Банкеръ Weekly



Plamen Ilchev, Managing Director of Citibank Sofia branch to the BANKER weekly

Mr. Ilchev, Citibank's Sofia branch began operations a year ago, immediately after the credit institution extended a USD77MN loan to the Bulgarian State, intended for the Kozlodoui Nuclear Power Plant. Was that the reason why the top US bank stepped on the Bulgarian market?
- No, the two things just coincided. Citibank has been in this country since 1998 when we opened a representative office in Sofia. Throughout 1999 we were investigating and analyzing the opportunities which Bulgaria could offer to a top financial institution such as ours. The decision for opening a branch in the capital city was made in February 2000 and within the following five months we succeeded to find an appropriate building, establish a relevant infrastructure, and recruit a team. On July 7 Citibank's Sofia branch was officially inaugurated. Preparations for this event coincided with the signing of the credit aggreement for the loan to the N-plant of Kozlodoui.

Why didn't Citibank set up a structure in our country earlier, say in the beginning of the transition period?
- Until the beginning of 1997 Bulgaria had not shown that its economic development was oriented to the right direction. Within the last four years, however, relevant conditions were created to allow a bank such as ours develop a successful business on the Bulgarian financial market. Thirty two of our 34 employees here are Bulgarians. They are experts who are well-acquainted with the local market and with the specific characteristics of Bulgarian companies. This helps us to successfully negotiate with our clients.

Why did you focus on servicing corporative clients only?
- Truly, our attention is directed to large local and foreign companies and we announced that even a year ago. These are the top 100 companies in terms of volume of sales operating in Bulgaria. We believe these are the clients to which we could offer full value services of a global financial institution such as Citibank, with its 3,500 branches in 104 countries. The solutions we propose to our clients are based on the latest achievements in the field of information technologies and e-banking.
When we assess a company that wants to become our client we really give weight to the volume of its sales.

Other equally important factors are: the corporative management, the owners of its equity capital, the comapny's financial status, its market strategy and its presence on the market. There are big enterprises which do not satisfy our other requirements and, therefore, we do not work with them. At the same time, we have clients that do not entirely conform to the requirements for large companies, but they have provoked our interest bacause they have good prospects for business and are in a fair financial state.
Our policy has proven its efficiency over the one-year operation of Citibank's Sofia branch. In end-June our assets totalled some BGL200MN, 60% of which (about BGL120MN) were credits to enterprises. For comparison, in the banking sector as a whole loans represent 30% of the balance figure. When you compare the ratio you can assess yourself the achievement of Citibank's Sofia branch for the 12 months of its operation on the Bulgarian financial market.

Many Bulgarian bankers complain that the possibily for crediting is restricted by rigid requirements to the amount of the pledge they should get in order to extend loans. Do you think their rebukes are well-grounded?
- There are some legal stipulations in Bulgarian laws that are probably outdated, but I believe they will be revoked in the course of time. As far as Citibank's Sofia branch is concerned, the major security for us is the company's business plan and the way in which the enterprise that applies for a credit generates cash flows. These are the parameteres on which we focus our attention before we make decisions on releasing credits. And we haven't had a single case of overdue payment so far. Of course, we have sometimes required from borrowers to pledge commodities or tangible long-term assets, or we've demanded a promissory note as a security.

Which will be next year's priorities in the policy of Citibank's Sofia branch?
- Our policy will still focus on large companies. We have set as our task to widen the scope of our clients and of the services we offer them. We'll continue to develop e-banking, which is one of our strong points. More than 90% of the settlements with our clients are effected via e-payment. Currently, this is done over the telephone or using a modem. Towards the end of this year we'll introduce e-banking through INTERNET. In November Citibank will have a website in Bulgaria, offering information about our services and forex markets. The website will provide access to the website of Citicorp, to which Citibank belongs.

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