SNAPSHOT
The Manager: Levon Hampartzoumian
The job: Chairperson of the board of directors and CEO of UniCredit Bulbank
In brief: Complete with twists and turns, his CV includes a position at a computer engineering institute, five years of freelance translation, setting up and managing his own consultancy firm, managerial posts at Coopers & Lybrand, PricewaterhouseCoopers and Ernst & Young, a short post as head of the Privatisation Agency and as a deputy economy minister. He joined UniCredit Bulbank in 2001.
There is that air of restrained urgency as he approaches down the corridor. The corridor leading to the room we are to hold the interview is long. His strides are also long. And quick. Though not as quick as to cause his jacket tails stream behind him. His features are relaxed: as if he has arrived from a lunch with friends and not from a business meeting that overran by 15 minutes. Sandwiched between that business meeting and subsequent interviews for bTV’s news department and Reporters programme, he is wearing his smile.
The bland smile has become the trademark of Levon Hampartzoumian, the chairperson of the board of directors and CEO of UniCredit Bulbank (and predecessor Bulbank) for the past seven years. No doubt a public figure with a plethora of appearances on TV, at news conferences, other conferences and roundtables, he always wears that smile. The soft-spoken, but sharp and forward-looking statements on the banking sector’s past, present and future, another trademark.
As he later explains, “If we assume that the better half of mankind comprises well-mannered people and if one attempts to be affable then one should reasonably expect reciprocity in return.”
Maybe because of the consistency of his appearance or the often-shown wit and figurative speech, the media has never ignored him. He is a household name.
Leaning forward in the armchair, he’s no different and ready to take up questions. As if urgency has been asked to wait outside, after all urgency is no emergency, he is in no rush when speaking. It did knock several times, though. Through the phone. Terse yet polite “speak to you later” and onto the conversation again.
Career path first.
Vicissitudes of life
At the beginning of his career about 20 years ago, Hampartzoumian never imagined that life’s twists and turns would usher him into the banking sector. Yet it was his choice to shun chemical engineering, although he has a degree in the field.
His first job was at a Sofia computer engineering institute, whose core task used to be the reverse engineering of US computer technologies. He would participate in decoding the technology to assemble PCs, mainframes and printed-circuit boards.
The planned economy, though, started showing signs of disintegration in the mid-1980s. Intuition, that sixth sense he says he listens to, prompted him to search for job opportunities elsewhere. And here came the very first radical change in profession.
He used his technical expertise and marketed himself as a translator and interpreter. “I translated technical documents and at seminars for whoever paid me,” he says.
When the socialist system crumbled to give way to the offshoots of democracy, Hampartzoumian moved in yet another direction. Looking at new opportunities gave birth to the consultancy Bulgarian Audit Company (BAC), which he created together with his friend Martin Zaimov.
Though small it quickly established itself on the market and came to the attention of, what was then, Coopers & Lybrand (C&L). The big accounting firm first opted for association with BAC and then in 1994 bought it. To Hampartzoumian this meant an invitation to run the Bulgarian office of C&L.
In between the large-scale mergers and acquisitions of the world’s top accounting firms in the 1990s, which saw C&L’s integration with Price Waterhouse into PricewaterhouseCoopers (PwC), Hampartzoumian consecutively assumed positions as director of PwC’s business development department and as director of the corporate governance department at rival firm Ernst & Young.
Then came a two-year position in Bulgaria’s public sector as chief of the Privatisation Agency and a deputy economy minister.
And in 2001, Hampartzoumian’s blend of relevant experience made recruiters on the lookout for a CEO of then-Bulbank (now UniCredit Bulbank), in 1996 the first state-run bank to be privatised, select him from their shortlist of 10 candidates and offer him the position. To Hampartzoumian, banking was no goal in itself and he quips that he “landed on the top position at the bank with a parachute”.
Learning on the go
Well, not quite, he then says, on a more serious note. His transfer to the sector was, rather, a natural process, he says.
“Up to that date, I had participated as a consultant in privatisations, restructurings, management of state property,” he says. “This palette of activities is quite similar to the operations of a bank. Hence my transition to banking was a natural turn in life.”
