Bankers should be aware of the new world

Federico ghızzonıs ceo of Unicredit, one of the world's leading financial institutions... He is someone who knows Turkey very well. When Unicredit entered the Turkish market by taking a 50 percent stake in Yapı Kredi, he was the one responsible for its operations in Turkey. Ghizzoni served for five years in the management of Yapı Kredi in Turkey and played an influential role in the bank's performance. Last year, in a transfer which attracted a lot of attention, he was appointed CEO of the group. We met with Unicredit CEO Federico Ghizzoni during a brief visit he made to Turkey last month. Capital conducted a very enjoyable, exclusive interview. The answers he provided to our questions were as follows:

Capital: Is it possible to say that, in the current situation, the traces of the global crisis have completely gone?
-  The picture is still stable. Global political developments are putting pressure on the markets. But, from a macro economic perspective, we can talk about a recovery in the global economy. This recovery is more pronounced in developing countries such as Asia and South America. In Europe, countries such as Turkey are raising the overall performance. The situation is similar in America. The basic problems are in Western Europe. Germany is going well but the other countries have problems. The result is that we are going in the right direction. But there are still some uncertainties.

Capital:  What are the most important risks you see on the global markets this year and afterwards?
- There is still a lot of volatility. The picture in North Africa is putting pressure on the prices of goods. The most important risk is a rise in the price of oil. In Europe and one part of America, unemployment continues to be a risk. I don't want to be pessimistic. I think positively. I can say that the most difficult period of the crisis is in the past, but we must still watch the markets carefully.

Capital: Which of these risks do you think can have a direct impact on the Turkish market?
- Oil prices affect every country. In Turkey, I don't think that unemployment will be a very big problem when the economic growth rate is 4-5 percent. At this level, labour force participation will be lower. However, the situation is different in developed countries. It is difficult to deal with an unemployment rate of 10 percent in
countries where the annual growth rate is 1¬1.5 percent. In the Turkey, the growth trend will continue. This year it may be a little less than in 2010.~

Capital: People say that it is becoming more difficult to do banking and to make profits in Turkey. Would you agree?
-  There are pressures from both inside and outside the country. First of all, the market is volatile from every perspective. This doesn't make life easy. On the other hand, there is the impact of Basel 3. Basel 3 means that banks need more capital. Another important impact of Basel 3 is the limit it imposes on the issuing of bonds. It attempts to prevent too much liquidity. In the world as a whole, there is a pressure as a result of the negative impact of the crisis on the reputation of the banking sector. Yes, it is more difficult to do banking. Banks have to restructure themselves for the new era. We need to learn how to work with lower costs. We have to develop business models accordingly. The increase in capital and limits on liquidity put pressure on the entire system. But we should not complain too much about this situation. We should be aware that the situation has changed. The new era may also bring some consolidation.

Capital: What differences will there be banking in the future?
-  It is not possible to abandon physical branches. In a country like Turkey, the number of branches will continue to rise because the penetration rate is low. But, over the next 10 years, the banking business model will undergo a radical change. Branches won't be completely abandoned but the internet will play a very important role in the future of banking.

Capital: Some restrictions have recently been introduced on banks in Turkey. Will these have a negative impact on the future of the sector?
- I believe that mistakes are made whenever the government introduces this kind of restriction? I don't believe that you can set a limit on the market. Having relationships with banks means being sensitive. It is good that the rules apply to everybody but it is not right to say you will grow by this much or you won't grow by that much. This is not a productive approach. At the end of the day, banks are companies. You cannot set a limit on the growth potential, on the development of something.

Capital: Do you use the experience you gained here in your current job? Has it made a difference?
- My experience in Turkey was very important to me because I learned a lot. It was here that I learned the importance of being flexible in management and of retaining close ties with customers. It was here that I learned the importance of having a rapid, open organization. You should be big but quick. You should be able to delegate your responsibilities. I learned all of these things from my experience in developing markets.