Wıth a year left to
complete its restructuring programme, Poland’s 11th-largest bank by
assets, BPH, is set to compete with international banking giants
such as Santander and Raiffeisen. Grzegorz Jurczyk, deputy
president of GE Money subsidiary Bank BPH, tells Duygu Tavan about
the bank’s growth strategy.
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Last year was a busy 12
months for Bank BPH. Besides rebranding and consolidation efforts,
out went unprofitable product lines such as sales finance and the
sale of auto loans through intermediaries. In came fresh product
offerings, such as the Lokata Pracowita deposit and Sez@m Direct
accounts. In addition, BPH began to replace its magnetic strip card
portfolio with contactless credit cards deploying Visa’s payWave
payment technology.
But with another year to go
to achieve its post-merger targets, BPH has great ambitions for its
retail banking business in 2011.
Grzegorz Jurczyk, BPH’s
deputy president responsible for sales, retail banking, marketing
and product management, told RBI the bank’s key strategies
for the year.
Although the macroeconomic
situation has improved since the peak of the economic crisis and
GDP grew by 3.8% in 2010, fierce competition from strong
international banks may lead to further consolidation of the Polish
banking sector.
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By GlobalData“It is still difficult to
stand out in the Polish market with a breakthrough offer as far as
individual products are concerned. So we focus on customer service
quality and a transparent offer. We have made our market offer
simpler and more attractive to customers,” said Jurczyk.
With the re-engineering
strategy introduced in May 2010, the bank wants to grow its
footprint both in terms of branches and earnings. Core product
segments are personal loans, credit cards, current accounts and
deposits, plus SME and mid-cap corporate banking.
“We will play to our
strengths, invest where we are competitive and accelerate. In 2011,
our focus is on growing our profits by developing high potential
markets and creating a high quality portfolio. Our market offer has
become more attractive to customers, and this will
continue.
“BPH is on the way to
becoming a universal bank. For us, this means further development
of the retail segment, in particular credit cards and current
account sales.”
As of year-end 2010, the bank
had 1.5m retail banking customers. Current account deposits rose by
30% from the previous fiscal to PLN4.2bn ($1.5bn). Total retail
deposits soared by 37% to PLN8.4bn.
In the current account
segment, BPH introduced a new personal account titled Kapitalne, or
Capital, at the end of January for which customers pay PLN9.99 a
month.
“The name of this product is
a word play – Capital in Polish means great. And it is our
customers – they get a comfortable account, which they can use with
no additional costs. A Capital account owner can also open a
savings account with a higher interest rate than a standard one,
subject to no additional fees.
“The new account is
accompanied by a free of charge assistance package, which is the
broadest on the Polish market. It is the first account in the
family of new accounts we plan to launch.”
He said that the bank will
upgrade and extend its Capital account family throughout the year
to reach its target of 100,000 new account openings by
year-end.
At the end of 2010, the bank
maintained 650,000 current account customers.
In the credit cards segment,
growth is based on three pillars: product, distribution and
portfolio management.
“Currently, we have a
competitive offer with a wide range of products dedicated to all
customer segments, including premium cards and usage rewarding
programmes based on a money back mechanism, which are very popular
among customers.
“We observe an enormous
potential in increasing customer loyalty through intense engagement
activities.”
“We continue to enhance our
offer to make sure products’ value proposition reflects customer
expectations, especially in the area of rewarding usage, as well as
perceiving the product as a convenient and safe payment
tool.
In terms of branches, BPH’s
growth ambitions are less competitive: the bank plans to add 20 to
its existing 285-units strong branch network by mid-year, to be
located at locations with high business potential.
But Jurczyk promised that the
new branches will look considerably different and operate in a new
and innovative format to enhance the bank’s value proposition and
offer an improved branch experience for customers.
He said that the bank will
reveal further details later in 2011.
In addition to investing in
its branch channel, the bank also plans to replace the majority of
its ATMs, issued by Wincor Nixdorf, with new technology.
In the credit cards segment,
Bank BPH is planning another contactless credit card portfolio
using MasterCard’s PayPass scheme in 2011. It is already a strong
player with a 12% market share of cards in circulation.
In 2010, BPH issued 282,000
new credit cards, taking the total number of cards in circulation
to 1.14m.
Jurczyk said that contactless
technology was becoming a standard in the Polish market.
“Speed of product development
and innovation is going to be crucial. And since the prices of
banking services tend to even out, banks increasingly compete on
customer service.”
Part of improving customer
service quality will be the consolidation of GE Money Bank’s GEM24
internet banking platform with BPH’s Sez@m and a revamp of the
mobile banking platform. Jurcyzk said that the unified system will
go live in 2011.
Looking ahead, Jurczyk is confident the bank, which merged
with GE Money Bank in 2009, will return to profit in
2011.
