Last year, we interviewed Vladimir Eftimoski, CEO of Stopanska Banka a.d. Bitola, about the banking sector in Macedonia. In 2017 we have caught up with him again. In this interview, we asked him about what’s new, both in Macedonian banking trends and his forward-thinking bank.

Common to all countries of the Western Balkans, economic conditions have been turbulent since the 2009 economic slump. Some of this turbulence is also centred on the growing instability of the European Union in the wake of an ongoing recession, bailouts, and the political impacts of ‘Grexit’ and ‘Brexit’. Compared to other West Balkan countries, however, Macedonia has done remarkably well, showing mostly stable growth in GDP and a steady increase in employment, according to a 2017 report by the World Bank Group. These upward trends have continued this year.

In the first half of 2017, the Macedonian banking sector has shown continuous stability and increased levels of liquidity. In conditions of reduced foreign demand, which impacted the limited growth in the domestic economy, additional implemented amendments in monetary policy have stimulated the growth of loans and provided support to the private sector.

We talked to Vladimir Eftimoski, CEO of Stopanska Banka a.d. Bitola, about the Macedonian banking sector in 2017.

What’s different about the Macedonian situation that makes their economy more resilient?

Macedonia is a country with a small open economy, where, as a principle, external economic movements do not have a major impact on the domestic product demand and spending.

In other words, we are a small-scale production country in absolute numbers, and regardless of how much we produce the quantity can be absorbed by foreign markets if competitive products are offered.

Consequently, our corporate sector was not considerably affected by the world economic crisis. The internal political situation is stabilised due to the constitution of the new government, which resulted in normalised conditions for economic and financial growth and prosperity.

So what’s new in 2017 in the Macedonian banking sector?

One trend is a change in customer behaviours and the increased move towards cashless transactions.

Macedonia is lucky compared to the countries in the region. We have good communication infrastructure, strong mobile network coverage and Internet access across most of the country. Most of the population lives in the Skopje region, which geographically consolidates infrastructure investment.

While particularly older customers and retail still prefers to use cash payments, the corporate sector and younger clients are increasingly turning to cashless systems.

The banking system – and particularly medium-sized banks such as Stopanska Banka a.d. Bitola – is focused on introducing new electronic services and optimising existing ones. Our Bank has upgraded its electronic system, introduced an M-payment System, upgrading its website, and the issue and processing of two new brands of MasterCard have begun.

To encourage customers to use these services, we have introduced financial incentives such as bonus schemes. Wide-ranging technical support is provided to older clients to enable them to switch without causing anxiety. We also think the possibility of 24-hour access and fast service without queuing will be popular.

Will these technological developments mean an end to the branch system?

We are obviously trying to encourage new habits in our customer base, and we want to make sure that the needs of younger generations are catered for.

However, we have to be aware that these developments are taking place in conditions where clients have still not changed their habits entirely. So to serve them properly, a widespread branch network is needed throughout the country.

Where does risk management figure in Stopanska Banka a.d. Bitola?

Risk management is vital for our clients and Stopanska Banka a.d. Bitola.

We have a specialist sector and service in charge of risk management, working in compliance with the world’s banking standards, which divide sales and risks.

The sales sector is responsible for monitoring business and clients’ plans by analysing their balance. The risk sector executes monitoring through the lens of risk. This sector perceives soft spots in their balances, analyses cash flow during the loan period and the financial repayment capacity of the relevant client.

To dig down more deeply, sales is mainly focused on the advisory and analytical aspects of income growth, while the organisational part of risk management makes analyses as to whether the relevant client has dimensioned its business in the optimum profitable range, and whether its liquidity and solvency is sufficient to realise the undertaking.

Both sides of this service are critical for the client to undertake a sufficiently acceptable risk that both increases its profitability but also avoids the exposure of our Bank to a loan risk.

What other projects are you working on?

We are continuously developing a number of projects.

In addition to ongoing internal projects to optimise our operations and operational technology, we are developing new ways to improve and evolve new services and products.

At the moment we are completing three key projects aimed at the development of a new, user-friendly website, introducing two new MasterCard products with contactless payment, an M-payment service and a multichannel distribution system.

And we will not stop here. We have some projects aimed at upgrading our information system. These projects will simplify and accelerate systems, helping us to become more competitive and efficient in the market.

And what other ideas are in the pipeline?

Stopanska Banka a.d. Bitola is focused on an activity that has not been executed by any bank or company in Macedonia. And that is that we are in the process of issuing a corporate bond as a hybrid financial instrument.

This idea is part of a strategy to attract strategic investors that will further support the development and growth of the Bank. The assets from sales of the corporate bond will be used for credit activities in corporate sector which will support Bank growth in the next five years.

We intend to impose ourselves in the Macedonian banking market, with dominant domestic capital that will be of interest for acquisition or recapitalisation by a foreign strategic partner.  This approach, in the technology segment as well as the other financial, operational segments, will distinguish Stopanska Banka a.d. Bitola as the most innovative, modern and efficient bank in the Macedonian banking market.

Finally, what ‘good works’ do you have planned?

One of our strategic objectives, alongside our business policy and the development plan, is to promote the social good and social wellbeing. So Stopanska Banka a.d. Bitola has made donations to different associations for children with health disorders and supported various public art and sports events.

These activities will continue in the future and Stopanska Banka a.d. Bitola because we believe that Macedonia doesn’t just need a dynamic economy, it also needs a caring society. So we will continue to take an active role in all activities that enhance the community and social welfare of the country’s citizens.