0 competitive business case mba – march 2004 delta bank vs panonska bank
TRANSCRIPT
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Competitive Business CaseCompetitive Business Case
MBA – March 2004MBA – March 2004Delta Bank vs Panonska Bank
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IndexIndexHistoryBasis of BanksParametars of WorkOverview of Banking Sectors in SerbiaNomber of Banks in SerbiaPlayersRangMarketActivitesBalance Sheet Structure of Banks in SerbiaComparation with Banking Sector in EuropePotencial and ForecasteNear futureBanks’ fokusSWOTConclusionSourcesAuthors
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HistoryHistory
– The Bank is part of Delta
Holding and was established in 16/10/1991.
– Delta Bank is private bank
– was established in 1974 year
by state. Ownership of the Bank was socialistic social.
– Since 1995, it has been operating as a joint-stock bank.
– Now, the State’s stake is 83% of the Bank’s share capital.
– The nomber of the Bank’s shareholders is 1 337.
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Basis of Basis of DeltaDelta Bank Bank
MISMISSSIONIONMISMISSSIONION
VISIONVISION
StrategyStrategy
ActivityActivity
ImputsImputs
Potential clientsPotential clients
Vision: Basic directions will be development of retail banking, spreading of the net of branches, increasing clients both in domestic and foreign currency businesses, as well as, continuing the co-operation with leading European banks. Special attention was given to the developing of e-banking, as the basic of banking in the future.
Imputs come from needs of 200 000 clients
Strategy: Increasing of trust of clients in the long-term stability of the Bank by making public accurate information on its financial balance, especially on its solvency, liquidity and risk management.
Activity: all banking transaction expected and wonted from clients
Mission: Delta Banka is aiming to be a leader on the banking market in Serbia, applying the highest world standards in banking services.
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Basis of Panonska BankBasis of Panonska BankBusiness policyBusiness policy– Achieve positive financial results by preserving the interests of shareholders and adequate
provisions for risky loans – Improve permanently market options – Increase operational profitability, primarily by increasing efficiency and rational utilization of
internal resources Business targetsBusiness targets– Increasing total and particularly dinar balance sheet real potentials, providing high quality
(stable and reliable) deposits-savings sources for financing with the emphasis on the dynamic growth of deposits of SMEs, entrepreneurs and citizens, as well as of fixed long term deposits,
– Promoting credit activities particularly for financing SMEs and citizens, – Improving the existing and introducing new banking products and services, – Expanding business network and the Bank’s market share, – Increasing number of clients and users of domestic payment operations services with the
promotion of efficient Gold basesGold bases– from 1997, gold is ground for savings
ISO 9001ISO 9001– attested from RWTÜV
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Parametars of workParametars of workDeltaDelta BBankank Panonska BankPanonska Bank
balance sheetbalance sheet– dinars assets is more then
2.5 bill. dinars (36 mil. €)– assets in € is 4.4 mil.– dinars liability is more
then 3.5 bill. dinars (50 mil. €)
– liability in € is 3.4 mil.
balance issubalance issu– total profit is near 300 mil.
