UniCredit’s wide reach
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"It’s true that we have had a lot of changes over the last few years and we also had changes before the HVB and UniCredit deal, because we also had the big merger of Bank Austria Creditanstalt. But in the end I would say that our clients in the region are the clear winners of this reorganization"
Erich Hampel, UniCredit |
It is 18 months since Italy’s UniCredit bought Germany’s HVB for €19.2 billion. While the transaction was driven by UniCredit CEO’s Alessandro Profumo’s desire to build a powerful European franchise, the consequences for Central and Eastern Europe were no less profound. Today UniCredit is by far the biggest group in the region in terms of total assets, revenues and branches. It is twice the size of its closest competitors and its network spans 17 countries.
By the end of this year the various subsidiaries of UniCredit, HVB and Bank Austria Creditanstalt (BA-CA) should be integrated under the UniCredit banner. The biggest outstanding issue is in Poland, which, at the request of the local authorities, is run separately from the rest of the group’s Central and Eastern Europe franchise. The group has two banks in the country – Bank BPH and Bank Pekao. UniCredit has to sell 200 BPH branches, which should be complete by the second quarter, before it can continue with the integration. Elsewhere, UniCredit is finalizing the integration of its businesses in Bulgaria and Romania and the Czech Republic and Bosnia and Herzegovina.
Whether clients will remain loyal to a business that has undergone so many guises remains to be seen (remember Bank Austria and Creditanstalt used to be separate outfits. In 1997 Bank Austria bought Creditanstalt and then three years later HVB acquired BA-CA). One consistency is that BA-CA, which first entered the region in 1975 in Hungary, is the dominant influence within the Central and Eastern Europe structure. The CEE business excluding Poland is run out of Vienna (the Polish unit is controlled by UniCredit in Milan) and is headed by Erich Hampel, a 10-year veteran of Creditanstalt.
Hampel, whose official title is head of UniCredit’s CEE division and CEO of Bank Austria Creditanstalt, talks to Sudip Roy about the group’s strategy.
Did Andrea Moneta [head of Poland markets division and member of the BA-CA management board, who announced his departure in April] leave because he felt sidelined?
No, not at all. He’d been working first as integration officer and then within the CEE division since the merger [between UniCredit and HVB] and is now looking for a new challenge. His successor will be Federico Ghizzoni, who has worked at UniCredit for a long time. He was running Koçbank in Turkey for many years and oversaw its merger with Yapi Kredi. He’s a very experienced banker.
Is there a risk of further senior management departures?
No, I don’t think so.
But BA-CA is the dominant influence within the CEE structure. Does that mean more people from a UniCredit background will leave?
The CEE business is run out of Vienna but we have a mixed team of Austrians, Italians and CEE colleagues here. Also, Federico Ghizzoni is an Italian with a UniCredit background.
How would you describe UniCredit’s strategy in central and eastern Europe?
For us, the CEE is a real growth market and a very important market for both sides, for UniCredit and for Bank Austria Creditanstalt. We have a very longstanding presence in the region. Actually Creditanstalt, which is one part of the Austrian side, has the longest history of any western bank in CEE. We started our operations in Hungary back in 1975, so we have more than 30 years’ experience. And in Austria Creditanstalt was founded in 1855, and from that time the bank has focused on financing eastern European countries, so we have been pioneers in the region. The combination of UniCredit and Bank Austria Creditanstalt gives us a huge competitive advantage. Now we can offer our clients by far the largest network in terms of countries and in terms of branches, and this network does not consist only of small offices but of the largest local banks in their individual countries.
How many branches do you have now in the region?
We have about 3,100 offices. Just to give you some more figures, we serve 24 million customers and we have total assets in the region of €114 billion. So we are twice as big as our next competitor.
How would you define your strategy, though?
Our main strategic goal is to strengthen our competitive position in the markets where we operate, so consolidating the number one position. We want to balance revenue growth and sustainable profitability.
Is being number one or number two in each market the most important goal for you?
We are already number one in four of the countries and in six countries we are among the first five. So our goal is to be between the number one and the number five in all these markets.
In terms of total assets?
In terms of total assets and revenues. But what is also very important for us is clear leadership in customer satisfaction. So one of our main targets is to serve all our customers, both retail and corporate, with state of the art products in all of these countries.
Where does the strategic emphasis lie at the moment? Is it more on the retail side or on the corporate? And how are you trying to build the investment banking business?
It depends on the country. We are very strong in corporate business in many countries, but we also want to be a strong competitor in retail banking. This leads to branch expansion programmes in Russia, for example, or in Hungary.
One very important strategic asset is our global business lines, and investment banking is one of these global business lines. And we offer investment banking services, not only in our three home markets of Austria, Germany and Italy, but also in all the CEE countries.