Steven van Groningen is one of the most admired executives in Romania, being at the same time regarded as one of the most active and dedicated voices in the local business environment and a promoter of transparent, ethical and sustainable business practices. In an interview with TheBizz Magazine, Steven van Groningen talks about the most important moments of his career as CEO of Raiffeisen Bank, which he has led for the past two decades, about the evolution of the local economy and the prospects of the banking system, and about personal plans for the future.

Looking back, what are the most important moments or decisions of your management term at Raiffeisen Bank?

From the beginning I want to say that, in 20 years, there have been many extremely good moments and decisions, but also some that did not prove in time to be inspired and good. It can’t be otherwise. No one can make only good decisions, isn’t it? For me, the takeover of Banca Agricola by the Raiffeisen group was a very interesting challenge, which I accepted. In 2000, Banca Agricola was a large loss-making bank, but with enormous potential because it had infrastructure. The first step was to make it profitable. We had to say goodbye to hundreds of people. This was a kind of decision that we had to make quickly and it was not easy at all. Obviously, you realize that you have a big impact on somebody’s life, but we understood that a losing bank is like a sick person and we did our best to heal it, even if the treatment was so unpleasant.

In two years we turned a profit and at one point we were the third bank in Romania, and these were great achievements. I realized that things could not continue indefinitely, at those growth rates, even if I did not know that a crisis would come. We made some tough decisions, such as not gaining market share at all costs, so we slowed down the lending. It wasn’t an easy decision at the time, because if you looked left and right, you could see that all the other banks were lending a lot. If you judge a decision at the time you make it, based on everything you know at the time, you can say that you made the right decision, but the final result may or may not be as expected, anytime something may change. In general, we managed to keep a certain balance, we didn’t venture too far to the left or to the right, we kept the middle way. We created a balanced management system in which there was not a single person to say “this is what we do” and everyone to comply. We overcame the financial crisis very well, at a profit, while for five years the banking system as a whole was at a loss. This gave me great satisfaction. On the other hand, for example, the decision to lend in Swiss francs was not a good decision if we look at the final result. So was the decision to start the savings/lending operations in the housing system through Raiffeisen Banca pentru Locuințe, if we look at the final result. This does not mean that at that time it was not a decision that made sense or that seemed very good. It is very easy when you are successful to say that success is yours, and when you are not, to find all sorts of excuses, to say that it was windy, that it was raining, that the referee was not fair or that the legislation was against you. I think the system I created, the decision-making culture, is the best thing I’ve done within the bank. Moreover, there are the team that we built and the banking school at Raiffeisen Bank. They are things I enjoy looking at.

How deep were the transformations that the Romanian economy and the banking system underwent in the past 20 years? What are the strengths and what could improve our country to become spotted on investors’ radar?

Now that you ask me this, I think that the success of Raiffeisen Bank in Romania contributed to the growing interest of foreign banking groups in the local banking system. Following the successful privatization of Banca Agricola, other large banks noticed that good things can be done in Romania. From this point of view, Raiffeisen Bank was an example for the privatization in Romania. There are many possibilities and potential here, from geographical position to skilled labor.

Twenty years ago, there were many problems in the Romanian economy and in the banking system. I remember the lack of trust and the fear of putting money in a bank, which we faced at the time. The Romanians were not used to the idea of having a bank account, and financial intermediation was almost non-existent. I saw that environment as an opportunity, because if you looked at the Western European countries back then, almost everyone had a bank account. Romania could only go in that direction, which turned the local market into an incredible opportunity.

I have watched the maturation process of the local banking market. My belief is that this process will continue. Even if we don’t even recognize the banking system from 20 years ago, when we look at the financial intermediation in the European environment, we can see that we still have a lot to recover. Romania can be for any investor a beautiful story about development, about rise in market share and turnover. We proved it. I can say that 20 years ago I didn’t even think that the banking industry would look like this now. Very good progress has been made, although some things have gone faster and others have been slower. For example, I thought the consolidation process would be faster because there are still over 30 banks. We don’t need so many banks.

For a bank to be efficient, it needs a certain size. I can say that this process took a little longer. On the other hand, the speed with which certain technologies were introduced should be appreciated. It is interesting that here in Romania, we can have the latest developments in banking from technological point of view, yet still we deal with the bureaucracy, with a lack of digitization at administrative level. The contrast is quite high, and this is a challenge.

