The Bulbank Experience_MBA internship

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The internship in Unicredit Bulbank Sofia is briefly described in this presentation

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The Bulbank Experience_MBA internship

  1. 1. The Bulbank experience<br />- Executive summary - <br />Oana Gaidargi<br />Unicredit MBA in Retail Banking and <br />Financial Industry<br />2008/2009<br />УниКредит Булбанк<br />
  2. 2. Best Box Office hits (AGENDA)<br />Meet the parents ( a.k.a.presentation of the bank and project)<br />Matrix (r)Evolutions (a.k.a. how the project evolved)<br />Who’ s afraid of Virginia Wolf? (a.k.a. achieved and missed goals & expectations)<br />Il buono, ilbrutto, ilcattivo(a.k.a. positive and negative elements of the experience)<br />
  3. 3. 1. Meet the parents. Trailer<br />The movie starts with an imposing building in the center of Sofia, just as a background of a modern depiction of Saint Sofia (statue). This seems promising!<br />The first character introduced by the film is the Head of Affluent & Business Clients who takes in right away the intern, making the presentations with the whole Retail division and explains clearly the bank’s position in the system, the business model and the ongoing projects.<br /><ul><li>3 banks are sharing the main pieces of the SME Bulgarian pie
  4. 4. UCB SME portfolio = aprox 90 ths customers
  5. 5. Sales force and network:</li></ul> - 8 regions lead by Regional Directors<br /> - 286 Relationship Managers with assigned portfolio of SME and affluent – the managers of the business- (focused on portfolio farming)<br /> - 30 hunters (focused only on acquisition)<br /> - aprox 200 branches with SME RMs (16 Business Centers specialized in SME/Mass market/Private)<br /><ul><li> medium ticket/loan = 150 ths BGN
  6. 6. balanced credit portfolio: 50% investment loans; 50% working capital and other current account facilities;
  7. 7. loan currency: 80% BGN; 20% EURO</li></li></ul><li>1. Meet the parents. Sequal<br />The action unfolds in a few days of intense study of the bank’s Credit Policy, Internal Lending Rules, SME products, specific projects. Also meetings with relevant department managers occur, when the intern can see the big picture of the SME world in Bulbank.<br />
  8. 8. 2. Matrix (r)Evolutions. Movie premiere<br />The timeline of the campaign tallies <br />with the evolution in time of my implication in the project<br />The main project I have been responsible for was the SME loan restructuring program, as a proactive answer to the current crisis situation.<br />The proposed stabilization measures are part of a “Crash Program” to improve SME loans provisioning and are in line with the current product parameters, implying only slight modification of the terms for repayment. <br />The campaign’s starting point can be summarized in numbers:<br /><ul><li>aproxxxx loans to tackle, accounting for about xxx million EURO provisions</li></ul>The customers targeted by the campaign have the following characteristics:<br /><ul><li> installment repayment overdue days > 15;
  9. 9. default customers who present a slight chance of settling the issue before going for legal procedures;
  10. 10. endangered customers (industries mostly affected by the crisis – construction, transportation, tourism etc. and turnover reduction )</li></ul>Aug<br />Jul<br />Sep<br />13.<br />20.<br />27.<br />03.<br />10.<br />24.<br />17.<br />31.<br />07.<br />06.<br />Weekly follow-up and analysis of results<br />Campaign expected completion: mid Sept<br />Pilot test launch:<br />July 20th<br />
  11. 11. 2. Matrix (r)Evolutions. Behind the scenes (1/2)<br />Description<br /><ul><li>Main use of pre-approved (at branch level) options generated by a tool (“RM tool”) that will provide renegotiation solutions respecting limitations defined by HQ (all NPV neutral)
  12. 12. For pre-approved options: overdue amount (penalties included) fully capitalized, and 200 BGN of restructuring fee paid when signing the new contract
  13. 13. Use of non pre-approved options (tailor made) that will be proposed by branches and approved by task force2for “special cases” only:
  14. 14. Pre-approved structure of transaction not suitable to customer’s needs
  15. 15. Customer exposure3greater than BGN 150K
  16. 16. Customer & related parties exposure in other banks is more than 30% of total bank exposure
  17. 17. For NPL customers, possibility of proposing settlement with discount
  18. 18. Official documentation always asked to customer to initiate renegotiation</li></ul>Restructuring measures<br /><ul><li>Measures proposed to the customers in the following sequence:
  19. 19. Collection
  20. 20. For installment loans: pre-approved options (whenever applying):
  21. 21. First option: grace period on principle for a period up to 12 months
  22. 22. Second option: grace period on principle for a period up to 12 months + prolongation of tenure for a period up to 24 months
  23. 23. For revolving loans: pre-approved options (whenever applying):
  24. 24. Repayment of unsecured portion of loan according to an installment-like repayment plan over 24 months max
