Garanti Bank tunes up for the Millennials
What are Garanti Bank Romania’s main 2015 achievements?
In 2015, Garanti Bank increased its market share and it is currently the 10th bank in the local system. Last year, the bank also increased its net profit, reaching 65.3 million lei.
Its loan volume reached a total of 6.74 billion lei in 2015, accounting for a 15.7 per cent increase as compared to 2014. Corporate loans recorded the biggest growth, gaining 28 per cent, while SME lending rose by 8.6 per cent. In turn, retail lending advanced by 10.8 per cent. Moreover, the bank’s deposits reached a total of 5.73 billion lei, representing a 40 per cent increase year-on-year.
The number of customers also went up by around 10.2 per cent in 2015, compared to the previous year, reaching over 350.000 individuals and companies.
What areas of business is Garanti Bank Romania relying on to secure its growth in 2016?
Our strategic objective is to develop, every year, all our business lines – Retail, SME, Corporate – in a balanced way. Also, in order to grow and keep a top position in the banking system, we will continue to invest, as we have done so far, in innovation. At the same time, we will focus more on making banking more accessible and compatible with digital lifestyles, and on continuing to offer tailor-made products to our customers.
What new products and services will be added in 2016 to strengthen the bank’s position in the market?
The new technologies have already changed our lifestyle and our behavior. For banks, these changes meant the need to adapt to a new type of consumer, part of “iGeneration” known as Generation Y or The Millennials. They are connected to their social network accounts 24/7, they have access to a considerable amount of information, and their need for mobility and flexibility is high. As such, since the new type of consumer likes to have everything accessible, just a phone swipe away, this year we are launching our dedicated mobile banking application. The application allows customers to perform banking operations using their smartphones.
How will you adapt your strategy to the new types of consumers in 2016?
The new type of consumer is part of the Millennial generation, young people born after 1980, digital natives who are in the habit of staying connected to their social network accounts at all times, and have fast access to any kind of information. This new generation has given a new shape to the financial institution - customer communication, leading to what is now called intelligent multi-channel banks. This means that nowadays banks need to use different channels to get to their customers. Garanti Bank, for example, uses social media to communicate with this new generation. Our Facebook page has exceeded 270,000 fans and offers rich content to its followers as well as fast services like iLoanU - a platform that allows customers to send their loan requests via Facebook.
In a previous interview with Business Arena you mentioned a strong consolidation trend in the Romanian banking system. What are your expectations for 2016 in this regard?
The consolidation of the Romanian banking sector started in 2015, so this year, the process will continue. As such, since the system needs more assets in order to sustain a large number of players, in the following years we might see bank exists from the market, mergers and/or portfolio acquisitions. At the same time, within this consolidation process, banks will need to improve their structural efficiency in order to maintain a strong position in this industry, meaning restructuring their organization so that they can best serve their customers.
On the other hand, the banking sector will also focus more on the digitization process, improving and extending their services towards creating a digital ecosystem where mobile is a keyword.
What are the main challenges that your bank had to deal with in 2015 and what are the expected challenges in 2016?
In 2015, banks managed to surpass one of their biggest challenges, the non-performing loans. The challenge for the next period will be for the Romanian banks to restructure their organizations in order to increase their efficiency as well as their profitability. This is a challenge, but also an opportunity for banks to innovate, optimizing their products and services as well as streamlining the customer experience.
What are your expectations with regard to Romania’s economic prospects in 2016?
The VAT cut and wage hikes will stimulate Romania’s economic activity to keep moving on an upward trend in 2016. We also expect services (especially IT&C and the real estate sectors) to remain the largest contributors to GDP growth.
Inflation will most probably settle below the lower band of the targeted variation interval, at 1.5 - 3.5 per cent. This creates the perfect context for lending to improve even more in 2016, as interest rates are expected to stay on historically low levels.
What are Garanti Bank Romania’s main targets in 2016?
In 2016 we will follow our long-term strategy of keeping in tune with our customers’ needs and maintaining a healthy and well-balanced portfolio in all our business lines (Retail, SME, Corporate). At the same time, we will continue to diversify our products and services in order to respond to the demands of a new digital generation of customers, focusing on extending to mobile.
