homepage_name! > Editions > Number 107 > Interview - Slavica Pavlovic

Slavica Pavlović, President of the Executive Board of Eurobank a.d.

15 Years of Successful Business in Serbia

We strive to be not only a reliable, but also a proactive partner to our clients. Thanks to this approach, we are in a position to establish very good cooperation with our clients and, if necessary, advise them about connecting with compatible companies on the local market, and also promoting cooperation with potential partners abroad, particularly in Greece, Bulgaria and Cyprus. Also, many years of successful cooperation with international finance institutions, above all with the International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD), have made it possible for us to offer favorable conditions for financing import-export activities. Our clients recognize the attractiveness and quality of our cooperation with international finance institutions, evidenced by several EBRD recognitions to Eurobank for being the most active issuing bank in Serbia. We also strengthen the SME (Small and Medium-Sized Enterprise) segment by supporting the application and lending process within the IPARD (Instrument for Pre-Accession Assistance for Rural Development) program.

Ms.Slavica Pavlović, President of the Executive Board of Eurobank a.d. speaks for Profit magazine.

1.Mrs. Pavlović, please tell us something more about yourself. Where were you born, where were you educated and what has influenced your career?

I was lucky enough to grow up in two cities. I spent the earliest days of my childhood in Požega, where my parents worked and where I was born, and then in Belgrade, where my family moved when I was 11 years old. Thus my growing up was marked by two different milieus, each of them having its own advantages. In my memories, Požega is where I spent a childhood without boundaries, whereas in my teenage years Belgrade opened some new, exciting possibilities up to me. The Požega of my childhood days was a carefree and warm place, whereas Belgrade motivated me to think about my future. My parents come from the financial industry, so after finishing the Fifth Belgrade Grammar School I naturally followed in their footsteps by studying at the Faculty of Economics at the University of Belgrade. It can be said than my choice of profession was inherited from my family.

2.You became President of the Executive Board from the position of Finance Director in 2016. What has the new position brought?

Finance is an extremely dynamic profession which implies constant development and adjustment to new trends and market developments. On the one hand, this makes it a demanding profession, yet on the other hand it is extremely interesting. The position of President of the Executive Board of Eurobank has brought a new kind of dynamism as well as new challenges and responsibilities. However, after many years of dealing with finance, this position has enabled me to turn to new things, and to continue with developing and improving my knowledge, so I am grateful for being given the opportunity and trust.

3.In your opinion, what are the main differences between the banking market in Serbia and the banking markets in neighboring countries and where do you see potential for growth when it comes to your bank?

Although each country represents its own particular market with specific, local characteristics, it can be said that there are a lot of similarities between the banking markets in Serbia and its neighboring countries. In the majority of Serbia’s neighboring countries there are numerous banks operating (20 - 30 on average), which was caused historically by the initial strong growth during the nineties and the noughties when foreign banks rushed to take these markets. This is why it was expected that there would be a consolidation after the initial expansion. The global financial crisis has, however, significantly weakened bank operations and reduced the possibilities of growth. Both in our country and the region there is a similar level of lending, i.e. the ratio of loans and the national GDP, which is currently at 45%, and which indicates that there is significant room for growth. The situation is also similar in terms of capital adequacy, which is approximately 20%. In terms of the differences between the Serbian banking market and banking markets in the region, we can talk about high level of “Euroisation” of the local market due to the fact that two thirds of the loans and more than half of the deposits are indexed in foreign currency, which is significantly above the level of other countries in the region (below 40%). For this reason, unlike other countries, we are more exposed to Euro fluctuations. Also, in relation to the region, the level of non-performing loans (NPL) in Serbia is significantly higher, but thanks to the changes in regulations and efforts towards solving this issue, we gradually approached the regional average last year.

4.We are all aware of the fact that using digital channels has been taking primacy over traditional banking. Please tell us something more about digitalization in the banking sector from Eurobank's point of view.

In recent years, the process of digitalization in the banking sector has been speeding up, above all due to the expectations of clients to use their banks’ services in this way. Our experience shows that digital channels are currently used for balancing accounts or other products, and checking for various transactions. However, due to the obvious benefits offered by digital channels, an increasing number of clients use more advanced options such as applying for loans, opening bank accounts without visiting the bank, and communicating with the bank by means of a scheduled phone call, e-mail or by means of popular applications such as Viber or Facebook.

