"Responsibility and trust are not optional but are the very essence of the bank which, in our business model, places the person and the relationship with the customer at the centre: without trust and without responsibility, the bank does not exist". Stefano Barrese speaks clearly, 47 years old, from Rome, with a degree in Economics and since last year head of the Banca dei Territori Division of the Intesa Sanpaolo group, who is part of the new generation of managers promoted by CEO Carlo Messina to the top floors of the bank. Barrese knows very well that the cases of mismanagement, which have followed one another over the years, have reduced citizens' trust in the banking system to a minimum and knows that the only way to recover ground is to promote a cultural revolution at the counter which seek first of all to satisfy the customer but also to enhance those who work in the bank and to gratify the shareholders. This is what he is doing at the helm of the Banca dei Territori which, with 3.300 branches and 11 million customers, contributes to 49% of the revenues of the entire Intesa Sanpaolo group and is an extraordinary observatory of the country's real economy. In this interview with FIRSTonline, Barrese explains the philosophy and strategy of Banca dei Territori and the results he is achieving.
Barrese, with over 11 million customers including households and companies, the Banca dei Territori of the Intesa Sanpaolo group is the main bank in the country and therefore has the pulse of the economy in real time: from its observatory what is the state of health of Italy that can be glimpsed in the first part of the year?
“Encouraging signs are arriving, both from the quality and volumes of credit and from the macroeconomic scenario, a situation also confirmed by Istat with more significant growth than expected in the first quarter of the year. Our problem loans are reduced both in terms of stock and new NPLs and this is a first positive sign. Then the growth of the loans that we disburse to both households and businesses continues but, if credit to individuals had been recovering for some time, the main novelty of the first part of the year concerns the strong growth in disbursements to small and medium-sized enterprises linked to investments medium-long term and to the technological innovation of Industry 4.0. Basically, in the first few months of 2017, seen from the observatory of the Banca dei Territori of the Intesa Sanpaolo group, Italy confirmed itself as a growth channel with signs of recovery in exports and, internally, in investments as well as consume. Unfortunately there are some clouds that cool down expectations in improvement”.
What?
"Firstly, the boulder of bureaucracy which is difficult to reform and which slows down the modernization of the country, often hindering the decisions of businesses, individuals and families and, secondly, the political uncertainty which never helps either the economy nor the financial markets”.
Faced with the general problems, the bank can do little, but it can do a lot to recover the confidence that Italy badly needs. Let's try to get Banca dei Territori's numbers for the first few months of the year to speak in more detail: how exactly are loans, mortgages, funding, deposits, savings and non-performing loans going? Can we talk about a change of pace compared to 2016?
“Collections are also strongly positively influenced by the success of individual savings plans, loans rise by double digits and the flows of problem loans drop dramatically. The data for the first four months of the Banca dei Territori are as follows: 6 billion euro of new medium/long-term credit disbursements to households and 5,7 billion euro of new loans to small and medium-sized enterprises (an overall growth of 13%)”.
These are important numbers that reflect a general improvement in the economy and the leadership role of Banca dei Territori, but where do you create value and where do you make the greatest profits?
“In times of low or even negative interest rates for banks it is not easy to generate profits, but we are succeeding again this year by increasing the revenues deriving from interest margins, but above all from additional services and commissions. Even in difficult times, our bank has never denied credit to those who deserve it, even if this does not mean that we can say yes to everyone and yet, a determining element for the profitability of our Group and of Banca dei Territori is the leadership we have in the management of Italian savings, which has an anti-cyclical function and which we optimize thanks to the perfect integration between the financial product factories headed by our asset management company Eurizon Capital and our life company Intesa Sanpaolo Vita and the distribution that takes place through the network network of branches and branches of the Banca dei Territori".
Does the PIR boom represent a new way of saving for Italians? How much will it affect Intesa Sanpaolo's performance this year?
“The debut of the Individual Savings Plans is certainly the novelty of the year, thanks to the new provisions of the latest Stability Law approved by the Government and Parliament, and the fact that Intesa Sanpaolo was among the first banking groups to believe in these new financial instruments with the launch of three dedicated funds is rewarding us. In less than four months we have collected 800 million and we see the goal of one billion euros in funding, only on PIRs. Italians' way of saving was already changing and had been moving for some time from a medium to long-term perspective, but Intesa Sanpaolo supported it by offering security and serenity in financial investments and adequate returns at sustainable costs. And in fact savers invest in trust in the bank even before in the individual products”.
