UniCredito's Albenga delivers lively talk on banking
Mauro Albenga had an unenviable task. He had been invited to talk about how the Italians were shaking up Bank Pekao. That's not exactly how it was billed. The EuroForum two-day conference on "The Development of Polish Retail Banking" had slated UniCredito Italiano's big-shot COO, Paolo Fiorentino, to talk about "key elements of successful merger integration."
Albenga was his shake-'em-up stand-in, a marketing man who said repeatedly he didn't like to talk about such things as cost controls and streamlining back-office procedures. But he did, and with a combination of candor and diplomatic finesse. He was skillful in drawing parallels between Poland and Italy that might lessen the paranoia here about what a giant foreign partner might do in restructuring one of Poland's largest banking groups.
Bank consolidation is underway everywhere, Fiorentino said. UniCredito itself was formed only two and a half years ago and has been putting together a group of six Italian banks and now Pekao. In Italy, he said, identifying ways to consolidate and merge functions of those banks (while keeping the individual names and "brands" for each) took four months.
Fiorentino talked about pride pride by those who felt they'd been pretty good at what they'd been doing. On human-resource issues he said that, "no one likes change. It is very normal to feel uncomfortable, to think that someone else is coming over you ... I've been in four different banks and my advice is, if you acquire another bank, you have to be extremely careful."
But Albenga didn't mince words, either. "Consolidation is a way to make more money and to reduce costs." Those are the over-arching priorities for them, here as well as in Italy. He didn't say, and wasn't asked, how many employees there were in the six banks brought into the UniCredito Group. The Pekao group has 24,000 people and Albenga said he was astounded to find that some branches had as many as 200-250 people in them.
"I think that is a little too big," he said. In addition, you "have to be more proactive," especially in going after "the affluent market here, which I understand is growing very rapidly," to better "recognize higher income people."
That caused a buzz in the room. Maybe it's a holdover from socialist egalitarianism but talking out loud about catering to rich folks just isn't done here. At least in public, at least by Poles.
Albenga said when he asked branch managers the week before who their salespeople were, "It wasn't easy for some of them to identify even the concept of a salesperson." Then he gave an example, which brought another buzz: "If someone comes to me and asks me to help him make an alimony payment to his former wife it happens that's a service."
UniCredito will import its private-banking concept here, form a new entity to work on increasing financial services sales and in the banks themselves work on "putting back-office (resources) to the front office."
"I don't know why someone who has zl. 200,000 has to wait two hours in line," Albenga said. And this time, there was rueful laughter of recognition from the dozens of bankers in the room. "There has to be a differentiation of service not because he's more special but because I can make more money from him. You have to be brutal on this," he said.
UniCredito is in the process of "forming specific task forces. After that it will be easier to understand where we have to go to increase revenue and reduce costs," he said. These will come with targets, timetables and "an overview from the top management. Without sometimes very uncomfortable pressure from the top, the process doesn't go forward."
He also said that, in the long term, the association of UniCredito with Pekao would be "of value to Pekao." He then used the example of Czech car maker Skoda "which in Italy didn't have that great of an image. But it was acquired by VW and at least in Italy they started a new advertising and marketing campaign," promoting that VW-Skoda link, which he said was very successful.
How did Albenga fare in this bath-of-fire encounter?
IBM's banking finance specialist Grazyna Kusmierz, gave him a thumbs up: "I liked him very much. He was honest," she said.
Euronet's Managing Director Janusz Diemko said he "didn't think he revealed that much." His account management director, Elzbieta Samplawska, agreed.
However, HSBC senior bank analyst for emerging Europe, Jean-Pierre Lambert, who moderated the session, was impressed. It was a skillful, diplomatic presentation, he said.
