Interview in English
Disappointed
"ambassador"
By Margareta MOCREAC
The president of Mobiasbanca Groupe Société
Générale, Ridha Tekaia, is firmly convinced
that foreign investors are the best ambassadors of the country they work in. Yet, the
banker regretfully admits that no major new
investors, which
Moldova
needs like air, will
come to our country any time soon because of
widespread unfair competition and corruption.
"Given today's developments, I cannot encourage anyone to come to Moldova... Day after
day I see no improvement," the banker says. It
is especially sad to hear this from a foreigner
as they have always been much more optimistic
about developments and reforms taking place
in
Moldova
than the locals.
It
means that
things are indeed very bad and some radical
steps are needed.
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Б&Ф // июль-август 2015 г.
РУССКИЙ
www.profit.md
"Retroactivity in the law is
the worst – it is the enemy
of the business."
Б&Ф // июль-август 2015 г.
61
Profit: Mr Tekaia, your contract as president
of Mobiasbanca Groupe Société Générale was
extended this year. Have you expected such a decision?
R.T.: I would like to say that I was the one who
put forward the proposal to prolong the contract and
my employer, Groupe Société Générale, accepted it.
I considered that it was not opportune to leave the
bank during such turbulent times for the Moldovan
banking sector and the economy in general. In addition, I considered that I have not yet achieved all my
goals. So, I prolonged the contract for another 1.5
years, but the term could be further extended or, on
the contrary, reduced depending on results. With Société Générale we are quite flexible. What is important
is the achievement.
longer need to mention to our clients that we are a
trustful and transparent bank, they have convinced
themselves that we are.
My second achievement is the client base, which
has been extended and with which we have established mutual trust. This was proved once again during the market turbulences at the beginning of the
year.
The third achievement is the image of the bank
which has been significantly improved. Today we no
Profit: But according to what indicator would
you like Mobiasbanca to be in top three?
R.T.: ROE – Return on Equity meaning how
much capital you put in a company and how much
return you have on it. Today we have a 15% return on
equity, up from 4-5% several years ago. The increase
in ROE was a real challenge.
Profit: In an interview with our magazine
in 2013, you said that one of your goals was to
make Mobiasbanca one of the top three banks
in Moldova. In January-February 2015, Mobiasbanca, for the first time ever, achieved the third
best result in terms of profit (41.175 million lei).
Now it is in the fourth position but much ahead
of the bank in the fifth place. As the situation
looks now, will the bank be able to continue this
ascending trend?
R.T.: To be honest, profit is not an aim but a
consequence. We are not driving the bank to have the
biggest profit. What is important is to have a reasonProfit: So what were your three main achieveable portion of profit versus risks. It means that we go
ments during your first four-year mandate?
through all kinds of risk and sometimes we are even
R.T.: The first thing I am very proud of is the
too prudent. But this is our and our Group's natural
team, which is now much more mature. I know where
behaviour as we do not want to have ups and downs
they were a few years ago and where they are today
in profitability. This brings a bad international image.
and I am very proud of my colleagues. I would like to
Indeed, today the banking sector is showing a
say that five more people have recently joined the exequite high profitability but it is somehow a bit artificutive committee and now we have a perfect balance:
cial due to the big volatility of the foreign exchange
three expats (two French and one Czech from anmarket. We all should understand that someone has
other subsidiary of the Group) and three Moldovans.
to pay for this increase in banks' profit. Today this is
This demonstrates that there are real possibilidone by companies, but their situation is becoming
ties to have cross subsidiaries promotion to executive
more and more difficult. They will not be able to pay
positions and this opens new perspective to our ma15% or 20% interest rates on loans forever. Therenagers. I would like to mention that among our three
fore, in spite of the rather good results achieved in
Moldovan executives, two are women which I hope
the first half of the year, we expect a much more difwill encourage other women to take leading positions
ficult second half as there are always delays between
in Moldovan companies.
the cause and the effect.
