A creditor’s obligation to assess the creditworthiness of a consumer
by Ganado Advocates
23rd April 2024
by FinanceMalta
14th March 2023
You get a good measure of a person’s leadership style when one of the first things they mention during an interview is the importance of communication with your employees at a grassroots level.
“To improve the value proposition for all our clients, open communication with staff is critical, building on a culture of trust which will then be reflected in the engagements with our clients. Trust is earned by doing the right thing consistently and with meaning,” he explains.
It would be impossible to understand his approach unless you know where he is coming from. He has worked in banking for over 30 years, most of which were spent in South Africa, Kuwait, Dubai, Oman and Malaysia – during which time he handled sensitive situations and was lauded in international media for his ability to take companies to the next level, mostly through his focus on human resources.
Photo – Mr. David Power, CEO, BNF Bank
Taking over from Michael Collis, who had led the company since 2017, the message from Mr Power is one of continuity, with the same emphasis on the people who sit at the core of the Bank.
The Bank already has a strategy in place – and the emphasis on digitalisation will continue unabated, with internal processes being installed through digital-transformation giant Temenos to make regulatory and operational requirements more efficient. Now the work is underway on more customer-centric objectives related to digital banking channels which will be rolled out later this year and into 2024.
“This is going to revolutionise the way we do business and interact with our clients,” he said, adding that the Bank would be retaining its branch franchise to ensure that customers have different touchpoints depending on their personal preferences and life cycle. “The aim of our digitalisation project is not to replace our face to face touchpoints, but to facilitate our interactions with clients, offering a superior customer experience and journey.”
Another development that will open new doors is the licensing of BNF Bank’s UK branch towards the end of the year. This had been opened with the looming Brexit in mind, to facilitate services such as successful participation in syndicated loans and deposit gathering. Although the intention is not to offer retail services, the London branch, once licensed, would be able to offer our corporate clients alternative services with regards to their UK investment opportunities, as well as institutional opportunities.
The Bank hit the €1 billion asset threshold in 2021, with the 2022 figures due out towards the end of March. For Mr Power, this is a reaffirmation that the Bank’s customer-centric formula does not need to be tampered with – apart from digitalisation.
“A lot of entities around the world give that formula lip service, but it sits at the heart of everything we do every day,” he reassured.
However, his appointment coincides with one of the ECB’s first interest rate rises in a decade. Will this have an impact on the Bank’s business model, 79 per cent of whose assets in 2021 were loans and advances to customers?
“We understand that this is our bread and butter – along with deposits. We have focused on that for some years to the benefit of the bank and shareholder. You don’t want to be in a situation where you purposely go for the big revenue deals to the exclusion of sustainable growth year in and year out. There is no magic formula for banking: you just need continuous stable and steady growth.”
“On my visits around the Bank and its branches, I met a number of people who have never experienced a rising interest rate cycle. As a Bank, we have tended to follow Euribor when pricing our corporate book, which moves in line with the market. But on the retail side, it is a different challenge as in this area interest tends to be linked to bank-base rates, which have not moved in line with the rising interest rate cycle.”
“Liquidity is obviously an important factor in Maltese banking, and this allows a bank to keep rates down for a certain amount of time, but we cannot keep rates down indefinitely. In most areas of the world, when the central bank raises its rates, the banks follow suit. Deposits are being priced up but assets are not following suit – both sides of the balance sheet should work in tandem.”
Looking forward, he hopes that his leadership style – based on true engagement and communication – will help him through the change period and beyond.
“I appreciate that change is not easy. I am not a magician and I cannot change things overnight but what I can do is understand what we can change and how we can achieve our strategy together. It is important that we are all on the same page and fully understand what we are trying to achieve. It is all about communication, communication, communication.
“In all the jurisdictions I have worked, I have never come across such a loyal staff complement. If you have that, half your problem is solved. We have a lot to be proud of.”
Photo – BNF Bank
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