It is as if change has been the thread that has knitted the various stages in Hampartzoumian’s professional life together. The bank, which to sustain its top positioning and to fully adjust the model of the parent bank to local conditions, was in the middle of deep restructuring at the time Hampartzoumian joined.
The personal challenge to Hampartzoumian was to learn on the go. Since day one at UniCredit, he says, “the challenge lay in understanding the way in which the organisation worked, to ‘sell’ myself not only on the market but also to the people in the bank. Concurrently, I had to keep up the pace of restructuring against the background of a very dynamic market.”
Corporate restructuring never stopped and was hectic until last year, when after the announced merger of UniCredit, HVB and Bank Austria Creditanstalt in 2005, the local assets of the three - UniCredit Bulbank, HVB Bank Biochim and Hebros Bank were integrated and optimised.
What next ?
Now that the business outlet network is streamlined and wired with an integrated computer system, the immediate tasks in the merger process, the bank’s focus this year will be on enhancing the quality of service, Hampartzoumian says.
“Satisfaction of clients and bank officials is our primary task,” Hampartzoumian says. “At the moment, competition on the market is such that it minimises the prospect for serious service price cuts. At the same time, the main groups of products on offer here are similar to those in more developed countries. Therefore, the point of differentiation between banks will be the quality of service and customer satisfaction.”
The new focus seems a natural development and consistent with banking sector deficiencies as international research has unveiled.
One example comes in handy. A March 2007 survey of International Service Check, a global service quality monitoring company, put Bulgaria at the bottom of a South-east European chart on banking service quality. None of the banks that made up UniCredit Bulbank featured in the top five ranking by country.
Officials matter
The ambitions of UniCredit Bulbank toward higher quality of service and customer and personnel satisfaction can be seen everywhere. In the meeting hall, right next to the half-a-dozen best bank certificates conferred by Euromoney, The Banker and Global Finance magazines since 2001 hangs a 2-1.5 m aquarelle. It features a multi-colour tri-trunk tree, its trunks, branches and leaves carry hand-written messages. Written by key officials from all three of the banks that are now part of UniCredit Bulbank at a team-building meeting on May 3 2006, they convey empathy, calm, stability, friendliness and messages that attune one to understanding of the other’s needs.
Hampartzoumian says that a client can be content only if bank officials are content. Still, he believes there is no single formula to achieve the satisfaction of his employees.
“We try to be responsive to the environment, to respond to the individual problems of each employee as much as this is in unison with corporate interests,” he says. This occurs through regular surveys on worker satisfaction. Furthermore, he sees it as the manager’s responsibility to find the right individual approach with each of his team members and achieve the right feedback.
Turning to his managerial style, he is no authoritarian.
“Rather, I am the person who is looking for consensus,” he says. “If it cannot be reached, I am tough enough to demand that some things happen. At the end of the day we are not an association for psychological mutual aid and some things must be superimposed with a certain portion of… coercion.”
He made it clear, though, that the coercion needs to be rooted in goodwill because “an organisation can hardly be successful if managers keep their colleagues under stress”.
Top market share too
Since Hampartzoumian has been at the helm, his bank has never lost its top placement in the market. The group, which includes a bank, a leasing holding, a factoring holding, a real estate joint venture with Pirelli, the asset management arm Pioneer, the fast consumer lender UniCredit Consumer Finance, jointly holds a 20 per cent share of the market. Hampartzoumian expects the same share this year, plus or minus several per cent.
There are no plans to create new subsidiaries, although Hampartzoumian says that plans might have changed by the end of the year, quality of service and enriching the palette of products will be the main instruments for staying on top.
He does not put up a particular product category as the growth engine for the banking group. “Loans, deposits, Pioneer funds, credit cards, e-banking channels, new corporate products such as direct debit will all contribute to overall growth,” he said. Hampartzoumian cautions, however, from expecting stellar growth figures in view of the high asset base.
“If there are no serious external shocks, the banking system in all will continue to grow, although at a slower pace than in 2007,” he says.
Hampartzoumian does not fear competition but also does not underestimate the peer players.
“We regard each bank with a licence to operate in Bulgaria as a serious competitor. Each player that arrives on the market with an interesting product and offers good quality stands the chance of gaining a serious market share,” Hampartzoumian says. “Yet another issue is clients’ perception as to how capable a competitor is of challenging us.”