Based on the popularity of Eurobank's m-banking platform, we can conclude that the omnipresence of mobile devices is orienting the introduction of new, contemporary services towards mobile banking. In addition to new products such as a mobile wallet or using an ATM without a card which m-banking platforms could offer in the future, the greater use of virtual assistance could also allow transactions to be made and information given in a way tailored to client needs. Additionally, the application of biometrics in the process of client identification would make the use of digital channels easier, thereby solving open dilemmas regarding these technologies in the near future. We are soon expecting changes in legislation which will make it possible to digitalize contract documents and introduce the remote identification of clients.

We can therefore talk about a kind of digital transformation of business in the whole banking sector. Of course, the goal of each and therefore our bank is to lead the trends in innovative solutions and products so that it will be the bank of first choice in this segment.

5.Eurobank is especially focused on the economy and Small and Medium-Sized Enterprises. How do you help your clients in improving their operations and achieving their planned objectives?

We strive to be not only a reliable, but also a proactive partner to our clients. Thanks to this approach, we are in a position to establish very good cooperation with our clients and, if necessary, advise them about connecting with compatible companies on the local market, and also promoting cooperation with potential partners abroad, particularly in Greece, Bulgaria and Cyprus. Also, many years of successful cooperation with international finance institutions, above all with the International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD), have made it possible for us to offer favorable conditions for financing import-export activities. Our clients recognize the attractiveness and quality of our cooperation with international finance institutions, evidenced by several EBRD recognitions to Eurobank for being the most active issuing bank in Serbia. We also strengthen the SME (Small and Medium-Sized Enterprise) segment by supporting the application and lending process within the IPARD (Instrument for Pre-Accession Assistance for Rural Development) program.

6.Taking into account the stagnation of the market worldwide, it is essential to maintain the bank’s portfolio and to improve its quality. How do you solve this issue in Serbia?

We find market niches and recognize moments when certain economic segments enter expansion or recession. Consequently, we readjust our support and operations by which we avoid the occurrence of non-performing loans and additional provisions on the one hand, while increasing the portfolio and the volume of margins on the other. Eurobank is recognized on the market and is one of the leading banks in the area of project financing, especially of real estate, and we are among the rare banks on the market that can boast of having a trained and experienced local team that provides the agent services for syndicated loans. This especially classifies us as a preferred partner in syndicated loans that is able to meet all of the necessary requirements, both by customers and other syndicate participants. Recently, we have been considering and gradually entering the segment of renewable energy sources, which is where we see significant potential for further growth, with regard to world trends and the growing interest of local actors.

7.This year, you are celebrating your 15th anniversary of successful business in Serbia. If you look back, from the very beginnings of your business until now, what are the key pillars of your business model which have helped you survive on the competitive market?

Eurobank is a universal bank, i.e. a bank that provides all types of banking products and services. In an extremely competitive market, it is necessary to have flexibility and diversity, which enables you to be present in all segments, making it possible to achieve results and have a successful business. Since the beginning, we have set ourselves the task of being the bank of first choice for our clients and partners and we have consistently pursued that.

However, the foundations of every organization are its employees, and Eurobank has a really exceptional team of dedicated professionals who do not hesitate to try out their abilities in new challenges and projects. Their enthusiasm and creativity, as well as their hard work and commitment, have built up and continue to develop our bank. The jubilee Eurobank is celebrating this year has given us an opportunity to look back on the previous 15 years, and we have noticed with great pleasure that a large number of employees have been with us since the beginning. Some of them joined us as young people eager to learn and improve, and now they are mature individuals and experienced managers who are leading and inspiring other young people among us.

Thanks to the diverse range that we offer, but also proactivity and warmth of our employees, our clients recognize Eurobank as a reliable partner. Customer confidence in Eurobank is certainly one of our greatest achievements and it motivates us to achieve success in future business projects and ventures.

1.From your professional point of view, how is the banking market going to change in the next five years?