The growth in asset management signals the transformation of a banking group like Intesa Sanpaolo which is repositioning itself and which is adding a greater push towards wealth management to the traditional banking business: what effect does all of this have and how does the job of Banca dei Territori change ?
“Our competitive advantage is that we have been ahead of the game, changing the Banca dei Territori model in 2015 and focusing it on customers, and that we are part of a strongly cohesive group in which all the segments are integrated with each other and all row from same part. The common goal is to make Intesa Sanpaolo grow to the full satisfaction of all stakeholders and with significant dividends for shareholders. Wealth management is nothing else to us, but an integral part of our business. Some investments made with timing, both in the constant requalification of personnel and in technological innovation in the direction of multi-channel, today allow Banca dei Territori to respond effectively to the request for services in all business segments: retail, personal (for the management of assets over 100 thousand euros and up to 1 million) and businesses. This careful strategy means that our cost/income ratio is below 49% and represents an efficiency index that is absolutely among the top two in Europe”.
The Financial Times wrote in recent days that Intesa Sanpaolo's new industrial plan will be very aggressive and will reduce the plethoric branch network by cutting at least a thousand branches from 2018 onwards: what's true?
“Our managing director, Carlo Messina, has already answered clearly. In Intesa Sanpaolo there is no redundancy emergency and not even Banca dei Territori, which has 45 employees, is planning staff cuts. Our way of banking is based on the centrality of the person, which concerns both employees – who are the assets and engine of the bank – and customers, for whom we have coined an expression to describe our philosophy: "If dreams you can make it and we help you make it come true”.”
But concretely how many counters and branches will you close?
“The new industrial plan will express the numbers, but since the merger that gave birth to our bank we have already significantly reduced the branches: they were 6.500 and now they are 3.300, with a reduction of half while the average reduction of the Italian banking system is 10 %. It is not excluded that there will be other forms of rationalization of the network in the future according to technological evolution and consumer behaviour, but they must derive from the strategy which always places the person at the center of the bank. We are accelerating digitalisation, but the branch is and will remain the heart of the bank. So much so that we have also transformed the bank's call center into an (online) branch and we have also invested in changing the layout of the most important branches”.
However, technologies are changing the way we bank and serve customers: for Intesa Sanpaolo is the multi-channel bank still a mirage or an increasingly widespread reality?
“For us, multichannel has been a reality, which customers can experience first-hand, since 2014. Our multichannel bank, which already has 5,5 million customers, was born from the integration of five segments, which are the physical branch, mobile banking, Internet banking, ATM and call center turned online branch. But the turning point was the growing integration between work and the bank also thanks to smart working which corresponds to the needs of staff and customers. Change is the compass of a modern bank, but I believe that in Intesa Sanpaolo we can legitimately say that the future is already today or that we at least try to anticipate it".
However, there are those who say that robots will also replace banks and that loans and deposits will soon be managed by the algorithms that guide the robots: is this a quantum leap or a nightmare? Don't you run the risk of losing the professionalism of the bankers and making the customer's relationship with the bank impersonal?
"The robot is also useful in the bank and should not be demonized, but must be placed at the service of management and those who direct it, bearing in mind that the person is and remains at the center of the bank, on whom all our bank model and our approach to the customer”.
In his latest book "In search of the lost bank" an economist of the caliber of Marco Onado writes that today citizens no longer know if, after the cases of betrayed savings, they can still trust the banks or agree with the Economist who has arrived at coin the term banksters: don't you think that, after the cases of maladministration that have also occurred in Italy, for all banks and therefore also for Banca dei Territori, the recovery of trust remains the priority of priorities?
“Personally I don't agree with generalizations. It is clear that cases of mismanagement must be prosecuted, but it is not possible to lump everything together, because responsibility and trust are not optional but are the very essence of the bank. Without trust and without responsibility, the bank does not exist. And in Banca dei Territori and in the Intesa Sanpaolo group, social responsibility in compliance with the laws of the market is an integral part of the business model, which leads us every day to pay the utmost attention not only to the economic but also to the social aspects of our business . I understand that it takes time to perceive it, but the crises of the last decade have started a cultural revolution within the bank, which pushes those who work there with passion to do, in compliance with the rules, everything that can be done to satisfy customers, without forgetting the workers and partners”.