  25. 25. Repayment of whole outstanding according to an installment-like repayment plan over 24 months max
  26. 26. Tailored made options</li></ul>1 Selection based on 3 main criteria: at least one credit card overdue by more than 15 days; account net turnover &lt; ~Eur 10K over the last three months; sector “at risk”<br />2 Fast lane path to allow task force analyze and approve all kind of proposals<br />3 Calculated as Group exposure: customer + owner + related parties<br />
  27. 27. 2. Matrix (r)Evolutions. Behind the scenes (2/2)<br />Description<br /><ul><li>Use dedicated people at HQ level (both business and risk resources) in order to: support branches and call centre; define the default solution for each customer; handling of “ad hoc” cases; monitoring and feedback to management on status
  28. 28. Use regional dedicated people (business resources) in order to support “closely” the branches in their re-negotiation activities; support in managing information flow
  29. 29. Use branches approach in interacting with customers, proposing the re-negotiation options whenever possible (e.g. renegotiation not already initiated by NPL)</li></ul>Staff involved<br />A glance at the Restructuring tool<br /><ul><li> excel instrument to facilitate renegotiation process for the RM;
  30. 30. depending on the chosen restructuring measure, it automatically calculates the new maturity of the loan, the repayment scheme, the new loan installment;
  31. 31. based on the results the RM can choose the most appropriate measure for the customer’s financial situation.</li></li></ul><li>2. Matrix (r)Evolutions. Director’s cut (1/2)<br />
  32. 32. 2. Matrix (r)Evolutions.Director’s cut (2/2).<br />An example of the campaign’s progress analysis<br />Contract signed<br />% accepting customers<br />Renegotiation results <br />% of successfully contacted clients<br />Delinquent customers<br />(between 15 and 60 days overdue)<br />(# of loans)<br />-13%<br />-3%<br />69 %<br />134<br />130<br />Actually processed<br />Potentially processed<br />Success- fully contacted<br />Accepted option for revolving loans <br />% of accepting clients<br />Accepted option for instalment loans <br />% of accepting clients<br />Renegotiation results in terms of <br />volumes and number of customers <br />A – Grace period<br />Tailor made<br />Secured + unsecured<br />Tailor made<br />B – Grace period + prolongation<br />9<br />
  33. 33. 3. Who’ s afraid of Virginia Wolf? Synopsis <br />INTRODUCTION<br />When I was assigned to do the internship in Sofia, I was very skeptical about:<br /> - the novelty and added value of the experience;<br /> - integration in the team;<br /> - living in Bulgaria and the possibility of having my car stolen!<br />CONTENT<br />… but I am an adaptable person, so my preconceived ideas were offset by:<br /> - the high level of knowledge and professionalism of the Retail team in UCB;<br /> - the warmth, openness and willingness to share of the people I met there;<br /> - high quality of service everywhere I went, beauty of Sofia and safety of my neighborhood!<br />THE HAPPY END<br />Semi - missed goals:<br /> - Involvement in totally different projects than my previous professional life (e.g. CRM creation and implementation);<br /> - I did not have the chance to put in practice concepts learned in the MBA (e.g. Next product to buy model). BUT the general knowledge acquired during the program was ESSENTIAL!<br />Achieved goals:<br /><ul><li> Learn about an effective SME business model:
  34. 34. gain the example of best practices
  35. 35. observe the improvement points for further experience
  36. 36. Apply my previous experience on a new SME model, observe the similarities between both and paint the picture of the almost perfect SME service model which is yet to be fine-tuned, probably during future work experiences </li></li></ul><li>3. Il buono, ilbrutto, ilcattivo. Main characters<br />Il buono:<br />The good guy of this successful movie is called The Bulbank experience. He is a complex personage embedding both personal and professional pluses. <br />Personal<br /><ul><li> I received THE marriage proposal in the Bulbank Sveta Nedelya branch!
  37. 37. Made friends for life in Sofia!
  38. 38. I totally changed my ideas about Bulgaria, I actually considered moving there!</li></ul>Professional<br /><ul><li> The whole MBA program and internship period represent the milestone of my professional maturity;
  39. 39. Observing closely the strategic thinking and communication style of McKinsey consultants;
  40. 40. Being personally responsible and empowered to follow-up the loan restructuring campaign, analyze the weekly progress and interpretation of the results.</li></ul>Il brutto & il cattivo:<br />These two guys play an important role in the film too, but their performance is not as essential for the overall success! They can be described in few words:<br />Unicredit’s (Italy) silence regarding the job opportunities and future plans about the MBA graduates!<br />
  41. 41. THIS IS THE BEST<br />EXPERIENCE<br />EVER!!!<br />УниКредит Булбанк<br />

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