So, yes, we are in the third or fourth
place
in terms of profit, definitely this
"I would really encourage each consumer who
is not the target we are looking at. What
one day will lose one penny from the three banks
is important is to have year to year reguwith problems or from any other banks to sue the
lar and consistent growth. We have been
employer who decided about his bank account rather
growing for three years in a row. If some
competitors are faster or slower or they are
than the bank. I insist on this because the bias behind
showing bigger or lower profit – it depends
this is corruption."
Ridha Tekaia
on their strategy.
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Б&Ф // июль-август 2015 г.
Profit: So what is your opinion about the $1
billion bank fraud? What does this speak about?
The general impression is that the regulating
agencies have not done their best to prevent the
dubious deals that took place ahead of the November 2014 parliamentary elections and as a
result of which a sum of money equivalent to almost 12% of GDP has vanished.
R.T.: First, I think that a part of this billion has
been re-injected in the country to make some major
acquisitions which could be easily taken back as compensation for the registered losses. Second, I would
say that the sickness of BEM did not start in 2014
but much earlier when the bank was controlled by the
state. When I arrived here in 2011, BEM was already
facing a number of management problems. In any
bank, the first responsible person is the shareholder,
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in this case the state, the second one is the regulator,
and the third is the audit company that prepares annual reports that are later approved by the shareholders.
You also have the supervisory board, the executive directors and, finally, the managers. I am not an expert
to say where exactly the responsibility is but, probably,
it is in all these chains, and not only at the managerial
level which was pointed out.
РУССКИЙ
Profit: Mobiasbanca's market share was 6%
in 2012. Has it increased since then? Some experts believe that it is too small for a bank with
such a strong international company behind.
R.T.: I will just mention that when you have several banks where one of the shareholders is serving
himself or his related companies in a non-visible and
non-transparent way, then for sure you make a distortion of the market share.
I was mentioning to my shareholders that although officially, in the last few years, we represented
some 9% of the market, I always felt that our real
market share, which includes only the real not the grey
economy, was between 12% and 15%. My feeling was
confirmed in January when we jumped above 10%,
after the story of the three banks, which are today
under National Bank's administration.
I am sure that we still have non-transparent banks
behaving unfairly. We still know almost nothing about
the real shareholders of some banks.
I would like to stress that, as long as our interests and the economy of the country are not touched,
we are not concerned about the way some banks are
managed and to whom they are providing loans. But
we are concerned about the domino effect of a possible second banking scandal that will impact all the
banks, including the healthy ones, clients and the
whole country. Something should be changed in Moldova because, otherwise, it will be impossible to avoid
rather big problems. Today, 1 billion USD has to be
compensated by state budget. I am not sure this could
not be repeated, while a new scandal could have disastrous consequences.
Profit: Now the big question is what to do
next: nationalize or liquate BEM, help or close
down Banca Sociala or Unibank. As an experiБ&Ф // июль-август 2015 г.
63
"The banking crisis in Moldova has taught us that even though you are trying
to do your job with coherence and rationality, you couldn't avoid not taking into
consideration the irrationality of the others because the market is small and you could
not survive by your own.
At the beginning, I told myself: ''Don't look right or left. You
Unfortunately, you could not continue
have your principles and try to go on your own'.
like this.
You have to look at all the other operators because they could influence you
negatively by their irrationality."
enced banker, what path would you advise the
authorities to take?
R.T.: I would like to cite the example of the Czech
Republic which, after the collapse of the Communist
system, privatized the entire banking sector. They
made a huge effort to improve the governance of the
National Bank and today all the banks in this country
are healthy, in line with international regulations and
performing very well. It means that the model exists.
It is my strong opinion that Moldova could have
an excellent banking sector without having a stateowned bank. The state has demonstrated several
times that it is not able to manage correctly a bank
or other companies. It is not its core business. It has
so many other things to do in different sectors of the
economy that having an additional burden in the person of a bank is useless.
I think that BEM has cost enough the state budget
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Б&Ф // июль-август 2015 г.
