Ms. Merita Gjyshinca Peja, Executive Director of Banka Ekonomike, has a vision aligned with Western principles, more so, an enthusiasm which perpetuates it. Why she’s doing this is straightforward enough, by parlaying her many years of experience with Raiffesen Group, an Austrian bank rooted in best practices; how she’ll guide this vision will be the exciting component as the next year unfolds. Speaking with the new Director, assuming her post in May of 2014, it was clear that this conversion was going in one direction, the banks employees and their personal and professional development. Generally, narrow conversions lack richness as they tend to prophesize more than educate. However, when people are placed first, when a company, a bank no less, uses the hour dictating the notion that by taking care of the people the people take care of the money and profits, you have struck a chord all too often overlooked, especially in emerging markets. Let’s take a glance at what this all means in the context of Kosovo’s banking system:
Ms. Peja, please provide an abstract of the Banks’s history here in Kosovo?
Founded by successful local shareholders rooted in international experience, Banka Ekonomike (BEK) was one of the first banks operating in Kosovo following the conflict. Gaining its license on May 28th2001 and performing successfully ever since, the bank offers a wide range of products and services in the retail and corporate segments and continues to diversify its offerings yearly. Today BEK has a network of 40 branches/sub-branches, serving over 124,000 individual and corporate customers entering Q3 of 2014 with €164 million in assets, €147 million in client deposits and an overall loan portfolio of €114.5 million.
Market Position and future growth plans?
Today we rank 5th in the market in regards to gross loans and 6th in terms of total assets and deposits. Pertaining to growth, we consider human capital as the bank’s main asset. As such, we envisage a strong future through targeted growth measured by augmenting the skillset and aptitude of our existing base of employees; a fantastic group of young men and women with a strong work morale.
To reach this objective we have a renewed focus on staff development through various training initiatives from online training to experience sharing as well as coaching programs. We want to ensure that our most valuable asset performs for our customers with the highest professional standards via a team based approach with ethical considerations at the core of it all. We believe that only through empowering our workforce to act properly with responsibility and integrity can we ensure that we meet customer demands, regulatory requirements and shareholder expectations. As such, this will act as the main assurance for the bank’s success!
Apart from human capital considerations our future objectives are to increase lending by 8-10% in the coming years. We aim to do this by diversifying our portfolio, consequently risk, by focusing on the small business segment, private individuals including mortgage providers, which we consider a segment with strong potential for growth. Furthermore, we will optimize our current branch and ATM network while increasing usage of digital banking and enhancing the quality of customer service.
Banka Ekonomike Executive Director: Ms. Merita Gjyshinca Peja
What are some of the positive experiences regarding the ease of starting and conducting business in Kosovo? Inversely, what are some of the challenges?
Kosovo has made significant improvements in the area of doing business in the last years although there is still room for improvement. The best indicator regarding developments in the area is the 2013 World Bank Doing Business Report where Kosovo climbed 38 spots from 2012. Interestingly, our new ranking places us ahead of several more mature Balkan nations; including, Croatia and Serbia, an EU member and an EU candidate, respectively. More specifically, Kosovo has shown remarkable improvement in ease of obtaining credit, ease of paying taxes and registering property; whereas, areas which require further improvement include enforcement of contracts by local courts and investor protection. Having said this, I am very optimistic that by working hard with a particular emphasis on establishing the rule-of-law, Kosovo will very soon become a hot spot for foreign investors.
What does the competitive landscape look like in the current market?
Given that the banking sector collapsed during the 90’s in former Yugoslavia leaving Kosovo to start from scratch by rebuilding its banking capacities in 2000, the sector is performing quite well. In fact, fourteen years later it is one of the best success stories in the country. Since then the banking sector has played a crucial role in the development and stability of the overall economy in Kosovo.
Today there are 9 licensed banks, with the key players being of foreign capital who possess a strong local presence in Kosovo. Although still limited to traditional commercial banking, the competition is pretty healthy and a lot of advancements have been made in improving the customer banking experience. At the beginning, learning from precedent Austrian and German experience, local banks gained an understanding of maintaining healthy balance sheets by prudent lending and keeping costs under control while always complying with regulatory requirements.
Later, the entry of Slovenian and Turkish banks with their innovative products and aggressive sales strategies have made the market even more dynamic and competitive. More competition is expected which is always welcomed as it will without a doubt drive us, and other banks, to become even more efficient, innovative and customer oriented.
If you could, deliver to our readers a personal insight on why Kosovo makes sense to invest in?
The country has the youngest population in Europe, with 70% under 35 years of age, which makes the country very attractive for foreign investment. What makes Kosovo so unique is the great potential, especially in its unused natural resources. Additionally, Kosovo is known for its flexible labor force and low personal income taxes. Moreover, starting an investment in Kosovo is simple and straight forward process. This is enabled by a simple and modern framework compatible with the EU which we have built during the last decade.
Additionally we have low tax regime and the official currency is Euro; thereby, eliminating Euro zone currency risk making Kosovo a desirable place to invest. In summary, it is obvious that we are a performance driven culture and Kosovo has a lot to offer!