Pál Kovács, CEO at Crnogorska Komercijalna Banka (CKB)

Innovation Promoter, Stability Guarantor

We see our leading position as an additional responsibility towards clients, the market and the Montenegrin economy. We remain a guarantor of stability, an innovator and a promoter of changes in all segments. Montenegrin economy will benefit from this acquisition

Following the signing of an agreement on the purchase of Société Générale Montenegro, 2019 has become a historic year for CKB. In this interview, company CEO Pál Kovács talks about MFIC recommendations and CKB’s strategic challenges and plans, as well as future trends in the banking sector and on the financial market of Montenegro.

This year sees the MFIC celebrates its 10th anniversary. What is your vision for the next decade?

– Summarising the past ten years, I really feel proud and satisfied because we did a lot within the MFIC. I see the shortening of the transition period with the creating of a new, dynamic investment environment as a particularly valuable contribution and as being in the mutual interests of both foreign investors in Montenegro and the Government of Montenegro and its bodies.

Today, we don’t only have a critical attitude towards the environment and a need to merely point out the challenges, but rather – as active participants, together with all relevant players – we provide advice and recommendations and share examples of good practice. We are very satisfied to have partnerships with all relevant people, especially the President and Prime Minister of Montenegro, but also other economic and business decision-makers.

Our vision remains the same over the next decade – we will be initiators of good practises creators of the investment environment, a stronghold of stability and a reliable partner to the state in developing new opportunities in all sectors of the economy.

How do you see the business environment and its impact on the banking sector? Which of the MFIC White Book’s recommendations for further improving this environment would you highlight in particular?

Pál Kovács– The business environment is characterised by the application of modern regulations and standards, but infrastructure modernisation and strengthening in the EU accession process must be orientated completely towards the preservation of confidence in, and the stability of, the banking sector.

Our recommendations are always aimed at improving the legal framework and financial culture, additional and concrete measures – from deposit protection, impact studies and stress tests for risk assessment, to cooperation with regulatory bodies in measuring indicators and reporting standards.

How do you see the performance of your bank under conditions of the expected relative slowdown in economic growth?

– Montenegro has for more than two years been one of the fastest-growing economies in the region and beyond. After the completion of major infrastructure projects, a slight – albeit expected – a slowdown of economic growth is set to follow. Nevertheless, with the stability and additional strengthening of the financial sector, and completed infrastructure serving regional development, we have all the prerequisites for the further expansion of investments in tourism and the hotel industry, energy, agribusiness, SMEs and other service activities. Our credit support will be directed towards these sectors.

Our vision remains the same over the next decade – we will be initiators of good practises, creators of the investment environment, a stronghold of stability and a reliable partner to the state in developing new opportunities in all sectors of the economy

I always like to point out very attractive credit lines for support to smaller companies based on EU guarantees, commercial factoring as a form of support to trade, and other sectors that generate additional liquid funds for the Montenegrin economy in a way that has long been used in the countries of the European Union. We have numerous opportunities to make Montenegro’s economic environment more dynamic and attractive through the support of good projects in the economy and the concept of project and investment financing.

On the last day of February this year, you announced the purchase and start of the acquisition process for Société Générale Montenegro? You then received, during May, the approval of the Central Bank of Montenegro. What will be the market consequences of this process?

– During the last ten years, the OTP Group’s position in Europe has strengthened in all segments. We finished last year by achieving an ambitious profit target as much as a billion euros. In the previous year and a half, the OTP Group has been expanding in the region of Central and Southeast Europe. We finalised numerous acquisitions and opened on the markets of Albania, Moldova and Slovenia.

By merging our two banks in Montenegro, we will additionally strengthen an otherwise stable banking sector. However, strengthening our market share is not based solely on quantitative parameters, rather it is based above all on qualitative growth. 

Pál Kovács

We base market opportunities on four basic principles of the OTP Group – stability, liquidity, innovation and profitability. Business operations based on these principles are also applied successfully and fully in Montenegro. We are slowly entering the process of merging the two banks, which means additional investments in research and development, the identifying of new market segments, as well as a stable framework for achieving our vision.

We want to keep the position of promoters and leaders in innovation and digitalisation, in order to satisfy our clients and to be a pioneer in new products and services in Montenegro, but also in the region of Central and Southeast Europe. Our new banking concept is based on the application of innovative new solutions, but primarily on maintaining a traditional and recognisable relationship with clients. Led by this business philosophy, I have no doubt that this acquisition in Montenegro will create multiple benefits and represent a stable partner to clients, citizens and companies, and that this strong bank will be a reliable partner to the Government and the state.

During the last ten years, the OTP Group’s position in Europe has strengthened in all segments. We finished last year by achieving an ambitious profit target of as much as a billion euros. In the previous year and a half, the OTP Group has been expanding in the region of Central and Southeast Europe

You recently became the recipient of the award for the Best Bank in Montenegro for 2019 from prestigious financial magazine Global Finance. And you recently also received an award from the President of Montenegro as the most innovative company for 2019 for CKB GO – the service of the new generation of mobile and internet banking. How important are innovations and digitalisation today when it comes to successful positioning in the banking sector?

– This prestigious Global Finance award for the best bank was received by a bank from Montenegro for the first time. I’m overjoyed that, with this acknowledgement, we’ve become a member of the club of the most respectable banks in Central and Southeast Europe. This award is recognition for the results achieved, which we base on exceptional relations with clients and the local community.

Likewise, it is a special honour to be the laureate of the Chamber of Economy of Montenegro for 2019 and the winner of this prestigious award for the most innovative company.

I am proud that the award came for the CKB GO service, and this is certain confirmation and the result of great efforts exerted on the introduction of the most innovative internet and mobile banking service, not only in Montenegro and the region but also further afield.

This service is simultaneously also one of the most used banking applications in Montenegro, the backbone of, and the first step towards, the full digitalisation of our business operations. As in all other spheres of social life, innovation and digitalisation have a great impact on banking and finance. By operating within the OTP Group, we have the privilege of testing numerous innovative solutions in Montenegro even before other members of the Group.

By developing a digital concept, we are ready to respond to the most demanding customer needs, create new market opportunities and increase customer satisfaction continuously. I always emphasise that the development and application of modern digital solutions requires a lot, and primarily an excellent product, good marketing, readiness for implementation, and a dedicated and creative team. We at CKB, on the road to achieving our strategic goal of even greater influence and leadership in the domain of innovation, possess all of the aforementioned qualities. 

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