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Bank Republic to Launch New Diversified Franchise Offers in 2011

Published: February 2, 2011 | 9:37 pm
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“My arrival coincides with the new period, thus my strategy is clearly to be fully “back to business”.  Mr. Christian Carmagnolle, new CEO of Bank Republic, SOCIETE GENERALE Group.


Bank Republic is meeting New Year with the new CEO. As Mr. Christian Carmagnolle, the new Chief Executive Officer of Bank Republic, SOCIETE GENERALE Group told The COMMERCIAL TIMES during the interview, the major goal his predecessor Mr. Gilbert Hie achieved was the comprehensive integration of the Bank Republic into the Societe General Group model, culture and values. According to Mr. Carmagnolle, the beauty of the country was an important component of my choice to join Bank Republic. Bank Republic’s new CEO delivered detailed answers to our newspaper about the bank’s new getting fully “back to business” strategy in 2011.


Q. New CEO, New Approach, New Strategy was the headline of the press-release issued last week. How would you, as a new CEO of Bank Republic, define the new approach and new strategy meaning? What concretely should we expect beyond this ‘New’ word? Starting from 1st of December, you joined Bank Republic as the CEO substituting Gilbert Hie, the former CEO, who efficiently completed the 4-year mission term. Before launching the new approach and new strategy activities how would you assess the prior development of the bank? What are the most successful steps made by Bank Republic in Georgian market thus far?

A. From the date Bank Republic became majority controlled SG subsidiary, many changes have been made and many events appeared.

Mr. Hie, the former CEO succeeded to implement SG governance principles and internal processes. He inspired the main SG values within all the staff at the same time he developed the business.

During this period approximately 40 new sales points have been open and all of them were equipped and furnished in accordance with SG standards.

A comprehensive commercial strategy was put in place to balance the retail and corporate segments, leading to significant number of clientele growth and, in the same time, increase of the loans and deposits portfolios.

The number of employees jumped from 480 to more than 1000 persons, almost doubled, a large majority of them actively participated to intensive training sessions to improve their professional skills and enhance the performance efficiency.

During roughly 2 years, after 2008 dramatic events, all banking sector faced the financial obstacles. At this time, Bank Republic diverted the major attention to finding the less painful solutions for its clients to avoid the worse case scenarios on their side, thus putting the Bank in less visible place before starting the recent active lending campaign.

During this hard period, Bank Republic was trying to put in place sustainable solutions taking into account the long term relationship with its clients.

Now, looking back to the period from 2006, in addition to our success in commercial point of view, the more important goal that my predecessor achieved was the comprehensive integration of the Bank Republic into the Societe General Group model, culture and values. The crisis tested our resistance and achievements and demonstrated the resilience of our business model and the sustainable relationship vis-à-vis our clients.

This strategy was costly in terms of the financial results. We maintained a stable level of employees despite a significant drop in new loans productions and spent a lot of time to manage efficient soft collection and recovery departments.

My arrival coincides with the new period, thus my strategy is clearly to be fully “back to business”.

The difficult market conditions we faced will help us to fine-tune and adapt our commercial strategy. We have learned very food lessons from the crisis and now we are more resistant and more capable to rebound properly.

Despite unfavorable results, our business model, through the constant support of our shareholders, demonstrates the highest quality features including but not limited to the flexibility, strong and healthy financial liquidity and sound financial position worldwide.

In addition to SG financial support, we take our competitive edge of our membership and share all the best practices within SG Group to improve our “time response” to our clientele demands and expectations, including competitive offers on products, quality of service and innovative solutions.

Several important projects are already actively underway and we will enlarge them with “quick win” solutions and much more long term changes as well.

It is a very interesting and challenging period I start and I am fully confident on our capability to succeed, as Bank Republic did before, thank to our team which is that  motivated by this challenge. To significantly support and stimulate our action plan I personally will use my knowledge and experience I developed and gained during my former position as Deputy Head of Komercni Banka network in Czech Republic.


Q. How challenging would you say the local banking sector is? “With the new CEO, BR will continue the implementation of the innovative strategy approach oriented on customer needs, their personal and business interests, with the significantly eased terms and conditions, ultimately leading to increase of the market share,” press-release says. What will be the major focus-power of Bank Republic conditioning its further market share growth?