Ridha Tekaia
- the billion which disappeared will have to be paid by
all the country's taxpayers one day. In addition, the
11 banks remaining after the possible closure of the
three problematic ones, in my opinion, is more than
enough for such a small country like Moldova. I have
already stated that Moldova is a country for seven
banks and if other banks continue to do what they
are doing, then, probably, we will reach this number
within two to three years.
Profit: What could the impact of the possible
liquidation or nationalization of BEM be?
R.T.: The liquidation of BEM will have only positive aspects, especially given its complicated ownership
structure. If we do not liquidate this bank, then one
day, when it will be recovered and healthy again thanks
to the state contribution, the initial shareholder may appear and ask for compensations. Therefore, it is bet-
Profit: Some analysts say that all the latest
developments in the banking sector point to the
need to increase the guaranteed deposits fund
which is now quite small, only 6,000 lei? Would
such a step be appropriate?
R.T.: Why is it small? Your guarantees are with
whom you are contracting. When you give your
clothes for cleaning, do you ask for guarantees that
the small shop cleaning your clothes will return you
your trousers if it is burned or destroyed? When you
put your car in the service, are you asking for a guarantee that the garage will still be alive in one week
when you go back?
What is important is the reputation of the garage or the cleaning. So just take your responsibility
and look where you put your money in. Raising the
sum of guaranteed deposits to, let's say, 100,000 lei is
an illusion that nothing wrong will happen. You set
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a threshold anyway. I repeat it again: it is important
with whom you are working.
Profit: But why is then the guaranteed sum of
deposits so high in Europe?
R.T.: Because there you have real regulations. If
you increase the amount, you think that you are protecting the consumer, but in reality the consumer who
knows that he will be secured up to 100,000 lei will
not look at how transparent and trustful a bank is,
but will put 99,999 lei in it, knowing that his deposit
is secured.
By not looking at the quality of the bank and its
shareholders, the consumer will provoke a deviation
of the behaviour of the banks. They will start receiving funding without making any effort to work correctly and they will do even worse than they do today.
This system works only if you are sure that the
banks have real governance and that they behave correctly. I will never support such an idea in today's context where everyone could do whatever he wants in
his corner without telling who his shareholder is.
I will give you an example. The Capital Adequacy
Ratio - the ratio of a bank's capital to its risk - is now
16%. But for several years, some banks whose adequacy ratio was 12, 14 or 15% have been allowed to
use a pure artificial methodology to recalculate it in
order to be at 16.5 or 17%. Unfortunately, I do not
have with me the majority to oppose such things.
So, how to protect the consumer? In my opinion,
the most important is to make him free to choose
his bank. I do not understand why the employer, be
it state or private, should decide for his employees
where to put their salaries. Just imagine that tomorrow the employer tells his employees to visit this or
that doctor, to put their kids in this or that school or
to go shopping in this or that supermarket.
Instead of touching the threshold of 6,000 lei of
guaranteed deposits, employees should be allowed to
decide themselves in which bank to receive their salaries. It is not the accountant, who perhaps obtained
a special rate on his mortgage, who should decide
where to put the salary of his employees. The most
interesting is that the regulation says that it is open,
except for pensioners but, in reality, nobody has been
able to use it.
РУССКИЙ
ter to cut these risks and liquidate the bank because it
would be much more complicated to restore the entire
ownership story. A liquidated bank does not have the
same value as a bank which was almost liquidated, but
then reinforced thanks to state's contribution.
My strong opinion is that the more you are waiting, the less you will find. Day after day the weight of
this bank is retracting; it lost almost all its big clients
and deposits.
Referring to the nationalization plans announced
by the leaders of the two ruling parties, I am not sure
either about the legal base of such a decision or about
who would gain the case if it reaches an international
court. But if the bank is nationalized then what you
will find will be a shell company with only trouble and
no assets. This bank will be absolutely empty if you
wait for several more months. So maybe it is better to
stop the haemorrhage now, and later, if necessary, to
open another state-owned bank.