The banking market will develop in line with developments in the real economy. If the GDP growth rate, positive development in industrial production and investment inflow show stability, it will inevitably reflect positively on developments in the banking sector too, by an increase in the demand for loans. At the same time, the predictability of business will be improved, which is very important because it facilitates long-term planning. Of course, in order to have that, it is necessary to avoid any new crises, either global or local. Also, the market will become more sophisticated, which we can notice in the development of new digital channels or new products and services, such as foreign exchange risk protection or investment banking.

Due to transition towards the European Union markets, in the future we should certainly expect an increased number of regulatory requests, and consequently banks will have to utilize significant resources, both technical and human.

2.For a few years now, non-performing loans have been a major problem in the local market. What is the situation in your bank when it comes to the collection of non-performing loans?

At one time, the level of non-performing loans in Serbia was relatively high, and Eurobank was not an exception from the market in that regard. However, due to intensive work on solving the non-performing loans issue, the rate of non-performing loans in the banking market was reduced to 9.5% by the end of 2017, with further reduction expected. I believe that the national strategy for solving the non-performing loans issue adopted in 2015, as well as other changes in regulations have made it easier to have a faster and simpler process of collecting and writing off the loans which, together with relative market stabilization, have contributed to a decrease in the rate of non-performing loans.

3.An important part of Eurobank's business strategy is corporate social responsibility, too. Which projects have you already completed, which of them are you particularly proud of and which areas will be your focus in the coming period?

We consider corporate social responsibility to be extremely important and inseparable from our business, and also a means of making a contribution to the community in which we have been doing business successfully for 15 years now. This is why we have launched a series of corporate social responsibility projects over the years. In March 2006, a comprehensive corporate social responsibility program named “We Invest in European Values” was launched, and we have so far invested 4.5 million euros in this program to support health care, ecology, education and an inclusive society. We are especially proud of the “Big Heart” project which we have been implementing for 8 years now, together with the “Ana and Vlade Divac Foundation”, thanks to which we have renovated playgrounds and facilities in more than 40 kindergartens, schools and healthcare institutions. We have also supported the best graduates from high schools in Serbia and the Republic of Srpska through cooperation with the “Crown Prince Alexander II Foundation for Education”.

In 2014, Eurobank has established cooperation with Manchester United football club, within which we have helped Aca Kovačević’s football school “KMF Mungosi” and supported the Serbian Sports Association for People with Disabilities, which has formed a football team for the first time in its history.

In March this year, Eurobank launched a new corporate social responsibility project entitled “School Designed for You” which aims to improve working and learning conditions in secondary economics schools in Serbia. Every transaction made by Eurobank customers with their charity card will have a certain portion of the amount earmarked for renovating classrooms and buying necessary equipment, at no extra cost to cardholders. Also, a contest for designing an affinity card for all secondary school students has been announced, and the best work will be awarded a two-week English language course in Great Britain. This project, supported by the Ministry of Education, Science and Technological Development is much more than renovating classrooms, as students will have the opportunity to gain first-hand knowledge about banking from our colleagues as guest lecturers and to experience in practice what their future profession looks like if they decide to work in banking.

Our engagement in the field of corporate social responsibility has received much recognition and many awards, which additionally motivates us and strengthens us in our intention to continue showing daily through business activities and commitment to the community that Eurobank is a reliable partner to Serbian society. When speaking about the objectives of Eurobank in Serbia, we wish to stay the bank of first choice for our clients, natural and legal persons, operating with a sense of responsibility towards our employees, clients and the community.

13.We are all aware of the fact that working in the banking sector is highly stressful. How do you cope with everyday stress?

I believe that in any profession it is necessary to establish good balance between one’s private and professional life, because in different moments in life and under different circumstances they can serve as a support to each other instead of being in opposition. To find balance is difficult indeed, so I am trying to spend my free time with my family and friends and devote myself to activities which are relaxing and make me feel good, like recreational participation in sports.

14.If you could, would you change anything in your career up until now?

As is the case with all professions, my career has also been marked with numerous moments, both pleasant and difficult. However, I believe that such moments, together with all the people I have become acquainted with over the years, have enabled me to grow and develop both professionally and privately. I have been grateful for both my life and career paths so far, primarily because they have taught me to not regret wh

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