In 2015, Garanti Bank increased its market share and it is currently the 10th bank in the local system. Last year, the bank also increased its net profit, reaching 65.3 million lei.
Its loan volume reached a total of 6.74 billion lei in 2015, accounting for a 15.7 per cent increase as compared to 2014. Corporate loans recorded the biggest growth, gaining 28 per cent, while SME lending rose by 8.6 per cent. In turn, retail lending advanced by 10.8 per cent. Moreover, the bank’s deposits reached a total of 5.73 billion lei, representing a 40 per cent increase year-on-year.
The number of customers also went up by around 10.2 per cent in 2015, compared to the previous year, reaching over 350.000 individuals and companies.
What areas of business is Garanti Bank Romania relying on to secure its growth in 2016?
Our strategic objective is to develop, every year, all our business lines – Retail, SME, Corporate – in a balanced way. Also, in order to grow and keep a top position in the banking system, we will continue to invest, as we have done so far, in innovation. At the same time, we will focus more on making banking more accessible and compatible with digital lifestyles, and on continuing to offer tailor-made products to our customers.
What new products and services will be added in 2016 to strengthen the bank’s position in the market?
The new technologies have already changed our lifestyle and our behavior. For banks, these changes meant the need to adapt to a new type of consumer, part of “iGeneration” known as Generation Y or The Millennials. They are connected to their social network accounts 24/7, they have access to a considerable amount of information, and their need for mobility and flexibility is high. As such, since the new type of consumer likes to have everything accessible, just a phone swipe away, this year we are launching our dedicated mobile banking application. The application allows customers to perform banking operations using their smartphones.
How will you adapt your strategy to the new types of consumers in 2016?
The new type of consumer is part of the Millennial generation, young people born after 1980, digital natives who are in the habit of staying connected to their social network accounts at all times, and have fast access to any kind of information. This new generation has given a new shape to the financial institution - customer communication, leading to what is now called intelligent multi-channel banks. This means that nowadays banks need to use different channels to get to their customers. Garanti Bank, for example, uses social media to communicate with this new generation. Our Facebook page has exceeded 270,000 fans and offers rich content to its followers as well as fast services like iLoanU - a platform that allows customers to send their loan requests via Facebook.
In a previous interview with Business Arena you mentioned a strong consolidation trend in the Romanian banking system. What are your expectations for 2016 in this regard?
The consolidation of the Romanian banking sector started in 2015, so this year, the process will continue. As such, since the system needs more assets in order to sustain a large number of players, in the following years we might see bank exists from the market, mergers and/or portfolio acquisitions. At the same time, within this consolidation process, banks will need to improve their structural efficiency in order to maintain a strong position in this industry, meaning restructuring their organization so that they can best serve their customers.
On the other hand, the banking sector will also focus more on the digitization process, improving and extending their services towards creating a digital ecosystem where mobile is a keyword.
What are the main challenges that your bank had to deal with in 2015 and what are the expected challenges in 2016?
In 2015, banks managed to surpass one of their biggest challenges, the non-performing loans. The challenge for the next period will be for the Romanian banks to restructure their organizations in order to increase their efficiency as well as their profitability. This is a challenge, but also an opportunity for banks to innovate, optimizing their products and services as well as streamlining the customer experience.
What are your expectations with regard to Romania’s economic prospects in 2016?
The VAT cut and wage hikes will stimulate Romania’s economic activity to keep moving on an upward trend in 2016. We also expect services (especially IT&C and the real estate sectors) to remain the largest contributors to GDP growth.
Inflation will most probably settle below the lower band of the targeted variation interval, at 1.5 - 3.5 per cent. This creates the perfect context for lending to improve even more in 2016, as interest rates are expected to stay on historically low levels.
What are Garanti Bank Romania’s main targets in 2016?
In 2016 we will follow our long-term strategy of keeping in tune with our customers’ needs and maintaining a healthy and well-balanced portfolio in all our business lines (Retail, SME, Corporate). At the same time, we will continue to diversify our products and services in order to respond to the demands of a new digital generation of customers, focusing on extending to mobile.
The interview is also available in our print edition.
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