What I know is that today we are facing totally
irrational and unfair competition and treatment. The
state budget is putting back money into these banks,
two of which are private and one was private for
about a year (between September 2013 and November 2014 the state stake in BEM was 33.3%, down
from the initial 56% - Profit), to support them, to
continue to pay pensioners and reimburse deposits.
The state is putting money in private banks, which
means nothing but distortion of competition. I am
sure that if something like this had happened to an
international private bank, the state would have never
put a penny in it.
Profit: What about the technical side of the
issue? Isn't it a too big problem for an accountant
to have the accounts of 25, 100 or 1,000 employees
opened in several different banks?
R.T.: This was a problem 10 years ago when the
Б&Ф // июль-август 2015 г.
65
IT of the banks was obsolete. But it
is no longer a problem today when all
banks and accountants have electronic
and automatic systems. If an employee
wants to go to a certain bank, the accountant includes the data in the computer and that is it. Every day the banks
make millions of transactions between
themselves and everything works fine.
Profit: How does the system
work in other countries?
R.T.: There the employer is like an
ambassador. He receives four or five offers from banks, selects the best three
and publishes them in places where all
the employees could read them. When
a new employee arrives, he is asked to
choose the bank he would like to have
his salary account in.
MOBIASBANCA IN
FIGURES:
6.5bn lei
assets, June 2015
1.1bn lei
capital, June 2015
2.5bn lei
deposits by individuals,
June 2015
3.3bn lei
credit portfolio,
of tender and put zero everywhere. My
colleague said that we would lose money. But I told him not to worry because
we would not win anyway. One day,
when we received the invitation to participate in a tender that, like many others, opened in the evening and closed
at 10 in the morning, we just put the
name of the company in our offer and
sent it at 9.37 a.m. We waited. No answer. A couple of weeks later, I had the
opportunity to meet whom it may concern and asked him about the tender.
He said: "Sorry, but you lost, another
bank got it". I said: "Ok, I see. But tell
me at least one reason why we did not
win because I put zero everywhere,
which means that my offer was by far
the best." My interlocutor looked very
embarrassed because the envelope has
never been opened…
We see that the Government has not
learned the lesson from the previous
law directing all state institutions and
state servants to BEM. Today, the same
story is repeated by clear instructions to
orient all state related structures to two
exclusive banks. Same symptom - same
sickness! What if these two banks will
produce soon the same effects as BEM
had? Who will pay for it?
Profit: Have you raised this issue
June 2015
with the responsible structures?
R.T.: I did several times. I talked
45.8
to the finance and the economics minliquidity, II principle
isters, to the head of the Agency for
the Protection of Competition and
June 2015
other officials but none of them looked
shocked that the consumer does not
129 lei
have the right to decide about his bank
account. I would really encourage each
profit, June 2015
consumer who one day will lose one
penny from the three banks with probProfit: Why don't you call a news
3bn lei
lems or from any other banks to sue the
conference and speak about all this?
employer who decided about his bank
R.T.: I raised the issue during a
liquid assets,
account rather than the bank. I insist on
conference organized by the Foreign
June 2015
this because the bias behind this is corInvestors Association. I mentioned that
ruption.
the state was not fair when in 2013 it
I will give you an example.
voted a law to orient all state employees
When a state employer is opening a tender at 5
to BEM. I considered it a real infringement of fair
p.m. and closing it at 10 a.m. the next day, don't tell
competition. Nobody reacted. Today this law is still
me that this is normal?
in force although no minister respects it anymore. At
Recently, I made a test and asked one of my colthe same time, the tenders are organized by state inleagues to prepare a universal answer for any kind
stitutions in such a way that most of them are won
by two banks.
Today you have a big flow of mi"Foreign investors who are already here are Moldova's
gration from BEM to other banks
best ambassadors. Yet, given today's developments I canand I consider that the Competition
Council should be looking into this
not encourage anyone to come to Moldova."