On the other hand, we should not lose sight of the fact that there seem to be two Romania-s, the one in the cities and the one in the countryside. It is clear that rural Romania needs infrastructure, education, investment, and it is a national issue, which is also related to demography and which deserves to be really debated in public. If you go through certain areas in Romania, especially by bike, as I do, and you notice things at a slow speed, you invariably ask yourself: “What kind of life do the people I pass by have?”. Then you easily notice the economic part, productivity or lack of it. You can see, for example, how much land is uncultivated or inefficiently worked. What I can say is that Romania is definitely going in the right direction, but not always at the optimal speed.

To what extent has the pandemic affected the local banking system and Romanians’ relationship with the banks?

We reacted as a fast and efficient banking system since the beginning of the pandemic. There were immediate support and protection measures for customers, employees, partners, and there was a good cooperation of the business community with the authorities. In this way, the risk costs did not increase much, and the shocks could be well absorbed. We as a bank were even able to accelerate, amid rising demand for credit. I can’t say that we were more aggressive or changed our lending policy. It was more about a good and applied implementation, which contributed to an encouraging advance in the corporate banking segment. We had a stable and balanced course throughout the pandemic. What changed was the speed of the digitization process and the remote work. Here the things moved extremely fast and with a lot of effort from the bank team. Basically, we adjusted ourselves to the digital age, we and our customers. We made so much progress, that since February this year the bank’s agencies operate without cashiers. It’s a big step, many customers did not understood and complained, but it is clear that we can only go in the direction of digitization.

How do you see the future of credit institutions in the digital age?

I can say that it is a very interesting period for the banking system. The world is changing fast, things are evolving incredibly fast today. We have had a period of pandemic that we are not yet sure if it ended, a war is going on at the Romanian border for several months, a war we never imagined we would see in the 21st century. All these exceptional situations superimposed on the inflationary process, rising energy prices, rapid digitization in all areas make the environment in which a bank operates extremely challenging, and the decisions should also be fast and firm. Adaptability and a focus on ever-changing customer needs is the key to success for the banks.

Over time, you have been involved in the development of several important local organizations, dedicated to both the financial-banking industry and the business environment, as well as with a social or cultural profile. Which projects do you consider most important or are you particularly attached to?

Beyond organizations and foundations, I believe that every person or company is part of a community, of a society, no matter how we define it. When you have opportunities, make a profit, or gain some influence to make a difference, why not? I consider myself very lucky to get where I was and have the position I had. I always felt that I had a certain responsibility and a desire to share with others. We cannot expect the government to solve all our problems in the society. A lot of problems can be solved in the communities we belong to by our direct involvement or by means of NGOs and foundations, to be complementary. I wanted to help and show that together we can make a difference in people’s lives. Many say they don’t do it because money doesn’t help or doesn’t reach the right place. I believe that, when you have a certain balance in your life, which means health, family, work, and you live in a community, you have a stronger basis and it becomes important for you to have more pillars in your life and get involved as much as you can. I myself follow this principle. I was involved in many projects and foundations and, if I have to nominate, I would say United Way, a foundation that I set up and brought to Romania (being a global association) and that has a very healthy and beautiful principle – it is financed from funds attracted from companies, but also from individual donations of company employees. Among the projects in which I was involved and we were involved as a bank, Via Transilvanica is a project that I think makes a difference because it can change the lives of the people along this road or of those who go on it, and it shows Romania as is, with an incredible nature, with welcoming people, but also with many things that can be improved.

What advice would you give to a manager at the beginning of career? What are the leadership skills required for a successful business?

My advice would be something like this: You can do it! Things are never easy and it is not good to choose the easiest way. Twenty years ago, when I was thinking about the merger of two banks, one of them with 3,500 employees and huge losses, the success was not guaranteed. It is normal to have doubts sometimes, but don’t let them dominate you. Never lose confidence in success or in the possibility to achieve your goals!

What can you tell us about your future plans? What will be the next step in your career?

This is both an easy and a difficult question. Undoubtedly, Romania will play a very important role because I will stay here. For me, Romania is home and will so remain, no doubt. For the past 20 years I’ve lived here, my wife is Romanian, one of my children lives in Romania. Personally, I am happy to have free time, because I want to travel, do more sport, reconnect with the nature, start a small business with my sons, teach more to students (I already teach Business Ethics and Corporate Social Responsibility to MBA students) and obviously I have plans for my photo projects (and they are quite a lot). I hope I will always have more plans and ideas than time to accomplish them. I have received proposals to participate in supervisory boards and I will probably do so. I would not want to lose touch with the business community in which I worked for so many years. But I take it easy! I have more ideas and plans than time, hence I think I will not get bored at all.

 

Interview by Ioan Dornescu