reform experiences in public sector banks 9 april 2003 world bank
Post on 19-Jan-2016
21 Views
Preview:
DESCRIPTION
TRANSCRIPT
World Savings Banks Institute (WSBI)European Savings Banks Group (ESBG)
World Savings Banks Institute (WSBI)European Savings Banks Group (ESBG)
Reform Experiences in Public Sector Banks
9 April 2003
World Bank
ESBG MembershipESBG Membership
26 Members from26 CountriesKey Figures (1 January 2002)
Total Assets: 2,890 billion EURNon-Banker Deposits: 1,708 billion EURNon-Banker Loans: 1,623 billion EURBranches: 65,813Staff: 734,359Institutions represented: 955
WSBI MembershipWSBI Membership
101099 Members Members from from 9292 CountriesCountriesKey Figures (1 January 2002) Total Assets: 6,414 billion EURNon-Banker Deposits: 4,602 billion EURNon-Banker Loans: 2,152 billion EURBranches: 201,136Staff: 2,421,148 Institutions Represented: 1,118
OutlineOutline
Features of a well functioning Retail Bank
Reform approaches
Common factors frustrating reform
Example of a successful transformation
Conclusions
What is a Savings Bank?What is a Savings Bank?
Retail Bank
Market focus:
»Private Individuals
»Households
»SMEs
»Local Authorities
Broad distribution network
Acts in a socially responsible manner
Examples of Savings BanksExamples of Savings Banks
State-owned banks
Cooperative banks
Private Foundations
Joint-stock banks
(Banque et Caisse d’Epargne de l’Etat, Luxembourg)
(Caisse Nationale des Caisses d’Epargne, France)
(Cajas de Ahorros, Spain)
(Lloyds TSB Bank, UK)
Examples of Savings BanksExamples of Savings Banks
NB. A successful bank is not determined by its ownership structure
Features of a well-Features of a well-functioning savings bankfunctioning savings bank
Sound Corporate Governance
High quality management
Sound business plan
Good financial management
Well trained and motivated workforce
Appropriate products and services
Optimum size and combination of branch networks and distribution channels
Streamlined internal processes
Institutional Integrity
Proficiency
Efficiency
Independent legal and management structure
Confidence of all stakeholders
Transparency towards owners and customers
Instruments used in the Instruments used in the Reform ProcessReform Process
Technical Assistance
Bank Twinning
Management Contracts
Selling of strategic stakes
Must be appropriate to the beneficiary’s needs
Management commitment essential
Caution amongst some Western banks:
- Concern re beneficiary’s desire for ‘most favoured status’
- High demand for study tours
Caution amongst some Western banks:
- Reputational risk from problems outside contractor’s control
- Care re contractual liability
A foreign bank rarely wishes to remain a minority investor for very long
The process of managementThe process of managementof changeof change
I Know
I Can
I Will
If unable to say this, the change process will fail
Common factors frustrating Common factors frustrating reformreform
Political interference in internal affairs
Corporate inertia
General resistance to change
Low level of skills
A successful transformation A successful transformation Nova Ljubljanska BankaNova Ljubljanska Banka
Full service bank active in retail, corporate and investment banking
0.00
1,000.00
2,000.00
3,000.00
4,000.00
5,000.00
6,000.00
7,000.00
8,000.00
9,000.00
1997 1998 1999 2000 2001
Mill
ion
EU
R
Total assets
Non bank loans
Non bank deposits
Nova Ljubljanska BankaNova Ljubljanska Banka
Capital adequacy ratio
Return on assets Cost to income ratio
1997 16,80% 1,26% 60,30% 1998 15,40% 1,12% 59,20% 1999 15,20% 0,97% 62,95% 2000 13,50% 0,93% 59,39% 2001 12,80% 0,94% 61,87%
Nova Ljubljanska BankaNova Ljubljanska Banka
Market share Non-bank deposits
0.00%
10.00%
20.00%
30.00%
40.00%
1997 1998 1999 2000 2001
Nova Ljubljanska BankaNova Ljubljanska Banka
Number of branches & agencies No. of employees No. of ATMs
1997 83 2.736 122 1998 84 2.689 155 1999 110 2.800 206 2000 119 2.904 249 2001 191 3.979 433
Nova Ljubljanska Banka Nova Ljubljanska Banka Reasons for successReasons for success
Slovenian authorities created an environment conducive to reform
Capable leadership of a strong President and management team
Clear business and strategic objectives Redesign of its business processes and
introduction of new IT Ongoing process of investment in management
and staff education and development
ConclusionsConclusions
1. Ownership per se is not the determining factor in whether or not a bank is successful
2. Good corporate governance is key to a well-functioning public sector retail bank
3. Common factors that frustrate reform are political interference, corporate inertia, resistance to change, and low skill levels
ConclusionsConclusions
4. The key to a successful reform process is PEOPLE
5. International aid projects facilitate the process of reform
For further information about us:For further information about us:
www.savings-banks.com
e-mail: info@savings-banks.com
top related