Herbert R. Skok, Managing Director Volksbank talks to Marie Benoît about the rise of Volksbank since it opened its doors in Malta more then ten years ago.
To reach Mr Skok’s office in Dingli Street, Sliema once the home of Cecil Amato Gauci, is no easy task. This is a high security bank and it would be difficult to kidnap Mr Skok or any of his staff, let alone run off with the contents of a safe.
As he tells it, Herbert Skok first entered the banking trade in 1975 “after a stint in tourism and industry.” From that year until 1978 he worked as a trainee and independent trader in the foreign exchange dealings of American Express Banking Corporation in Vienna “with stays abroad in New York and London.”
From 1978 – 1980 Mr Skok was chief foreign exchange trader in the Soviet Donaubank AG which was at that time domiciled in Austria. Apart from personnel management in the field of money market and foreign exchange dealings his responsibilities also included the training of Soviet colleagues who were sent to Austria for this purpose. He comments on this period: “The work also meant longer stays abroad to train employees in Moscow, Bucharest and Sofia.”
His involvement with Österreichische Volksbanken AG, Vienna, goes back to 14 April 1980, first as a chief trader in the Euro money market field and since 1986 with the rank of authorized signatory and manager of the entire foreign exchange, Euro-money, valuta, precious metals and customer trade, responsible for a portion of circa 30 per cent of the balance to be managed. “I was also assigned the introduction and trading of derivative financial market instruments,” he recalls. Since 1988 Mr Skok has also been responsible for part of the capital market (foreign exchange portion), namely for the hedging of interest terms for the period of two to 15 years.
By 1994 he was awarded the title Departmental Director. What did this involve? “Apart from monitoring active trading my main job was the treasury strategy development for the foreign sector of the Volksbanken group. Here particular attention is given to the interest side of trading activities, but especially to the management of the liquidity flows. One must also keep an eye on the trading activities of the ‘core’ banks and look after institutional customers directly.”
In the summer of 1996 he was also given the entire management of “trading in securities” as well as responsibility for the treasury departments of the ÖVAG foreign branches in Prague, Brno, Bratislava, Ljubljana and Zagreb. He continues: “By July 1998 I was responsible for the global treasury of the entire ÖVAG group including all branch companies at home and abroad. Travel, especially as Treasury Sector Manager, was frequent: I spent a lot of time in Northern America, Asia and nearly all parts of Europe including the area of the former Soviet Union.”
Apart from his extensive knowledge and experience in different sections in the world of finance Mr Skok has many hours of lecturing under his belt for he was also a special trainer for the Österreichische Volksbanken Academy for the training of future business managers of the ‘core’ banks. “Of course I continue to speak as a guest lecturer at various finance symposia and congresses,” he adds.
After working on the Board of Management of Volksbank CZ a.s. Mr Skok accepted a posting in Malta as Managing Director of Volksbank Malta, on 1 June 2003.
Why a Volksbank in Malta I wanted to know? “We are a commercial Maltese bank with an Austrian background. In 1995 the bank, which is a fully owned subsidiary of Österreichische Volksbanken AG, was set up as an offshore bank and the conditions for doing international business were exceptional. However, the bank was not allowed to do any business with residents in Malta.”
Mainly focusing on financial partners like big commercial contracts on project financing from but not in Malta, Volksbank also did some security business.
At the end of 2002 the bank was granted a fully commercial licence. Says Mr Skok: “It was offered by the government and we took the chance to register. We thought Malta was definitely prepared for having more banks.”
He goes on to explain that the German community in Malta is quite large: “Apart from Germans it also includes Austrians and Swiss and altogether there are about 3,500 German speakers on the island.”
Volksbank is a member of the international association of people’s banks CIBP (Confederation Internationale des Banques Populaire) which includes more than 30,100 branch offices around the world. “Through this associaton we cooperate closely with the German Volksbanken, the Italian Banca Popolare, the French Banques Populaires and other partner banks.
“When we applied for an international licence we were expecting that Malta would belong to the EU. It was therefore a good time to go for a license and from there to go for the domestic business. Anyone who is acquainted with Volksbank knows that we are never first in a country and certainly never the most aggressive. We have the advantage of being small. We are therefore able to take care of our clients. We do not compete with giants such as HSBC and BOV. Our customers are mainly SME’s (Small Medium Sized Enterprises) and the German speaking community. There are many German investors and Maltese people looking for a good investment in Central and Eastern European countries and we have very good contacts to our sister banks in Hungary, Slovenia, Croatia, Bosnia-Herzegovina, Czech Republic, Slovakia and Rumania. This year we’ll also open a branch in Bulgaria. This gives a lot of advantage to Maltese clients with business connections to these countries: For example we guarantee that money will reach our sister banks within 24 hours.”
What are the Maltese doing in countries like Bulgaria?
“They are investing in real estate, and setting up factories and shops in places like Slovakia, Romania and Bulgaria, which they see as a good alternative to investing in Malta. We expect that soon they will go further East: to Ukraine and Russia for example. Remember that is takes some three hours to get from Malta to Gozo but it only takes twice the time to go from Malta to Russia.” He obviously believes in the idea of playing away from home and is categorical: “ We find that the Maltese are now more prepared to look across borders.”
Yes, but what about risk? “As long as the banking system and banking are developed there is hardly any risk.” What about the North African countries like Libya? “I do not believe that these countries are as yet at the same stage as the Eastern European countries when it comes to banking. The Eastern European countries are now part of the EU and this means that they fall under the control of the European Central Bank, so there is very limited risk when it comes to banking.”
Mr Skok explains that many international companies are now settling in Malta and making it their base. “Look around and then go to North Africa. Malta is still the hub and always will be.”
What exactly is the goal of Volksbank? “We want to be accepted as a fully Maltese commercial bank with an Austrian background. We are prepared to invest further in Malta. We want to step in the niche of the market where other banks do not go. If you want to invest in Africa you cannot bypass Malta. What is important is the personnel and the fast and efficient service we provide. We also have a subsidiary in Jersey. The Volksbank Malta group is close to one billion Euros strong. Local business is growing very fast. Local banks are familiar with our name as we have strong business connections here in Malta to organizations such as the MIA and the tourist industry. Indeed, some very well known hotels too, are our clients.”
Do they mean to expand? “Yes, but our intention is not to open more branches but to widen our client base and local business. Again, it can be said that our strength is personal attention and fast service; we provide our clients with the full range of banking products. We offer current accounts in all major currencies, and we will start a new service as from next week: the exchange of Euro coins, which is presently not offered by any other financial institution: clients will be able to deposit Euro coins in their accounts instead of leaving them rattling in their drawers when they return from abroad, and even to change them into Maltese Liri if they so want. Also, before travelling abroad, our customers will be able to take with them Euro coins. They will need a one Euro coin for a trolley as soon as they arrive at the airport, and now they will have it at hand. It is also a way of getting people to get used to the Euro before Malta joins in 2007. This is just a small additional service which we think clients will find useful.”
Had he found it easy or difficult to work with the Maltese? Mr Skok comments thus: “You are international minded and with your various organizations such as MFSA, the Central Bank and others, ready to run an efficient financial system like other countries in Europe.” He adds that the standard of education is very good. “Employees are polite and helpful as well as willing. We do not have any problems with them. As soon as key people are recruited they are sent to Austria for training. They accept to go immediately. The social connection between Maltese and Austrians is very good. We are similar in many ways. I have also observed that the Maltese are not as strict as the British or the Germans for that matter.”
The trajectory of the bank looks promising and opportunities beckon now more than ever.