Zdenek Turek: The specialists
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As part of Euromoney's 50th anniversary coverage, we profile some of the biggest names that we interviewed for our May CEE focus.
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When Zdenek Turek left the central bank of Czechoslovakia in 1991 to join Citi’s newly opened Prague office, the local banking market was almost non-existent.
“There was no customer service to speak of, and know how was very low when it came to banking products,” he says. “Culture, risk management – everything had yet to be built.”
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Of course, early pioneers such as Citi did not have the Czech market to themselves for long.
“The decisive moment was when the large state-owned banks were sold to foreign players like Erste and Société Générale,” says Turek.
“Lenders which had been lagging in quality of service became forceful competitors, and the rest of the market that didn’t make acquisitions had to up their game and build scale, or pull back.”
Citi responded to the challenge. Over the following two decades it built up successful corporate banking businesses across central Europe, serving multinational and local companies. Initially, inward investment was concentrated in the manufacturing sector.
Shift in focus
More recently, however, rising labour market pressures have prompted a shift in focus.
“The simpler jobs are moving further east, or falling to automation and new technologies – but that’s good,” says Turek. “You don’t want central Europe to be forever an assembly line for industrial companies from the west.
“The new wave of investment is more knowledge-based. Companies from western Europe and beyond are establishing call centres and treasury centres across the region. It doesn’t attract the same attention as Jaguar opening a new factory, but in the long run it’s better because it’s more granular and more resistant to the economic cycle.”
It also offers opportunities for global banks such as Citi.
“These centres require a very specific set of products – cash management, trade and trade finance, foreign exchange and markets,” says Turek.
The increasing appetite of central European companies for international expansion also plays to Citi’s strengths, as does the recent emergence of e-commerce as a growth sector in the region.
“Some of these companies are expanding very fast,” says Turek. “They want to sell around Europe and worldwide, and they want to minimize the cost of financial management because they are focused on new products and innovation.”
He believes this type of specialization – by sectors and products – is essential for banks in central Europe today.
“Banks need to think really hard about where they can add value,” he says. “I don’t think everyone can do everything anymore.”