Since its launch last November, Poland’s Alior Bank has exceeded
even its own ambitious launch targets in terms of customer numbers,
deposits and branch expansion, in Europe’s largest banking start-up
for 30 years. Alior’s vice-president, Niels Lundorff, tells
Douglas
Blakey further expansion plans are on
track.
Poland’s Alior Bank has hit the ground running since first
opening its doors in November last year. Fast forward seven months
and the bank has grown to 120,000 customers (including 13,000
business clients), a deposit base of PLN1.8 billion ($562.8
million), loans totaling PLN750 million and a network of 119
branches and eight business centres.
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By the end of year it aims to grow branch
numbers to 155, with plans to hit the 200 mark in 2010 in addition
to 400 planned franchise agencies. All of this is designed to
capture a retail market share of around 2.5 percent by 2012, by
which time staff numbers will reach 3,500, up from a current
1,800.
According to the bank’s vice-president, Niels
Lundorff, one of a three-person management board, Alior can claim
to be Europe’s largest banking start-up for 30 years.
He
told RBI: “Alior Bank is growing faster than we expected.
The only change to our original business plan has been to
accelerate the [branch] expansion to take advantage of falling
rents in Poland and competitors canceling their branch rolls-outs
or even in some cases, closing a number of their branches.”
Of particular satisfaction is Alior’s success
in attracting deposits at around twice the speed it had originally
estimated. Lundorff, who joined the bank from UniCredit, where he
was executive director of risk and regional policy, says Alior can
turn a profit by 2012, when it expects customer numbers to exceed
one million.
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By GlobalDataHeadquartered in Warsaw, Alior was conceived
by prominent French financier of Polish descent, Romain Zaleski
(described last year by Forbes magazine as the fifth-richest
Frenchman), attracted by Poland’s relatively high unbanked
population (estimated at 50 percent).
Through an unlisted holding company, Carlo
Tassara, Zaleski had been a prominent investor in Europe’s
financial services sector; at the time Alior launched, he was one
of the largest shareholders in Intesa Sanpaolo, for instance. But
the investments plummeted in value as stock markets collapsed in
the financial crisis, leaving the firm with debts of over €5
billion ($7.1 billion) at the end of 2008.
Lundorff,
however, bristles at the suggestion Zaleski’s well-publicised debt
renegotiations – debts had eased by the end of May to €3.2 billion
– with a number of banks have slowed down Alior’s growth plans.
“The situation of Carlo Tassara is stable. Our
owner has paid Alior Bank’s capital of €425 million in April 2008.
We are completely solvent, stable, safe and well capitalised,” he
stressed.
Loans/GDP ratio at 50%
The country’s low loan penetration
rates, even after years of strong growth, also attracted Alior’s
backer, with loans as a percentage of GDP in Poland still below 50
percent, compared with at least 100 percent in Western European
countries.
While the bank is targeting both retail and
corporate clients, it is not focusing on larger Polish enterprises,
instead concentrating on the retail sector and businesses with
turnover of less than PLN60 million.
It also has one key advantage over its more
mature rivals: it holds no toxic assets on its books and boasts an
enviable deposit-to-loan ratio of more than 150 percent.
Lundorff added: “We are focused on giving
clients a safe haven. We will not go into proprietary trading and
will not invest in any instruments that will not support the needs
of our clients.”
While Lundorff is keen to emphasise the
importance of the bank’s ongoing branch expansion strategy, Alior
has from the outset sought to maximise use of its online
channel.
“Our potential client is a person who has a
car, mobile phone and access to the internet – especially access to
the internet,” he explained.
To date, Lundorff says, the strategy has
worked extremely well, with 68 percent of the bank’s retail
customers regularly banking online while the average customer makes
between 5 and 10 transactions online each month.
Alior has also thrown itself enthusiastically
into promoting its mobile banking channel, offering account
transactions and payments services as well as balance and
investment information.
And the internet has played a central part in
flagging up the launch of Alior with the August 2008 debut of an
online campaign, ‘Build with us a new bank’.
“We had 93,000 participants of whom more than
25 percent are now active Alior customers,” Lundorff said.
“The campaign highlighted that Alior was the
first bank in the Polish market to ask potential customers about
the needs and expectations they have towards a new bank before it
has entered the market. It was one of the biggest direct marketing
initiatives in the whole of Europe.”
