Philippe Heim: Upbeat on emerging Europe


Lucy Fitzgeorge-Parker
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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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In late February, Société Générale revealed plans to sell its subsidiaries in the Republic of North Macedonia and Montenegro to OTP. The announcement marked the end of a three-year process that has seen the French group exit nine markets in central and eastern Europe.

That leaves the bank with three operations in the region: Komercni Banka in Czech Republic and BRD in Romania – both of which rank third by assets in their respective markets – and Rosbank in Russia.

Philippe Heim, Societe Generale_160x186

The three subsidiaries are under the aegis of Philippe Heim, Société Générale’s former CFO, who last year was appointed deputy chief executive with responsibility for international operations.

He is upbeat on the outlook for emerging Europe.

“Economic conditions are pretty good across the board,” he says. “GDP growth in Czech Republic and Romania has moderated slightly from the highs of 2017 but is still around 3%, while the normalization of the Czech interest rate curve means margins are increasing at a double-digit rate.

“Growth in Russia is more subdued but still solid at around 1.5% and we are leveraging on the fast growth of the banking market, especially on the retail side.”


Outstanding loans at Société Générale’s Russian operations grew by 6% last year, while return on equity was well into double digits – an impressive achievement given that the first half of this decade was spent cleaning up Rosbank, the lender bought by the group in 2006.

“It took us quite a while to integrate and turn around our platform in Russia,” says Heim. “We had to move the centre of gravity from Siberia to the Urals and Europe, reduce the number of branches, upgrade the IT platform and improve compliance. Today we are pretty happy with the results.”

While Société Générale’s market share in Russia is relatively small, at around 1.5% of total assets, it remains the leading foreign-owned player in the country and one of the largest private-sector banks.

State domination of the sector has recently increased with the nationalization of Otkritie, B&N Bank and Promsvyazbank. Heim is undismayed, however, noting that Russian policymakers have been working to level the playing field in the industry.

“The central bank of Russia is mindful of the need to maintain a sound level of competition,” he says. “For example, they have decided to develop biometric tools which can be used by the whole Russian market, to avoid a situation where technology would be imposed by the market leaders.”