A. We launched very attractive, competitive and special offer in December to say to our clients that “Bank Republic is here to support implementation of your important projects”.

Our clients were positively impressed by our mortgage, auto and consumer loan offers in addition to our regular range of products and solutions. Looking to the first weeks of commercial results, I should consider it to be the real success.

Nevertheless, our ambition is to do much more than a special campaign and it is too early, for example, to appreciate the market trend on mortgage lending activity.

We will elaborate and thoroughly consider the issue later, but today we can declare that our ambition is to better know ours clients to better serve them and be closer to them. We need to develop a very open and trustful relationship with them and we need to permanently adjust our offer to their individual situations and goals.

This strategy concerns not only individual clients but also micro segment clients and corporates as well.

You understand that this strategy requires implementation of the innovative products in short time, creation of the new client approaches via branches network and alternative channels as Internet, phone, etc, linked to high quality service whatever is the chosen channel, quick and efficient response time for financing applications, and so on.

As I already explained, we are actively working on solutions, requiring step by step development and final implementation of the targeted mission.

I already demonstrated this strategy to Bank Republic staff and now you give me opportunity to inform our clients and prospects about our ambitions.

Q. Your very first career step in SG was undertaken in 1972, in corporate direction, being later promoted to Deputy Executive Director in SG affiliated Komercni Banka in Czech Republic. How do you see yourself as the CEO of a commercial bank in Georgia considering your rich experience in banking industry?

A. I am impressed by the energy of Georgian people and I need to provide them with all my conviction, best practices and experience they will use in a proper way with enthusiasm to improve our efficiency to the benefit of our clients. I feel, in every meeting, in every contact with my team, a high expectation and responsibility to perform and to be successful. My personal challenge is to answer their needs.

Q. It was also mentioned that you’re interested in the Georgian nature and culture. Have you been to Georgia’s regions and what do you like most about Georgia’s nature? In respect to the local national culture, what impressed you most? How actively will Bank Republic be involved in CSR projects focused at Georgian culture and nature?

A. To be frank, the beauty of the country was an important component of my choice to join Bank Republic. In fact, it was a shared choice with my wife to live in such a nice country. We are fan of treks, Ultra trails and such sport activities and we plan, for the next years to come, to visit every region using paths rather than big roads, to discover amazing landscapes and share good time with warm people living in small villages and cities.

We like authentic tradition and we discover gradually different aspects of the culture, so rich and diversified depending on the regions and the residents.

As you know, CSR is a long term action done within SG group worldwide. In Georgia, BR is actively implementing the CSR projects according to the general strategy and directions to create the additional benefits for the society, since we care, share and respect each citizen, client, our stakeholder and society as a whole.

Being socially responsible for BR is to have the specific purpose and be committed to achieving specific results, where the corporate purpose is not to reach financial results only but also concerned with attaining the highest possible social and ecological quality. Corporate Social Responsibility is a concept not an obligation and we day by day take responsibility towards our clients, staff, shareholders, suppliers, and society as a whole.

CSR actions are regularly implemented by the Bank and staff members as well to secure the additional benefits for the citizenry. Bank Republic, being socially responsible organization has been already recognized by society and has been awarded the prize and diploma for CSR activities.

Q. Bank Republic, Employing more than 1000 staff in its 49 branches and service centers, is a leading commercial bank with rapid expansion of operations in retail and financial Services in Georgia. How ambitious do the bank’s further retail expansion plans look in 2011?

A. During 2011, our ambition is to attract new clients and intensify the lending activities, diverse banking operations and services with our existing franchise. A new attractive day-to-day banking offer will be launch during the first semester. We plan to change our retail client portfolio management step by step, to be closer to our client. We will adapt our offer to different segments of our franchise, from the VIP clients to the young student starting in the studies.

We also intensify our approach to micro segment, based on better knowledge of their activity and our capability to answer their specific needs.

We need to be perceived as the most reliable bank, the most desired bank of the market.  We will adapt gradually our organization, our processes and our communication to properly fit to this strategy. This is our ambition and 2011 is the first step for a long run… We will strengthen and led the strategy of the Universal Bank in Georgia.

Q. In respect to corporate line, what will be the bank’s main focus? How impressive is Bank Republic’s share in this direction currently?


