Interest rate will continue to fall, some banks will not be able to keep up with the trend

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The fall of interests rates in Montenegro should continue, which could bring some of the 15 banks in the market in a situation that they can not keep up with that trend, said Christoph Schoen, Executive Director of Hypo Alpe Adria Bank HAAB.

In his interview to Pobjeda he said that he can understand the citizens that want lower interest rates, but they should know that these rates depend on a number of factors that are not in the control of the bank, such as credit rating of the country and the degree of risk involved.

“We must speak of the facts, and the fact is that the interest rates are in the state of free fall due to big competition between banks in Montenegro. Depending on your choice of the bank, you can get very attractive interest rates on savings. It is true that clients, aside from attractive interest rates, also expect good customer service, alternative channels for sales and fast processing of their requests”, Schoen said.

He believes that, aside from the continued trend of decrease in interest rates, a need for further investments in digital technologies will lead some banks to a situation in which they cannot follow market’s movements.

Schoen announced that one of the changes planned for this year is rebranding of Hypo Bank and Group.

“Within that project, we will not only change our name and logo, but it will also send a strong signal of our continuous effort to make the bank better for our clients”, Schoen said.

This April will mark ten years since this bank has started working in Montenegro.

Schoen said that the bank had a fast growth in the beginning, after which many turbulences followed, caused by different internal and external reasons.

“Current market position of the bank still reflects that past, and many business initiatives introduced when Advent International and EBRD took over our group still remain invisible to the clients. However, I am certain we will make positive surprise on the market this year”, Schoen added.

He said that three main pillars of the bank’s business will be strong focus on increasing the number of clients, simple product portfolio and efficient processes.

Global investment fund Advent and EBRD are serious international institutions with an ambition to create a singular bank group in the Western Balkans.

In order to accomplish that, new owners have started a program of efficiency improvement. Hypo is the only financial group facing the market and clients in the region directly”, Schoen said.

He said that the plans for new products are very ambitious at all levels.

“Unlike before, we now have adequate instruments in our hands and we are ready to take risks to accomplish our goals. Results for the first quarter of this year are very promising, but we are aiming towards constant improvement of our business model in order to continue that trend”, Schoen said.

Commenting on the Law on Conversion of Loans in Swiss Francs into Euros, and the fact that the bank submitted an initiative to examine its basis in the Constitution, Schoen said that he would rather refrain from commenting on an ongoing court procedure.

“What I can say is that we are implementing said law, but we think that retroactive change in existing contracts is problematic legally, seeing as it is contrary to the international law. Despite short-term negative effects this law had on our last year’s results, our bank has a good basis in capital, it is stable and secure”, Schoen said.

Commenting on the fact that the bank decided to stop participation in the Thousand Plus project, Schoen said that this project is basically good, but that its foundation is currently different that the bank’s strategy.

“When dealing with citizens, you must be swift and simple, so in the future we will offer products that can be acquired in the short-term. As far as residential credits go, we will soon have an attractive product offer”, Schoen concluded.

Source: Cafe Del Montenegro