the workload of individual branches, and we are partially moving some less efficient branches to other locations. But this is not a change of strategy. We plan to maintain roughly the current number of branches. As for cashier services, we want to keep them at all branches, because our clients expect them from us for now.
Banka Creditas is profiled as a bank for the valorization of savings. How do you see interest rates on your savings and term accounts now?
As far as our bank is concerned, we want to continue to offer clients above-average value for these products. As for the development of interest rates on savings and time deposits in the whole market, I am convinced that they will start to fall. When this happens depends on the monetary policy of the Czech National Bank. According to financial market expectations, the CNB’s first rate cut could happen this year. I personally assume that it will be in the first quarter of 2024.
Are you thinking that you would lower the interest on deposits even before the CNB lowers the rates?
We certainly won’t do that with savings accounts. For time deposits, the expected reduction in CNB rates has already been partially reflected in the interest rate.
How are your mortgages doing and especially the foreign currency mortgage for commuters that you started offering a year ago?
In general, mortgages are performing better than expected for us, even though we entered the market relatively recently. The market went through a big decline this year, but we should still fulfill the plan of roughly four billion. We are also satisfied with foreign currency mortgages.
As of July 1, the Czech National Bank eased the rules for granting mortgages. Are you seeing any recovery in demand yet?
It is essentially a novelty, so it did not have time to show interest in new mortgages. But in general, we perceive that the real estate market is slowly recovering. This is also confirmed by the volumes of new mortgages granted in the Czech Republic in the last three months.
How do you view the discussed possibility of starting to offer multi-generational mortgages?
At Banca Creditas, we do not yet have a clear opinion on this. We will wait to see what the CNB, legislators and the Czech Banking Association say about it. However, we will certainly not be among the first banks that would like to introduce such a product. Personally, I don’t find the idea of transferring mortgage payments to the next generation very happy.
As part of the consolidation package, the possibility should be opened that even people who invest in mutual funds, shares or save in term deposits in their old age could be entitled to a tax deduction. Just like people who put money away in retirement funds. Are you going to offer any of the products designated by the Ministry of Finance as a long-term investment product to clients?
We have no plans to do so yet. This is mainly because the entire government package is still heading to parliament. Only after its acceptance will it be possible to start any preparations for the offer.
In the government package, together with other changes in building savings, the market with it was also going to be opened to ordinary banks. Now, however, the Ministry of Finance says that it should be excluded from the proposal during the discussion in parliament. Do you mind?
Never mind, we wouldn’t even try. We think that building savings in its current form is an outdated product and that other banks can offer clients competing products that are often even more advantageous for them.
Are you going to start offering a DCC blocking service at Creditas, i.e. a service that usually offers customers a disadvantageous exchange rate when paying or withdrawing abroad? DCC blocking has already been introduced by many banks, and Expobank, now Max Bank, was one of the first to allow it.
This is one of the services that we will definitely not come with before the connection with Max Bank. It also follows from the information of the Czech Banking Association that the blocking of DCC has one fundamental disadvantage. When you set up a block, there are places where you won’t pay for it. Many clients do not understand why this happened and complain to their banks. We will likely implement DCC blocking only when the service becomes more widely known.
Do you plan to tighten the conditions for confirmation SMS, i.e. charge or cancel them, as some banks have already done?
No, confirmation SMS will remain in our offer and we will not charge for them.
From the beginning, Creditas only issues Mastercard payment cards to its clients. Are you going to switch to competing Visa cards, as some other banks have recently decided?
We do not yet have such a project or plan. At the moment, it makes no sense for us to offer clients cards from other providers in addition to Mastercard. The offer of Mastercard’s competitors would have to convince us of such a step. But none of that is on the table.
Are you even considering starting to offer cards from both companies? Some banks do it that way, typically they have Visa credit cards, Mastercard debit cards…
At Banca Creditas, we want to issue only debit cards in the future. We are not planning loans, after all, the credit card market in the Czech Republic is still shrinking in the long term.
And if you are wondering if we will start issuing Visa debit cards in addition to Mastercard debit cards, we do not expect to offer both brands. Would it bring something to the clients and the bank? In the past, there were separate payment terminals for accepting Mastercard, Visa or American Express cards – and not every merchant had them all available. But today’s terminals can accept all these cards, so people usually don’t care what brand they pay with.
There are also certain license costs associated with issuing cards. So it doesn’t make sense for us to offer both Mastercard and Visa cards in our portfolio. After all, this trend can also be seen in large banks.
A year ago, you told us that Banka Creditas wanted to enter Slovakia this year, but this has not happened yet. Why?
We didn’t manage this plan last year, we had a lot of work to do with the purchase of today’s Max Bank. It’s about priorities. However, it is still true that in the future we would like to have representation in one of the eurozone countries.
Bank Creditas announced a few days ago that Eva Collardová has become the CEO instead of you. But you remain the chairman of the board. The separation of these functions is unusual in banks.
Banka Creditas is growing quite dynamically, we have a number of subsidiaries, for example Max banka, Ekorent or Creditas Investiční společnost. I now want to focus primarily on the strategic and business development of the bank and its subsidiaries. Eva Collardová will focus on bank management and routine operations. We are certainly not the only bank that feels this way. For example, J&T also has a separate role of CEO and Chairman.
However, a woman in the management of a banking institution is an exception in the Czech Republic. Until now, they were only members of the board of directors, and even then in a significant minority against men.
It is so. In the Creditas group, we have two banks where the directors are women. Eva Collardová is the CEO of Banka Creditas and Ivana Pícková is the Chairman of the Board of Directors and CEO of Max banka. Both are very capable, in our group we don’t decide if someone is a woman or a man.
Olga Skalkova
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2023-07-12 03:05:00
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