Handlobank CEO says goodbye
The last hurrah for Handlobank architect and CEO Maciej Lebkowski took place before a high-profile crowd of his peers during EuroForum's Polish Banking Congress at Warsaw's Bristol Hotel last week.
Not only did he chair one of the key sessions, but he also gave a speech on how to create a greenfield retail banking operation. After the luncheon he kept one table of bankers after another hanging on his every word as he gave them the inside scoop on "corporate culture."
In this case, of course, he was talking about Citibank and Bank Handlowy executives. Citibank now owns more than 88% of Handlowy. And although it is committed to integrating its own Polish operations into Handlowy, and to keep Handlowy's name and stock exchange listing, it apparently plans to scrap the Handlobank brand and to rename the retail banking outlets with the Citibank name.
Lebkowski was the subject of the cover story of Gazeta Bankowa, distributed at the conference. But he won't be chairing any more meetings for Handlowy. He has left Handlobank and resigned from Handlowy as well (or was fired, according to some Polish papers). He said he would be at the bank until the end of the year, and is mulling over offers for overseas jobs but would prefer to stay in the country.
Many analysts and bankers had their own view of Lebkowski. Some said he was an extremely energetic innovator but high maintenance, someone who might not adapt to being reined in by new owners. Krzysztof Bledowski, chief strategist at Wood & Co., had gotten the impression that Handlowy CEO Cezary Stypulkowski had declined to go to bat for Lebkowski when the Citibankers moved in. Piotr Cyburt, president of the Rheinhyp-BRE mortgage bank, was resigned to Handlobank's fate: "I think it will become a Citibank operation."
So the banking seminar was a bittersweet occasion for Lebkowski. He went through the key points of the Handlobank saga: 24-hour, state-of-the-art call center staffed by 100; 85 branches as of September, well beyond the initial goal of 60; and 180,000 customers twice as many as expected.
In June he launched Handlonet, multifunctional web access to an array of financial information, and within six weeks "we had 8,500 active users via the internet," he said.
He skipped over one key point that was in his printed text: that "the bank has decided to significantly speed up and intensify the rollout plans."
Maybe yes, maybe no. He won't be in the loop when that decision is made, he said afterward; if the new Handlo-handlers do little, Handlonet could inch up to 12,000 users, but if they push, that number could go up to 20,000 by year's end.
There was only one question in public about the Handlobank changes underway. Someone asked him about "the impact after the merger."
"As you can imagine, it's very difficult for me to comment," he said. "The branches will be the way they are today but they will probably be Citibank (branches). For rational reasons, I'm sure you realize what these might be."
Lebkowski went to Handlowy in 1993 and later took on the job of developing the bank's retail base when it became clear that Handlowy's historic lock on handling foreign debt and major Polish enterprise financing was fast eroding.
"Not many activities Handlowy undertook in the 1990s succeeded," he said. "Handlobank did."
When Lebkowski began, BIG Bank Gdanski's mini-banking system Millenium was already in place (its chief has also just been let go by the bank's Portuguese majority owners). Lebkowski worked with Saatchi & Saatchi on a multi-million dollar advertising campaign, which, he told the bankers, made Handlobank the fifth-most recognized brand by July, after Polska Kasa Oszczednosci Bank Polski, Pekao, Bank Slaski and Lukas' financial services company. Handlobank was known by 64% of Poles questioned, and had nearly double the recognition factor of Millenium's 36%.
The ads, featuring a cute kid learning to talk, also "gave the bank a human face. And people liked it," Lebkowski said. Many of the new customers were young people who had no patience with their parents' pattern of waiting for hours at banks or post offices and liked having access to their cash via ATMs at any hour. Some of the newcomers made as little as $200 a month, half the average income.
And this highlights the policy schism. Citibank goes after high earners around the world, and Poland is no exception. It may not want those low-income folks who, Lebkowski said, might mean money for banks years from now when they're making more.
If Citibank/Handlowy get a tenth of the mid-to-high income Poles, that still might get them no more than 100,000 clients, he said. And, yes, the bank may make double-digit income off of their myriad financial dealings. But if you make 2% on 5 million lower-income Poles, in the end, that's more money, he said.
The new banking kid on the block is BNP Paribas' Ashish Misra, who is based in London in the equity research division and is covering banks in emerging markets.
He is keeping the international analysts now predicting a financial crisis here at arm's-length. It could happen, he concedes, with the zloty appreciating against the dollar, making it cheaper to import and giving Poles more to buy. Then "credit explodes because these guys are borrowing. And that's a recipe for disaster," Misra said.
But he gives high marks to central banker Hanna Gronkiewicz-Waltz for raising rates and refusing to say if she'll reduce them next year. "The central bank took a huge hit on its credibility last year when they reduced rates prematurely and inflation went through the roof," he said. "So to regain that credibility and appear hawkish (on interest rates) was politically astute."
Some of his London colleagues predict interest rate cuts next year. "Dream on," he retorts.
He's also watching the political changes, especially the union influence in government that led to higher import tariffs on food, "which must have raised inflation costs."
And he's looking hard at banking loan delinquencies in Poland, now at 13%. That's bad but far from the region's worst case.
"Just wait until it explodes in Prague, where 30% of the loans are non-performing," he said.
