By Rudina HOXHA
Editor in chief of Follow Business Albania
The Hungarian billionaire businessman, banker, investor, philanthropist, Dr. Sándor Csányi, who is the Chairman and CEO of OTP Bank, the leading retail bank in Hungary and the flagship of OTP Group, one of the largest and rapidly growing financial groups in the CEE Region, sat down with Follow Business Albania to talk about OTP Bank Albania, its mission, vision and plans in a near and far future.
“We see our bank as a strong foundation for further organic and acquisitive growth in the country. We look forward to continued development and an uplifting future for Albania that we will help to bring about with our tools and know-how,” said the 66 year old Hungarian banker who is also the nation’s biggest investor in agriculture and food industry and – besides being the president of the Hungarian Football Federation (MLSZ) he has been vice-chairman of FIFA since 2018 and vice chairman of UEFA since February this year.
Present in 11 countries in Central-Eastern Europe, by now OTP is the leading regional player, with outstanding stability, profitability and exceptional growth at the same time.
According to him, Albanian companies should benefit from OTP’s presence by gaining easier access to Hungary and to those markets where it has subsidiaries in the region.
“All Hungarian companies know OTP, and I’m confident, that our presence will encourage Hungarian enterprises to do more business in and with Albania, since they will have a very well-known and reliable new partner in finances and business advisory here. I’m absolutely sure that the intention of Hungarian investors towards Albania will increase thanks OTP’s presence,” he added.
Last April, Hungary’s OTP Bank entered the Albanian market and we had the great pleasure to have you in Albania. How would you assess this moment for OTP Bank and for the two countries – Hungary and Albania?
OTP Group had long wanted to enter the Albanian banking market, but up until last year we had not found the right opportunity. With OTP Bank Albania, I can say with full conviction we have welcomed an excellent bank and excellent colleagues to the group, opening a new chapter in OTP Group’s success story. We consider our presence in the Albanian market a great opportunity, and consider it another milestone in strengthening our regional presence.
The country’s economy is favourable, we see outstanding GDP growth in the region and also robust growth potential on the Albanian market with an underpenetrated banking sector. We see our bank as a strong foundation for further organic and acquisitive growth in the country. We look forward to continued development and an uplifting future for Albania that we will help to bring about with our tools and know-how.
Why did you decide to enter into banking system of Albania now?
OTP Group started its regional expansion in 2001. Including Albania, the banking group is present in 11 countries in Central-Eastern Europe, by now OTP is the leading regional player, with outstanding stability, profitability and exceptional growth at the same time. Fifteen years ago OTP tried to buy an Albanian bank, but then Raiffeisen had the better offer. But now, with this new acquisition, in a more favourable position, we were able to enter the country which is a developing and economically stable market. Although Albania is one of the fastest growing economies in Europe, the penetration of banking products is low, so the acceptance of banking products among customers can be significantly increased, and there is room for growth.
What are the bank strategies for Albania since the Societe Generale had a good penetration in the market?
OTP would like to become the largest bank in the Albanian market. We would like to do this primarily through organic growth, but if we find a suitable acquisition target, i.e. a good bank that can be acquired, then we will examine the acquisition option. The Albanian economy has good fundaments and great growth potential; we expect fast development in the upcoming years. For example, tourism could be one of the main drivers of development, and OTP would like to play a major role in providing financial services related to the investments on this field. We are focusing on both small/medium enterprises and retail customers. We aim to provide these client groups great opportunities, not only by financing their needs but also introducing cutting edge digital solutions that are partly developed in other countries where OTP Group operates.
In the light of the purchasing of banks in Albania, Serbia, Bulgaria, Montenegro, Moldavia and Croatia as well as soon in Slovenia, how does Hungarian OTP Bank position itself among the others?