The online drive was complemented by an
integrated branding campaign including TV, press, radio and outdoor
creative, all of which Lundorff says combined to give Alior 50
percent brand awareness within five months of the launch.
Award-winning PR campaign
An award-winning PR campaign coordinated by United PR also
promoted the Alior launch and brand.
“The main theme of our campaigns is to promote
what we call ‘The higher culture of banking’. We want to present
Alior as a new quality in the Polish banking market, offering all
of its clients the highest quality of products and services which,
until now, were available only to VIP clients of other banking
institutions,” said Lundorff.
“From the start of the project, we have put a
lot of emphasis on local communities, such as rolling out Alior
Bank Councils, which now have more than 2,300 participants.”
This involved the bank holding over 100
meetings, to which it invited local community, business and
cultural leaders as well as prospective customers, to discuss how
Alior could play an active role in the areas it set up shop.
The bank’s opening product line-up has been
advertised under the banner ‘Za pewne rzeczy nie powinienes płacic’
(‘For some things you should not pay’), including money transfers
and online transactions while an online tool at the website
(www.kontrola.aliorbank.pl) offers an online price comparison
calculation, comparing Alior’s fees and charges with its
rivals.
Alior has also attracted positive publicity,
not to mention attracting staff from its more established rivals,
as a result of its employee benefits programme.
In its first year of operation, the bank
ranked third in a nationwide poll of best Polish company to work
for, the only bank to feature, with staff benefits including
medical care and insurance and funding for training in postgraduate
courses, and MBA studies.
The bank’s latest campaign, a nationwide
online photo contest entitled ‘Positives of our cities’, which
kicked off in June, brings together the internet, Alior’s promotion
of Polish culture and, again, local communities.
Over a 10-week period, the residents of 66
Polish towns and cities which already have an Alior branch are
invited to post photographs on a dedicated website at
www.konkurs.aliorbank.pl with the option to comment on photos
uploaded by other participants.
For Lundorff, the bank’s communications
strategy is on track to “build the community around Alior”.
As for the bank’s brand building efforts to
date, he could not be happier.
“We are very content that people have found
trust in the new banking institution,” Lundorff said.
COUNTRY SNAPSHOT
Foreign banks dominate Polish
retail banking market
The Polish retail market into which
Alior launched in the fourth quarter of 2008 is dominated by
state-controlled PKO and UniCredit-controlled Pekao, whose assets
each exceed PLN100 billion ($31.3 billion) and who account for more
than 25 percent of the market.
By the end of the year, the market
shares of the five largest banks in the country – four of whom are
foreign-owned – in assets, loans and deposits were 44.6 percent,
43.1 percent and 55.3 percent, respectively.
While the country has not escaped the worst of
the economic downturn, Poland continues to represent one of the
more resilient banking markets in the region and is likely to be
among the better performing European economies during 2009-10.
The European Commission has, for example,
forecast a GDP growth rate for Poland of 2 percent for 2010.
A number of positives in the sector will buoy
an already high degree of optimism at Alior.
Customer sentiment towards the country’s
existing banking banks is, according to the Polish Financial
Supervision Authority in a March 2009 report, at its lowest level
since the end of 2001.
Demand for banking services, however,
continues to grow, with the country’s total branch network
increasing by 9.1 percent to 14,698 during 2008.
Improvement in overall wealth and continued
consumer optimism resulted in an increase in demand for consumer
loans, which rose by a third (from PLN102.5 billion at the end of
2007 to PLN136.4 billion at the end of 2008), reported the Polish
Financial Supervision Authority.
Overdrafts rose by only 17.1 percent while
total credit card balances outstanding soared by 42 percent. Credit
card growth has been significant in the past few years, increasing
from 4.3 million credit cards in 2005, or 21.5 percent of all
cards, to 9.4 million credit cards by 2008 representing 31.1
percent of all cards in issue.
A sharp rise in retail deposit growth was also
witnessed in 2008, up by 26.1 percent (compared to 9.9 percent in
2007), the highest growth rate in the decade.
Looking ahead, a fresh wave of merger and
acquisition activity in the Polish banking sector continues to be
mooted by analysts, with most eyes on the last remaining bank under
state control, PKO, becoming an acquirer of weaker rivals.
On 8 June, the lender said it planned to raise
up to $1.5 billion via a rights issue, to boost lending and fund
growth.
Possible takeover targets include
AIB-controlled BZ WBK and Bank Millennium, majority-owned by
Portugal’s Millennium bcp.