A. On corporate side, we already adapted our internal organization by dedicating a responsible banker per client as an instance, in charge of the global relationship with him. We need to develop the skills and professionalism of our bankers through the internal training thus properly coaching them to secure the opportunity for our corporate clients to be served by the good and reliable professionals able to understand their situation and problems and be proactive to bring the solutions.

We plan to intensify our trade finances offer, thank to our belonging to SG group. We will bring relevant range of service vis-à-vis each client. We already developed sophisticated solutions with Georgian “top class” clients, in close relationship with our Investment banking activity in SG and we need also to bring user friendly and effective solutions to medium size enterprises.

Q. One of the major advantages as bank always stresses is that by opening an account with Bank Republic, you entrust the money to Societe Generale, one of the leading financial groups in the world, a stable guarantee for the safety of your money. Does this SocGen confidence work equally well both with Georgian and foreign clients?


A. The image an individual client has for his bank and the reputation or operational risk sensitivity the CFO of a large enterprise develops vis-à-vis his bank are not the same. Our Black and Red logo is better appreciated by sophisticated clients who know about financial principles and meaning of international rating. But for a large majority of people, the impact of the brand is less important than the quality of the service of the bank secured on the daily basis.

For sure, we are a local bank fully linked to the worldwide recognized international image and any professional should explain it in terms of safety, not only on financial side but also regarding operational and reputation risks. But I need to stress that the logo is not the only way to attract our client, it’s our service level and reliability which allows our clients’ confidence.

Q. How would you assess Bank Republic’s success as far as the two major directions-loan and deposit activities are concerned? How promising are expectations for 2011?

A. In 2010, we were able to better develop our deposit than our loans. On one side, thank to our trustful image, we attracted significant deposits from our clients, mainly VIP clients and firms. On lending side, I already explained the reasons why we were less “visible” in the market. Our objective in 2011 is to better balance our loans and deposits activities and improve our day-to-day banking revenues, in line with added value services.

Q. How do you think what do people see the red-and-black logo and what’s your view of what should people’s associations be?


A. The red-and-black logo is already widely associated with the Western modern standards, superior quality of service and innovative products and solutions, imported from developed countries and tailor made to the local peculiarities. People already get used to our “international” belonging, thus we do enjoy the stable and reliable status.

Q. How does Bank Republic congratulate on Happy New Year to its employees? Do you plan to arrange a corporate party?


A. This year, I don’t plan to repeat the huge Happy New Year party organized last year, not only because budget constraints but mainly because I need to more divert the energy of our team to serve our clients during our special offer which is underway now than to prepare for such an event. It does not mean that we will not do a great event next year. I am open and we will fine-tune such a project during the year. The main idea and purpose of Corporate Gatherings is to enhance the team spirit, get staff in one group, be friends, share ideas, all be in one team to build up a real strong company. Thus, such corporate party can be arranged any time during the year, and not specially planned for New Year.

Q. What about your family and friends? You have a big in Marseille, France. Are they also living here in Tbilisi? For winter holidays will you stay in Georgia or leave for France?


A. All our children finished their studies and are living either in Paris or in Prague for one of them. They plan to visit us in Georgia and will spend holidays to enjoy the country and have good time with us and our friend here. We have several friends in France, in different regions and also in Czech Republic. Thank to Internet, we keep in touch daily and exchange news and pictures. For winter holidays, we stay in Georgia and we will celebrate Christmas party on December 24th with some French friends, in Tbilisi and travel to Batumi during the weekend to enable my wife to discover the black sea I already saw during my branch trips in October. For happy new year, we will join our Chairman party to celebrate the event.

Q. What’s the best Christmas or New Year present you’ve ever received?


The best gift for Christmas is to be together with our family and for New Year, to celebrate with our friends and close relationship members, as we will do this year.

“During 2011, our ambition is to attract new clients and intensify the lending activities, diverse banking operations and services with our existing franchise. A new attractive day-to-day banking offer will be launch during the first semester. We plan to change our retail client portfolio management step by step, to be closer to our client. We will adapt our offer to different segments of our franchise, from the VIP clients to the young student starting in the studies,” Mr. Christian Carmagnolle, the new Chief Executive Officer of Bank Republic, SOCIETE GENERALE Group. (This quote will go with the photo)

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