dinars (4.25 mil. €)– costs are 430 mil. dinars
(more then 6 mil €)
STATEMENT OF INCOMESTATEMENT OF INCOME
Year Ended December 31, 2003
(Thousands of dinars)
INCOME FROM ORDINARY OPERATIONS 1,695,832
BALANCE SHEETBALANCE SHEET
As of December 31, 2003
(Thousands of dinars)
Property and equipment 2,843,163
Total Assets 43,937,82
4
LIABILITIES AND SHAREHOLDERS' EQUITY
Total Liabilities 37,298,66
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Shareholders’ Equity
Total Shareholders’ Equity 6,639,159
Total Liabilities and Shareholders’ Equity43,937,82
4
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Point of Start for CIPoint of Start for CI
Independent of history any bank, new age in Serbian economy and banking has started since political change on beginig of new millennium. It means that no one bank has a lot of advantages from self expeirance on new market environment.Many big State’s banks has been closed
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Overview of Banking SectorOverview of Banking Sector inin
Serbia Serbia
• Detailed analyses of the banks by NBS and 3 other advisors
• Classification of banks in 4 categories
• Enforcement of regulation
• Getting full control of majority state owned banks
• Imposing strict measures to preserve value
• Appointment of privatization advisors for selected banks
• Preparing work-out mechanism
• Liquidation of 19 smaller and 4 large banks
• Granting 5 Greenfield licenses
• Amendment of laws and related decisions
• Carrying out debt-equity swap
PrivatizationPrivatization “Get real” Change structure Pre-privatization
2001 - 2002 2003 - 20042002 - 2003
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Criteria
• Financial standing
• Liquidity
• Systematic importance
• Political importance (number of employees, regional importance)
• Rehabilitation costs
• Capability of making profit
Banks under enhanced supervision
83 83 Banks in Banks in SerbiaSerbia
Rehabilitation
Liquidation / Bankruptcy
Solvent banks
Insolvent banks
Number of banks as
of Dec 31, 2000
No action
Banks in administration
NBS
BRA
28
9
1
3
23
Mergers & Acquisitions 18
83
+ 7 4848
Number of banks today*
New licenses issued in
2001
==
Number of banks in Serbia since 2001Number of banks in Serbia since 2001
*Excluding Kosovo
1111
MarketMarket• Delta Banka is an universal commercial bank with Head Office in Belgrade and 160 branch offices in more than 100 towns from all Serbia. • There is swiftness and amount of foreign currency payment operations, Delta Banka has made a fruitful cooperation with over 200.000 clients. • Delta Banka has a well-developed co-operation with world leading banks. It has correspondent relations with 196 world banks, and in 35 it has Nostro accounts. Delta Banka has TENFORE real-time and on-line dealing system with Germany. The Bank is very active on the foreign currency inter-banking market (MTD) and it became a member of ACI - The Financial Market Association.
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MarketMarket• Headquarters of Panonska Bank is in Novi Sad
• The Bank has 21 branches end 19 offices in Vojvodina (nord Serbia and Belgrade)
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RangRangBilance in mill. dinars
44.2 43.939.8
31.7
15.4 12.7 12.4 12.2 9.8 8.9 8.3 8.3 8 7.8 7.7
0
10
20
30
40
50
• Participation of State:• Komercijalna – 29.08%• Vojvodjanska – 98.65%• Ju-Bank – 76.49%• Novosadska – 67.27%• PB Agro Bank – 15.00%• Panonska Bank – 82.91%
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Foreign banks are still mainly focusing on their traditional business segment – Collection of substantial deposits based on outstanding
credibility
– Focus on selected majority foreign owned companies which entered
– The country via Greenfield investment or privatization deals
– Advisory services to the Privatization Agency
– Organic growth of business activities
– Trade related activities with only local financing
Both, domestic and foreign banks don’t have diversification in activites
Activites of PlayersActivites of Players
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Activites of PlayersActivites of PlayersService range offered by the banks for the time being is a “plain vanilla” one…– Currently
Current and savings account related services: payments/transfers, short term depositsCredit-debit card
– still in early phase
Loans– mainly overdrafts and consumer loans, some car loans, mainly short term corporate
loansTrade related activities:
– mainly L/C and guaranteesno customer segmentationmainly one channel of communicationsimple products
– To comewider penetration of all the servicestanding ordersmedium and long term loans based on FFCS* as wellforeign transfersLeasingmortgage loans
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Activites of Activites of DeltaDelta Bank Bank
Retail banking– Consumers Loans– Payment Cards– Savings– Domestic & Foreign Currency– Safe Boxes
Corporate banking– Payment Operation – Short-Term Loans – Long-Term Loans – Car Loans – Domestic Partners – Partners Abroad
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Activites of Activites of DeltaDelta Bank BankCONSUMER'S LOANS
– STUDENT'S LOANS FOR SCHOLARSHIP PAYMENT– ARRANGEMENT CREDITS BASED ON THE CONTRACT ON BUSINESS
CO-OPERATION Payment Cards
– Maestro – Standard – Gold – Business – Visa Electron– Visa Classic – Visa Gold – ATM TERMINALS OF DELTA BANKA
SAVINGS – Domestic Currency Savings– Foreign Currency Savings
DOMESTIC & FOREIGN CURRENCY ACTIVITIES – DOMESTIC & FOREIGN CURRENCY ACTIVITIES
Cashing foreign cheques and international P/O International P/O
– Domestic Currency ActivitiesCurrent Accounts Giro-accounts of citizens and undertakers
SAFE-BOXES OF DELTA BANKA
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Activites of Panonska BankActivites of Panonska BankPanonska Bank deals with deposits, credits, and other banking activities in the country and abroadThe scope of services offered by the Bank includes the following: – All types of money deposits – Loans and credits – Foreign exchange transactions – Issuing of shares and bonds and credit cards – Money savings and transactions with securities – Buying and selling of securities – Issuing of certificates, guaranties, and avals – Payment operations in the country and abroad – Foreign loans
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Activites of Panonska BankActivites of Panonska BankThe Bank also performs the following services: – Brokerage activities – Crediting and debiting operations – Pay cards
Visa Classic Visa Electron Dina cardin arrangement
– VISA GOLD, – VISA BUSINESS SILVER
– Other financial services – Keeping of objects made of gold and other precious
metals, jewellery and other valuables.
