Volksbank targets local, Maghreb markets and establishes local commercial presence

Newly appointed Volksbank Malta Managing Director Herbert Skok speaks to DAVID LINDSAY about the bank’s ambitious plans for the local market spurred by its onshore move, for which the bank was granted a licence just last November. Mr Skok’s appointment falls in line with the bank’s new strategic directions given his extensive experience in commercial and international banking

Österreichische Volksbanken is one of the largest banking groups of central Europe. Its Malta subsidiary, Volksbank Malta – first set up as an off shore bank in 1995 – made the move on shore just last year, with a considerable amount of success due to a number of innovative policies for private and corporate clients.
Herbert Skok’s appointment as Volksbank Malta’s Managing Director comes at an opportune moment for what was previously a lesser known, offshore version of what the bank is today and of what it expects to become in the future.
Since it was granted a licence to act as an onshore bank in November last year, the bank has set about reorganising its operations with a view to fine tuning and boosting its operations where necessary with additional staff and new premises.
Now diverting some 60 to 65 per cent of its resources to the local commercial sector, Volksbank Malta aims to firmly establish itself as a well-known local commercial bank by the end of the fiscal year.
But this commercial aspect is just one of the three prongs of Volksbank Malta’s business strategy – the others concentrating largely on business activities with the Maghreb states of North Africa and another focusing on the wider aspects of international business.
While Mr Skok’s history with Volksbank Malta is to date relatively short, his service with its mother company, the ÖVAG Group, is both long and wide-ranging.
Mr Skok joined Österreichische Volksbanken AG in 1980 as Global Head for Treasury and Security Business. Speaking about his career to date, Mr Skok says, "In line with my duties as Treasury Sector Manager I spent a lot of time abroad, visiting North America, Asia and nearly all parts of Europe, including the area of the former Soviet Union where we were successful in generating good business for the Group."
Apart from his experience in foreign exchange and securities trade, Mr Skok also has extensive knowledge in correspondent banking and international financing. He regularly attended special lectures and training seminars for application in the field of personnel management, and also acted as special trainer for the Österreichische Volksbanken Academy for the training of future business managers of the member banks.
In 1998, Mr Skok was appointed a Board Member of Volksbank Czech Republic, another subsidiary of Österreichische Volksbanken AG with offices all over the Czech Republic. Here he was responsible for treasury, securities department, research, loan administration, international desk and commercial administration. During his tenure, the number of branches within the Czech Republic was increased considerably in the major business areas.
Mr Skok has left Volksbank Czech Republic, where the Group now employs some 450 people in 20 branches across the country, to take up his new position as Managing Director of Volksbank Malta Limited - after being asked to take up the challenge by Group Chairman Dr Klaus Thalhammer.
Mr Skok explains how the Group was looking for someone with his experience, "He [Thalhammer] needed a person who on the one hand had a sound knowledge of all aspects of international business, while also being knowledgeable on retail business."
Since being granted its onshore licence, Volksbank Malta has begun reorganising its operations. Mr Skok explains, "With the move we have introduced a complete reorientation of the bank. First of all we decided to establish ourselves as a commercial bank in the whole sense of the phrase, but we also wanted to provide domestic local residents with all the banking products available on today’s market.
"Our second goal is to service the North African states and Turkey. In view of this goal we have taken on a new colleague, Barbaros Oclay, who is responsible for servicing the large deals in North Africa and Turkey and will be concentrating specifically on increasing this type of business.
"This, of course, will take a lot of work, but he is the right person for the job as he is already experienced – having served as vice-chairman of a large Turkish bank in the past. Dr Thalhammer was very astute to have brought a person with his knowledge of international business on board in Malta.
"Our third goal, meanwhile, is to strengthen other aspects of our international activities."
Volksbank Malta’s onshore move has necessitated a sweeping reorganisation of the bank, with a restructured organigram and premises being sought.
Mr Skok explains, "We are also building our own internal audit and risk management teams, all of which used to be carried out by our Viennese colleagues who would visit Malta frequently to carry out audits and to compile reports. However, now that we are building our business to such an extent, decisions will be able to be taken quicker and these teams will have to be based in Malta.
"We are also in the process of changing our premises, which has been approved by the board and the head office in Vienna. We will remain in Sliema but we are looking for new premises that will render Volksbank more visible, such as a location on the waterfront or Strand. It is important that we are in a more visible place where people will familiarise themselves with us, now that we are acting as a commercial bank. New, smaller branches are also planned for other localities such as Valletta and Sliema.
Volksbank’s competitors cannot help but notice the Bank moving forward in big steps, but each step requires a good deal of preparation, with information technology being one example.
Mr Skok explains, "Our IT technology is perfectly suited to the operations we have carried out in the past, but with our increasing operations we will have to make a large capital investment in this area.
"But one main advantage, as in many other areas, is that the Group as a whole has a wide range of experience in the field. Our other outlets in Central and Eastern European countries are using the same systems we are, so the Group is already informed about what to do, when to do it and where to get it. This is one small example of how we can utilise the extensive knowledge and experience of the Group."
Volksbank has its eyes firmly fixed on the local market. Mr Skok explains, "All the traditional banking products offered by the other banks in Malta will have to be introduced and those we don’t have will have to be implemented. But you have to keep in mind that we received our onshore licence just last November so we have to have some time to set these things up.
"However, our range of term deposits and savings accounts are very popular with our international and Maltese customers. We have decided that the bank will now also offer these products in Maltese Liri. Being located in Malta, it is logical that we should also offer our wide range of services in the local currency. In the near future, the Bank will announce new products such as a home loan scheme with some attractive features which we are sure will find favour with Maltese customers."
Volksbank Malta Ltd started introducing its new products and services in the local currency by offering term deposits in local currency as from 1 September 2003.
"We are very keen to be seen as a local bank with the backing, knowledge and experience of an international group. We are certain that we can offer good terms for domestic and business customers in all areas of banking operations.
"We are very confident that Maltese customers will find us as a viable alternative for their banking and investment requirements. With a share capital of EUR167 million, the bank has a solid base from which to expand its operations. With the support and experience of our local staff as well as the backing of Volksbank in Austria, we have all the resources to offer our Maltese customers a wide range of local and international banking products."
What does Mr Skok see in the next year of operations for Volksbank Malta?
"Generally speaking we see the further development in serving the North African states, which are well covered with good deals already on the books. Our other international business should grow along the same lines as well.
"But we have put most of our resources, some 60 to 65 per cent, on our domestic services so that we truly become a Maltese Volksbank so that by the end of this financial year we will be known as a commercial bank operating on the local market."