Ridha Tekaia process. As far as I know, the volume
of BEM's deposits dropped by sev66
Б&Ф // июль-август 2015 г.
Profit: So does it mean that unfair competition about which you told us several years ago is
still here?
R.T.: Yes, it is still here and even worse. Day after
day I see no improvement. As I always say, in corruption you have two sides: the corrupter and the corrupted. No one could act without the approval of the
second. The authorities need to change legal framework and the behaviour and let the consumer decide
about his own bank account as he decides about his
doctor, and shopping. This is what I am asking.
Profit: It is very sad to hear this, especially
because foreign officials and businessmen working in Moldova have always seemed to be much
more optimistic about the developments and the
implementation of reforms in Moldova than the
locals.
R.T.: There had been positive changes for several
years and I was very optimistic and looking at the light
at the end of the tunnel. Things started to worsen
during the past 1.5-2 years; therefore, I started ringing
the bell.
Profit: So this explains why no other major
Western investors have come to Moldova over the
past years.
R.T.: Before attracting foreign investors, whatever
their nationality is, you have first to satisfy the existing
ones. If the basic rules of fair competition, of no retroactivity in the law and of stability are not respected,
then no investors will come here.
Retroactivity in the law is the worst – it is the enemy of the business. The foreign investors who are
already here are Moldova's best ambassadors. Yet,
given today's developments, I cannot encourage anyone to come to Moldova.
I will give you one more example. Along with
several other banks, Mobiasbanca participates in the
implementation of IFAD (International Fund for Agriculture Development) programmes in Moldova. In
mid-June we received an amendment to our contract
forcing the bank to accept a condition under which
the Finance Ministry could at any time ask us to reimwww.profit.md
burse the total sum of funds received under the IFAD
programme.
IFAD funds are provided to banks under a certain advantageous rate and the banks provide these
funds to their clients also at an advantageous rate. If
I signed the amendment, it would have meant that I
accepted to lose money, because I could not ask my
client who got the funds for several years to pay me
in advance as the Finance Ministry is asking back
the funds. Something is wrong here. I accept to sign
such a clause in a future contract, but I could not
go back retroactively on something already signed.
I understand that the authorities are short of funds
and are looking for money everywhere, yet… The
day when there will be no more retroactivity, more
foreign investors will come to Moldova.
Profit: Mobiasbanca marks its 25th anniversary in 2015. During this period, the bank had
two important stages in its development: before
and after the arrival of Société Générale in 2007.
Where do you see Mobiasbanca in the next five
years or even the next quarter of a century?
R.T.: I hope, in fact, I am sure that Société Générale, which marked its 150th anniversary last year,
will stay in Moldova. Our attitude and principles will
remain the same. Being bigger or smaller depends
quite often on circumstance and environment. In
fact, the size of the bank is not the most important
thing. What is important is to continue following our
principles and values, respecting our clients and providing them with highly qualitative services.
Profit: What can you say about Mobiasbanca's successes compared with other subsidiaries
of Société Générale Has the bank managed to
move into Société Générale's top 20 subsidiaries
or not yet?
R.T.: Mobiasbanca will never be a big subsidiary in
terms of volume due to the limited Moldovan market.
But we have achieved very good results when it comes
to our ROE. At the same time, we understand very well
that the situation may change. For instance, because of
the crisis in Russia, our subsidiary there is underperforming. So Mobiasbanca today is above Société Générale's
subsidiary in Russia in term of ROE. I would like to
mention that the Group has started to really consider
Mobiasbanca as a serious subsidiary. We have a much
bigger number of cross border visits and exchanges.
Our team travels a lot, and I feel they return with motivation and ideas – this is the gasoline of the bank.■
Б&Ф // июль-август 2015 г.
РУССКИЙ
eral billion lei since the end of December 2014. As
much as 90% of deposits from BEM went to two
banks only. Mobiasbanca is a part of the remaining
10%. Yes, we have our portion of increase but it
is mainly coming from the private sector, the one
which trusts us and which is free to choose.
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