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Corporate banking of Corporate banking of Panonska BankPanonska Bank
Short-term loans for:Short-term loans for:– Export financing Export financing – Preparation of goods for export Preparation of goods for export – Working assets Working assets – Buybacks and stocks of finished products and Buybacks and stocks of finished products and
goods goods – Current liquidityCurrent liquidityMedium-term and long–term loans for:Medium-term and long–term loans for:– Fixed assets Fixed assets – Permanent working assets Permanent working assets – Housing loans and etc.Housing loans and etc.
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13.6%6.7% 12.0%
37.5%
19.2%
54.8%
21.4%
47.7%
26.5%22.9%24.0%
4.7%2.5% 6.6%
9.8%
24.9%
40.4%11.1%
12.0%
18.9%44.7% 14.8%
11.2%
23.0%
24.1%
8.7%
8.3%9.9%
2.8%15.8% 19.5%
А 2000 А 2001* A2002 L 2000 L 2001* L2002
TThe he BBalance Sheet Structurealance Sheet Structure of Serbian Banksof Serbian Banks
€10.9 bn € 4.8 bn
Fixed assets
Claims of FRY for FC savings
Long term placements
Short-term placements
Cash
CapitalCapital
Long-term Long-term provisionsprovisions
Liabilities for Liabilities for frozen FC frozen FC savingssavings
Long-term Long-term fundsfunds
Short-term Short-term fundsfunds
Sight-depositsSight-deposits
ASSETSASSETS LIABILITIESLIABILITIES€10.9 bn € 4.8 bn€ 5.3bn € 5.3bn
*Excluding the 4 largest banks closed on January 3, 2002
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-47.6
20.7
11.1
5.6
11.4
7.1
10.6
6.6
3.1
Comparation with Banking Sector in Comparation with Banking Sector in EuropeEurope
0.6
3.7
3.8
4.5
5.6
17.4
25.8
29.0
69.2
80.2
Banking assets per capita, 2001, in € ‘000
Banking assets, 2001
In € bn
42
73
78
88
130
146
156
253
266
348
Serbia
Poland
Hungary
Croatia
Czech Republic
Greece
Spain
Portugal
Austria
Belgium
Banks' assets CAGR, 1997-2001
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Expected PExpected Potentialotential
1,397
976
1,424
1,925
2,404
1999 2000 2001 2002 2003e
GDP per capita in USD
20 32 60200
550
1,850
1999 2000 2001 2002 2003e 2004e
Number of credit cards in 000 of customers
Consumer loans per capita in €
0.00 0.00
15.89
3.72
5.724.95
1999 2000 2001 2002 2003e 2004eSource:NBS
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ForecastForecast
Refering provisinal information, posible to see that Serbian banking is on good way, but still far awey from Europian and not near to banking of neighbourhood countries. Direction of development will be in substantial improvement of banking services:– ATMs, – POS, – E-banking, – credit/debt cards, – consumer loans ...
But, the first job have to be privatisation
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Near futureNear future
DeltaDelta Bank Bank– Delta Bank is aiming to be a
leader on the banking market in Serbia, applying the highest world standards in banking services. Basic directions of development include development of retail banking, further spreading of the net of branches, increasing the circle of depositors and clients both in domestic and foreign currency businesses, as well as, continuing the co-operation with leading European and world banks. Special attention was given to the developing of e-banking, as the basic of banking in the future.