The single passport, the model allowing European Union-registered companies to operate in any other member state – with notification to the relevant watchdogs in that country the only condition, will not cause a major reshuffle of Bulgaria’s banking sector, according to the expert. Even if a major foreign bank enters Bulgaria, it will hardly make a big impact with one or two local offices.
The pillars on which a successful bank rests, Hampartzoumian says, are a good and well-prepared team knowledgeable of local conditions, products and working practices of the banking group and a sufficiently dense and nationwide branch network to bring the service close to the customer.
“Even if a serious foreign bank enters the market, it will need people with knowledge of local rules and relations, so it is not so easy,” he says. “Try to sell sunflower seeds in Prague. Though it is not impossible and the Czechs might have the seeds as their next craze, it won’t be easy. The chances of this happening though are not that high.”
Loan expansion fears exaggerated
Loan exposure in Bulgaria is no reason to fret, according to Hampartzoumian. So long as banks carefully scrutinise the risk pertaining to loans and loan applicants borrow sums commensurate to income, at time of need and under affordable conditions, the risk of a credit crunch is minute.
A well-educated youngster with bright career and income prospects, for example, can afford more debt, unlike someone with only a primary education.
The loan culture in Bulgaria, however, is nothing like that in Anglo-Saxon countries, where loan exposure is notoriously high, Hampartzoumian says. “In the UK or the US, banks and non-banking financial institutions are so engrossed in rivalry that they, very aggressively, push people into taking out loans, which many qualify as exaggerated,” he adds.
The national psychology in Bulgaria is unlike to let such a scenario arise, though there will be individual instances of hyper-indebtedness. “Therefore, there is still potential for loan growth both in the retail and corporate segments,” he says.
Hampartzoumian believes there is no gauge for the optimal loan exposure in Bulgaria. Such estimates are rigid and fail to take into account the nuances in the needs of individuals and companies. “A person has one need when studying, other needs when working, third needs when a parent with children who study, fourth needs when he wants to consume, vacation under the palm trees or buy a car once every two years,” he says. Hence, there is hardly a static percentage stipulating a certain debt or savings percentage.
Though there are levers, which can keep the banking system in check. Credit bureaus are among them, he says. Such bureaus assign loan scores to individuals and companies based on past behaviour of loan repayment. Data used in calculating the score includes not only loans from banks and non-banking institutions but also utilities that also offer services on loan.
Scores allow lenders make informed decisions on whether to issue a loan and help them manage risk better, Hampartzoumian says. They have a disciplining effect on the market and that refers not only to the people taking out loans but also to banks, leasing holdings, consumer lenders, all players that can participate in such a system, he adds.
Shoot it out
Riding the crest of the wave eats up the time of a professional. “I have less free time than I would wish,” Hampartzoumian says. However, not to an extent to have none at all. Maybe a longer vacation to a remote place might be replaced with a shorter one nearby or a shorter trip with a daylong picnic with his camera slung over his shoulder.
Hampartzoumian has a particular leaning to photography. With his several professional cameras he shoots anything his intuitive nature finds interesting – whether it be birds, animals, people in places he visits.
“I am good with Adobe Photoshop, good enough to get a job if I lose this one,” he says laughing.
Friends are another of his favourite pastimes, being a typical representative of the southern mentality. “Northern people go to psychoanalysts, we hang out with friends,” he says, adding he never thought why he meets friends. He generally meets them at home because in pubs he finds it burdensome.
“For good or for bad I am a public figure,” he says. “I cannot afford to be arrogant or miss greeting someone I know.”
Not that Hampartzoumian takes pleasure in being arrogant. He thinks arrogance is the state of mind of primitive people. What he believes in, however, is that one should treat others in the way he’d want to be treated.
And mottos don’t work in times of trouble. “If a motto served as cure-all in all situations, then that would mean I lived a primitive life,” he says. “Instead, when I run into a problem, I try to analyse it and find a solution.”
Hampartzoumian seems to have found many solutions and to have conveyed them well so they ring true with partners, media, the public. In fact he’s so adept at this that UniCredit uses him as its major tool to achieve public prominence. Hampartzoumian has not yet said it all and the public has not heard it all.
