There Are Clouds on the Horizon, but I do not Expect Storms

Mr. Roegl, the dynamics in everything is great, but what has been the pulse of the banking system in Bulgaria in recent months?

I will note that 2018 is another good year for the economy and the banks. Loans have been growing for over 20 months in a row. Our expectations are that 2019 will also be positive, but clouds are already visible on the horizon. I don’t expect storms. In my opinion, 2019 will also be a dynamic year, but growth rates, including in the banking system as an integral part of the economy, will be lower. Still, even with delays, good projects will be funded.

Who is actually the great conductor of change in banks?

Certainly, the factors are many - the development of the economy, regulations, technology and, last but not least, the needs and expectations of the clients.

Among the awards that Raiffeisenbank received in 2018 are the Secret Client award, Best Bank in Bulgaria, Best Bank for Private Banking in Bulgaria. Where do you think lies the strength of your bank?

In our work, we are trying to combine elements of traditional banking that have been established over the years - such as sustainable growth, efficiency, healthy credit portfolio and transparency, with the accomplishments of today's digital transformation and innovation. I am confident that we are doing well, and our aim is to be a modern and efficient bank that is fully customer-oriented.

Looking through Raiffeisenbank's portfolio and analysing the data of the Bulgarian National Bank, what can you see about Bulgarians and the Bulgarian economy?

We expect a slowdown in the economy - not only in Bulgaria, but in Europe and globally. The economic cycle has reached its peak and now its growth rates are lower; next year they will be even lower. Our analysts estimate that the Bulgarian economy will grow by 3.2% in 2018, which is less than in 2017, and by 2.5% in 2019. For the Eurozone, with which we are very closely tied as an open economy, the expected growth is 1.7% for 2018 and 2019. Inflation is also growing and I think this is felt by everyone.

The Elevator Lab is the largest corporate fintech accelerator. Is there anything new, which was born there that you plan to introduce?

This is the goal of the programme - to partner with fintech startups. We are already using a solution of the Bulgarian finalist in the Elevator Lab global challenge for remote identification, thanks to which we now offer to our clients an opportunity for a consumer loan without a single visit to an office and without a single sheet of paper, and the signing of the documents is carried out through an application on the phone. We are in the process of testing an innovative security solution based on blockchain, developed by the local Elevator Lab winner, as well as a new solution for improving the client experience of one of the global finalists of the accelerator.

How do you achieve balance between technology, on which we are dependent nowadays, and technology at all costs?

There's no need to balance, as a tightrope walker does. Technology is a natural development of mankind and it has repeatedly gone through technological revolutions - the steam engine, the internal combustion engine, the electric bulb. And now, we are contemporaries of such a technology revolution and, of course, we get used to living with it. Technologies are created by people for the people. At the core of everything is the man and development, and so we don’t put our stakes on technology at all costs, but on such a technology of which there is a real need.

What is your explanation for the credit growth?

There are a number of factors behind this growth: the economic development in recent years, which needs funding - new business projects and household needs; the huge liquidity of the markets, due to the expansive policy of the central banks and the low interest rates that make credits more affordable. Rising income and low unemployment are also among the leading factors.

Mergers and acquisitions in the banking sector stir the market. What do they signify and what will be their effect in your opinion?

Modern banking business is increasingly in need of efficiency, due to the ever-increasing regulatory costs and investments in technology and innovation. Small banks are struggling to meet these challenges more and more in the context of shrinking interest income and stronger competition. In order to achieve synergy and to improve efficiency, consolidation seems a reasonable solution. Bulgaria is not lagging behind in this process, and recently, we have seen major transactions in the merger and acquisitions market.

The great charity initiative “Choose to Help” has been going on for 10 years. Why is it important to your bank?

Social responsibility and solidarity, for 200 years now, are among the main principles of Raiffeisen across Europe to which we also adhere. But the campaign is especially important for the Bulgarian society because it makes hundreds of stories better by helping socially significant causes. Since 2009, we have supported 233 health, social, cultural and eco projects with over BGN 2.7 million. Currently, we are donating to 24 new projects in the areas of health, social services, culture and education and ecology - everyone can support them on izberi.rbb.bg.

A sentence to summarise your expectations for the near future of the banking system...

I will outline several important trends for the sector - a more balanced interest environment, efficiency, innovation and client orientation.