Interview with Theano Thiopoulou
The new Executive Director of cdbbank (Cyprus Development Bank), Loukas Marangos, opens his papers in Financial “F”, in his first interview after taking office. Analyzing his goals and priorities, Mr. Marangos reveals in which areas the bank is focused and explains, among other things, how the data of the green economy will affect the financing of companies. At the same time, it refers to the risks that lurk for the banking sector after the outbreak of the pandemic and describes the moves of cdbbank to manage the issue of Non-Performing Loans.
Recently, Mr. Marange, you have officially taken over as CEO of cdbbank. What are your main goals?
Our main priority is the establishment of cdbbank as a flexible bank, which will meet the current requirements of the business world of Cyprus. The small size of cdbbank is one of its most important comparative advantages, as it enables it to provide personalized service to its customers. At the same time, the bank is one of the most reliable financial institutions in our country, with a long history in the Cypriot market and well-trained executives. Utilizing its human resources effectively, in combination with the application of new technologies and modern digital media, we seek to make the bank a reference point for the domestic business community.
Turn to Green Banking
What areas is the bank focusing on today? Are you looking to expand your activities in other areas?
The main activity of cdbbank is still Corporate Banking and it remains a bank with a clearly business orientation. At this stage we focus on enriching the range of products and solutions provided by the bank, aiming at the complete coverage of the constantly changing financial needs of the business community. At the same time, the European Green Agreement, which aims to improve the well-being and health of citizens, redefines the framework in which we must move. Guided by sustainable development and corporate responsibility, we adopt Green Banking practices, which are integrated into our business activities while promoting new specialized financial products and services that actively support the green business economy.
The pandemic has dealt a severe blow to many businesses. Has cdbbank shown flexibility with customers who are unable to meet their financial obligations?
The bank remained a helper and close to its customers throughout the pandemic. We tried, in addition to the implementation of the installment suspension plan, to offer our customers solutions that are tailored to their own needs. The size of the bank has helped significantly in this effort, as we know our customers very well. Let's not forget that most customers have a long-term cooperation with the bank and, therefore, we have a very good picture of their operating framework and the opportunities that they could take advantage of immediately or in the future to recover.
Negative interest rates and liquidity
What other challenges do banks face today?
I would say that the current period is particularly difficult and demanding for banks. Parameters that affect banks' profitability, such as negative interest rates and the management of excess liquidity, make decisions about their future steps even more difficult. Any decisions made by banks to boost their profitability and channel excess liquidity should be based on assessing and managing the risks they can take.
Cyprus to become a technology center
The need to diversify the development model of the Cypriot economy is currently being hotly debated. In what areas do you think development should focus?
Cyprus should invest in its strong features, seeking to strengthen specific sectors that present substantial growth prospects, such as the sectors of technology, education and logistics. Our country has some very high quality features, among which is its highly trained human resources with relatively low labor costs, while at the same time, due to its strategic geographical location, it can offer easy access to the markets of the Middle East and Europe. Therefore, it has the specifications to become a modern technology center, a perspective that our country should pursue.
What is the role of a small bank in trying to attract new investments?
The primary goal of cdbbank is to finance the real economy and its contribution to the economic development of Cyprus. As I mentioned, technology, education and logistics are key sectors, with a positive outlook. Our adaptation to the data of the green economy will directly affect the financing of companies, which in turn will have to shape their environmental footprint. Opportunities are also present for start-ups and companies focusing on renewable energy sources, as well as green investment funds. Certainly, in order for a bank to be an attractive choice, it must be able to respond immediately and flexibly to the requirements of its customers, to provide high quality services and to have an effective decision-making mechanism, which will be supported by modern systems.
FinTech: Enemy or ally?
In your opinion, are fintech companies an enemy or an ally of banks?
FinTech as a term, although used to describe some companies such as technology, start-ups or financial service providers, which have created new data in the field, I would say it is more of a designation of technologies that banks can use and integrate in their procedures. The use of internet technologies, cloud and new software and mobile phones, has positively affected the work of banks, since today there is the possibility to provide various banking services efficiently and at low cost. I therefore believe that FinTech is neither an enemy nor an ally of the banks. I believe that the challenge in general for the most traditional banks in Cyprus is to be able to coexist with the new players in the financial sector. After all, every organization must keep up with the trends and developments in the field in which it operates, if it wants to remain competitive and successful.
NPLs continue to plague the Cypriot banking sector. How does cdbbank deal with this issue?
From the beginning of the financial crisis and the peak of the number of NPLs (Non-Performing Financing) in the Cypriot economy in 2016, a significant effort was made to manage them, which has intensified in the recent past. Undoubtedly, the pandemic and the measures that have been taken, such as the suspension of sales, have affected these efforts and have had a negative impact on the real economy. Assessing these effects, we have adapted our strategy, including, in addition to the more traditional practices, such as restructuring, and other solutions for their more immediate management, ie debt recovery.
Cdbbank supports society
You mentioned corporate responsibility before. Is cdbbank supporting the work of the Karaiskaki Foundation in this context?
The alleviation of vulnerable social groups is a key pillar of the corporate responsibility program implemented by cdbbank. We have a very special and close relationship with the Karaiskaki Foundation and we are really proud to be one of its main allies. Cdbbank contributed to the creation of the first specialized diagnostic and research center for pediatric oncology in Cyprus, which is an initiative of the Foundation, supporting its operation and meeting the staffing needs of scientific staff. The work and the social contribution of the Foundation in our place is invaluable and we are very happy that we are putting our own stone in the fight against childhood cancer.