The strategic goal of OTP Group is to become the most successful universal banking group in Central and Eastern Europe. OTP Group at present has almost 1,500 branches and holds market leading positions in Hungary, Montenegro, and in retail in Bulgaria. OTP Bank is continuously investing significant amounts in development, placing special emphasis on the opportunities of digitalization. We often provide unique, convenient and modern services to both retail and corporate customers that are easier and faster to access and meet the challenges of the digital age and the expectations of our customers. The bank’s 70 years of experience and its customer base of 18.5 million enable OTP Group to properly understand and serve the needs of its customers. Last year OTP Group hit a new record both in terms of net profit (above EUR 1 billion adjusted after-tax profit), and market capitalization, supported by the economic upturn. OTP Group’s 19% ROE is one of the highest among European banking groups. Currently OTP has the highest valuation in terms of Price-to-Book ratio (1.8) among large European banks. The bank’s successes in shareholder value creation are also recognized by the market. Since early 2015, our share price tripled, stock exchange capitalization is close to EUR 11 billion. The share price reflects our excellent financial performance – OTP is the only bank among regional peers active in CEE where the current share price exceeds the pre-crisis peak. Bank development is continuous; both in terms of digitalization and IT technology or operations (agile model) it is among the most modern banks in Europe. This data indicates stability, growth, and profitability that places OTP not only as a dominant bank in the Central and Eastern European region, but also among the major banks even on a European scale.
OTP Group has always believed in the region. Economic growth in the SEE often exceeds growth of Western European economies as experienced both before the crisis and in recent years. OTP has gained comprehensive market knowledge during the almost two decades passed since our first acquisition in the region. We believe that we have learned how to operate a sustainable business model to deliver profit and growth while maintaining stability in terms of portfolio quality, and capital and liquidity position.
OTP Bank is one of the most active financial institutions in the European acquisition market. Following the crisis, new transactions started in 2014 and since then OTP Bank has announced the purchase of 11 financial institutions and banking portfolios in 9 countries – out of which only 1 transaction has not been closed yet – and entered new countries such as Albania, Moldova and Slovenia. With this unique acquisition performance, OTP Group has become the most active banking market consolidator in the CEE region, substantially improving its market position and strengthening the profit contribution of foreign group members. We expect the consolidation process to continue further. Main drivers of the consolidation will continue to be a desire to create economies of scale as the SEE banking sector is still fragmented with many small size universal players on the market.
You are a fan of strong competition as a way to perform better. “If there is no competition, even those who are good perform worse” – you stated in one of your interviews. In a relatively small banking market like in Albania, how do you see OTP Bank in comparison with the other competitors?
OTP aims to achieve market leadership on every market where it is present and where it is realistic. The same is true of the Albanian market and our bank here is a solid base for achieving our goal. We bought an excellent bank with a low rate of non-performing loans. The bank’s market share of the Albanian credit market is now around 10%, of the mortgage market it is more than 12%, and the bank is able to grow organically, and as I said further acquisitions are also possible if there is a suitable target at a reasonable price. The management of the bank is excellent, guaranteeing continuous development and further achievements. Regarding future plans, two new branches will open in Tirana very soon, in October. Besides branch network development, it is also our goal is to further improve the quality of digitization and customer service.
Another aspect is that there is close economic cooperation in the region. If a bank – like OTP Group – is present everywhere, it could be a further advantage for us and also for Hungarian entrepreneurs moving in the region. Moreover, Albanian companies should benefit from OTP’s presence by gaining easier access to Hungary and to those markets where we have subsidiaries in the region. Those that have export ambitions, we can support – besides financing – with crossborder services, business information and in networking.
There is plenty of room for development on this field. All Hungarian companies know OTP, and I’m confident, that our presence will encourage Hungarian enterprises to do more business in and with Albania, since they will have a very well-known and reliable new partner in finances and business advisory here. I’m absolutely sure that the intention of Hungarian investors towards Albania will increase thanks OTP’s presence.
Would you be investing in other fields in Albania like, infrastructure, food industry, agriculture or even football as these are some of your many passions?
Albania has great potential for investment not only in the banking and financial sector but in other areas, too, where I also do business. I absolutely do not rule out the possibility of doing business in the country in the future within the framework of my other private business interests. The Albanian economy offers promising market opportunities in infrastructure investments, agriculture or the food industry.
How have your personal hobbies made you a more visionary banker?
My business investments outside the financial sector and my work as a banker are equally important for me. My mission and my responsibility is the same in every field of my business practice: I am pleased to have the opportunity to make investments, that will bring benefit to the entire Hungarian and regional economy and which will create real value and provide a decent living for tens of thousands of people employed either by OTP Group or my private businesses.