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Gaining a foothold, Creditanstalt eyes eastern markets wanting to use Slovakia as springboard

Creditanstalt a.s., Bratislava, is working on increasing its share of if individual clients while looking to expand outside the capital soon. Last year, it reported a net profit of 23 million Sk, while the expected profit for 1997 is 110 million Sk. Although the bulk of the bank's clients still consists of corporate ones the bank is eying different regions in the country for new customers.
"About 50-60 percent of our loans are provided to production companies" said Regina Ovesny-Straka, Creditanstalt's general director. "Half of our clients are domestic companies," she continued. "Of course, as we move into more regions, we expect the share of production companies as well as domestic clients to grow."
Creditanstalt's network in Slovakia is less developed compared to in other neighboring countries. The bank came to Slovakia just three years ago in 1994 while it gained a foothold in the Czech Republic five years ago, and in Hungary six years ago.

Creditanstalt a.s., Bratislava, is working on increasing its share of if individual clients while looking to expand outside the capital soon. Last year, it reported a net profit of 23 million Sk, while the expected profit for 1997 is 110 million Sk. Although the bulk of the bank's clients still consists of corporate ones the bank is eying different regions in the country for new customers.

"About 50-60 percent of our loans are provided to production companies" said Regina Ovesny-Straka, Creditanstalt's general director. "Half of our clients are domestic companies," she continued. "Of course, as we move into more regions, we expect the share of production companies as well as domestic clients to grow."

Creditanstalt's network in Slovakia is less developed compared to in other neighboring countries. The bank came to Slovakia just three years ago in 1994 while it gained a foothold in the Czech Republic five years ago, and in Hungary six years ago.

In autumn, a representative office in Košice will be transformed into a branch office, and a new representative office will open in Banská Bystrica. Ovesny-Straka pointed out that the proximity of Košice to the Ukrainian border makes the town a perfect springboard for penetrating markets further East.

The number of bank's individual clients rose by 60 percent in 1996. Also in the fall, Creditanstalt will open a branch office in downtown Bratislava in order to reach and serve customers.

One of the most successful products with customers has been a savings book. Individual deposits amounted to 300 million Sk at the end of last year. The target group consists of business license (živnostenský list) holders as well as managers. The bank plans to offer them a number of special services, including "telephone service," through which a customer is able to conduct certain basic business via telephone for 30 Sk a month. For example, it will be possible to ask for the current account balance, give a payment order or get the latest currency exchange information.

As Ovesny-Straka pointed out, corporate clients are especially attracted by foreign currency loans, which the bank is able to provide despite the latest monetary restrictions imposed by the National Bank of Slovakia (NBS). She seemed to understand the NBS's activities.

"Sometimes, we are not absolutely happy with the measures that the National Bank takes," she said. "But we understand that they are necessary." To illustrate this, she pointed out the latest restrictions on foreign currency loans, and noted that the NBS did well in defending the crown against speculators.

Ovesny-Straka thinks that the banking sector in Slovakia is moving in a good direction: "Of course, there are burdens from the past," she said. "As a new bank to Slovakia, with an international background, we avoided the problem of bad loans that some big Slovak banks are struggling with. But there are also many purely Slovak banks that have been smart enough to escape this unfortunate peril."

In March this year, Creditanstalt's mother bank in Austria was taken over by its biggest domestic competitor, Bank Austria. When asked about the possible impact of this ownership change on operations of both banks in Slovakia, Ovesny-Straka said, "Frankly, it is hard to forecast anything yet. The mother banks will have to analyze the situation properly. What we can expect, is intensified cooperation between the daughter companies in Slovakia in order to improve their strategic position on the market."


At a Glance

Balance sheet total: 8.2 billion Sk
Gross profit: 93.2 million Sk
Net profit: 23 million Sk
No. of employees:110 (expected for the end of '97)
Ownership:100% daughter company of Creditanstalt Wien

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