Panonska BankPanonska Bank– Increasing total and particularly
dinar balance sheet real potentials,
– The emphasis on the dynamic growth of deposits of small and middle enterprises, entrepreneurs and citizens, as well as of fixed long term deposits,
– Promoting credit activities particularly for financing small and middle enterprises and citizens,
– Improving the existing and introducing new banking products and services,
– Expanding business network and the Bank’s market share,
– Increasing number of clients and users of domestic payment operations services with the promotion of efficient
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Banks’ FocusBanks’ FocusPanonskaPanonska
increase of year
capital %
lode potential %
foreign currency savings %
credit portfolio %
card traffic %
2003/2002 153 123 152 269 1102004/2003 130 125 145 180 1302005/2004 120 125 140 150 1502006/2005 115 130 140 100 175
DeltaDeltaincrease of
yearcapital
%lode potential
%foreign currency savings %
credit portfolio %
card traffic %
2003/2002 150 200 200 150 -2004/2003 125 175 175 150 1202005/2004 115 150 150 140 1502006/2005 110 125 130 135 170
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S W O TS W O TDeltaDelta Bank Bank Panonska BankPanonska Bank
StrengthsStrengths
Part of Delta Holding – group of developed companies
Big network of offices correspondent relationships
with more of 300 foreign banks Internet bankingPermanent education of
employees
for savings longer then 1 year, gold is ground
WeaknessesWeaknesses
Brend depend of strengths of companies from Astra (BK) Group
Small No of offices on marketDoesn’t have business in abroadName link only for small area
OpportunitiesOpportunities
Less big & strong states banksOne of leaders domestic bank –
our people believe to leaderslevel of compulsory reserves
with National Bank of Serbia
Good relationship with leading political structure
ThreatsThreats Entry of strong foreign banksToo large too manage
Entry of strong foreign banksRecruitment of private banks
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ConclusionConclusion
Panonska Bank is one of tipical bank from socialism Panonska Bank is one of tipical bank from socialism period. Today, this bank is still in good relationship period. Today, this bank is still in good relationship with current political structur. During leading politics, with current political structur. During leading politics, the Bank will have good business, but can not say the Bank will have good business, but can not say that has good future.that has good future.Delta Bank is part of strong group of known Delta Bank is part of strong group of known companies. Has good image and can expected nice companies. Has good image and can expected nice future.future.For presentation, we chose two For presentation, we chose two of more important of more important domestic domestic banks because we’d like to show totaly banks because we’d like to show totaly diferent approach to business.diferent approach to business.
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SourcesSourcesPersonal contact with managers of banksPersonal contact with managers of banksSites:Sites:– www.panban.co.yuwww.panban.co.yu– www.gov.yuwww.gov.yu– www.ssinf.sv.gov.yuwww.ssinf.sv.gov.yu– www.mfa.gov.yuwww.mfa.gov.yu– www.srbija.sr.gov.yuwww.srbija.sr.gov.yu– www.mier.sr.gov.yuwww.mier.sr.gov.yu– www.mfin.sr.gov.yuwww.mfin.sr.gov.yu– www.mpriv.sr.gov.yuwww.mpriv.sr.gov.yu– www.belex.co.yuwww.belex.co.yu– www.bra.gov.yuwww.bra.gov.yu– www.priv.yuwww.priv.yu– www.nbs.yuwww.nbs.yu– www.pks.sv.gov.yuwww.pks.sv.gov.yu– www.finnet.co.yu/ubj/ubj.htmwww.finnet.co.yu/ubj/ubj.htm– www.thebanker.comwww.thebanker.com
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AuthorsAuthorsZlatko Mitic, Zlatko Mitic, R&D Manager, Sintelon R&C - floor
coverings producer
Velibor Raicevic,Velibor Raicevic,Menager of publicly municipal
enterprise
Milica Radoicic, Milica Radoicic, Proxy of manager in publicly
municipal enterprise
Vladimir Bjelovic, Vladimir Bjelovic, Manager of gas distribution
enterprise
Darko Medjedovic, Darko Medjedovic, Manager of local electro
distribution
Zoran SkubanZoran SkubanManager in Vital, food producer