A re-focussing and consolidation process is currently underway in one of Malta’s largest banks. This was the message put across by the Chairman of the BOV Gordon Cordina and the bank CEO Rick Hunkin. Cordina said that the bank was going through a radical transformation process with an aim to consolidating the growth strategy of the bank.
Hunkin underlined the strong reserves of the bank with over €12bn in deposits and some €8bn in surplus funds. With reserves as a strength, the bank however was labouring under an archaic staffing structure which was not rendering much to the profitability of the bank or to the job satisfaction of the employees. In comments to newsbook.com.mt, Hunkin said that the bank was investing heavily in change management and in fostering a two-way dialogue to work and build on successes and to nip incipient failures in the bud.
Future-proofing the bank, said Hunkin was no chimeric mirage. Prodded by Newsbook he said that the Bank will be working with the flow and development of the Maltese economy and finding profitable niches in those areas. He said that the bank had, for some years now, distanced itself from speculative lending and it had not suffered for that decision.
One of the main drives which the bank seems set upon is that of increased digitsation and increased use of the customer information which such a drive will bring to the Bank. To this end, the bank, said Hunkin will be recruiting some 200 newbies with an emphasis on technological skills as well as embarking on an extensive re-training exercise. He added that profitable segments need to be identified and administrative activities need to be simplified and automated so that the client better served and staff more satisfied and competent at their work. He said that while the ‘slash and burn’ option on branches would not be adopted, the bank was envisaging that some branches could become more specialised. This aim at making branches pay goes hand in hand with the Bank’s vision for a society less dependent on cash and cheque transactions. Hunkin said that the never-ending queues cash cheques need to be brought to a bare minimum since this cost can be better utilised into products which the customers need. Among these, Hunkin included more time to advise customers and better use of digital banking.
Dealing extensively with the issue of correspondent banking, Hunkin said that while of concern, the issue was not one which could cripple the bank and that alternatives exist. He said that the current correspondent bank Raifeissen, will cease its operations with BOV in March 2021 and BOV is ‘hopeful/confident’ that by that time alternatives will be in place.
The issue of national reputation was also touched upon, particularly when Newsbook asked given the history of the bank. Hunkin said that the bank had a 25% government shareholding and, apart from that he had had no political input during his tenure. He added that the issues raised by Moneyval were of concern and, in a conservative milieu such as is banking, issues such as marijuana, bitcoin and Moneyval tned to make bankers jittery. However, said Hunkin, the bank had made a huge investment in anti-money-laundering reporting and this was now increased by 15-20 times over the previous year’s levels.
Covid and its impact inevitably featured in the interview. Hunkin said that it had a huge impact on profitability and the focus of the bank was on helping customers. The bank set up a multi-disciplinary Incident management team to manage health and safety. He said that the bank extended close to €253 million in loans to 371 business customers. With regards to the loan moratoria Hunkin said that 73% of these were given to retail.