From Treasury to Global Markets: a new name for a new era
OTP Bank Treasury recently announced that it would restructure its business and change its name, continuing its international money and capital market operations as OTP Global Markets. GlobalCapital talked to managing director Attila Bánfi about the opportunities and challenges that the banking group’s international presence brings.
A bank’s treasury business is one of its most important activities, carrying out financial operations both for the bank’s other business areas as well as directly for customers. What was behind the name change?
In recent years, the Budapest-based OTP Group has become one of the principal players in the CEE region with a presence in 12 countries. We now serve more than 19 million retail, corporate, and municipal customers and we are market leaders in several countries. During this time our treasury business also produced robust growth. Last year, capital market experts at our subsidiary banks served more than 19,000 corporate, retail, and institutional clients in the countries of Central and Eastern Europe. We changed our name to better express these developments in our external image.
Why did you choose the name Global Markets?
The name is a good reflection of the fact that we offer our clients a broad spectrum of international and group-level money and capital market services. The name change expresses two things for us: firstly, it shows where we started from and where we have got to so far; and secondly, it expresses our vision of strengthening our regional market position in the field of investment services.
How does that ambition fit into OTP Group’s regional and domestic strategy?
The growth of our business line has followed that of the entire OTP Group and we would like both our domestic and regional customers to feel the advantages through a unified service model. Our goal is to integrate capital market services so that products are accessible from anywhere and so we can offer a full range of services in every customer segment regardless of location. Naturally, it is also important that we always remain fully cognisant of local conditions and regulations in each country.
How will these changes affect the customer experience?
Firstly, in direct relation to the name change our customers will mostly be aware of the new logo, the redesigned website, and our new name on client confirmations.
At the same time, recent developments in capital markets are reflected in our services in a number of ways. For example, last year we played a significant role in our own €500m bond issue that we targeted at international investors. This year we are taking part in three international bond procedures and we are waiting for replies on another three bids. Besides that, by the middle of May we completed eight transactions as part of Hungary’s Growth Bond programme and in general we are the leading player in the Hungarian corporate bond market.
What are your plans for the future?
In the future we will put greater emphasis on Group-level solutions as well as research and investment advisory activities. For institutional clients we will be providing Group-level access to international bond and stock markets.
We will continue steadily building out capabilities in accordance with customer needs, expanding our range of services, and searching for opportunities in new areas. For example, the Covid-19 pandemic did a good job of demonstrating the huge need for automation as well as the need for our services to be available on multiple platforms. Telephone customer service has been our most active channel; we would now like to expand that to other channels.
How will customers profit from the business line’s international profile?
Our regional presence has given us significant knowhow and experience in specific countries, markets, and products, allowing us to pass on specialised market knowledge typical for a given country. This is a big advantage for our corporate clients who are present in multiple countries because it makes their exchange rate and interest rate risk management as well as their investment strategies much more efficient. Beside this, our regional expansion guarantees them unified service standards. It is also important to emphasise that this is not only about capital markets but also about the banking group as a whole offering corporate customers products and services in one package. We are looking at a complex package in which Global Markets is just one element of many.
Will the Covid-19 pandemic change the original growth targets or development plans?
OTP Group’s outstanding results, stable capital position, organisational robustness, and constant innovation will help us through this period successfully. Reviewing current market conditions and drawing on experiences from the integration will allow us to review and refine our processes, which could mean we will be even more efficient when we embark on the period after the crisis.