MAIB, Moldova’s largest commercial bank and lender is on its way to a massive 4 pillar transformation. Growing in retail, committing to the digitization of products, the pathway to IPO and regional expansion - The CheckPoints sat down with MAIB’s Georgian CEO, Giorgi Shagidze, to find out more.
Giorgi Isakadze: How is MAIB doing? Where do we stand so far?
Giorgi Shagidze: Thanks again for having me. MAIB... First of all, it's the indisputable leader of the market. We're talking about 35% in loans. If you think about the other banks, the number two bank is about 19% and the number three bank is 17% and so on. Clearly, MAIB is positioned as the indisputable leader across all the key products and segments. That said, though, we launched the transformation and refreshed our strategy. We have lots of new initiatives. They can be grouped into four areas. Number one, this is customer experience and putting the customer in the center of everything that we do. This is a very big statement, and I know that many companies do it, but it really requires lots of transformation, lots of cultural changes, and changes in the mindset. We did do the brand refreshment. We have changed the operating model of our branches, especially the design. The model is more important. Number one is the customer in the center. Number two, this is digital and initiatives in digital space. Of course, we are upgrading the user experience functionality of our digital banking channels. On top of that, we want to create an ecosystem for cars, automobiles, SMEs, housing.
Giorgi Isakadze: By the way, you're growing in retail and SME dramatically. It's + 4 percent for this year.
Giorgi Shagidze: Yes, it is a part of our strategy to grow in retail. The digital priority concerns the combination of the traditional banking channels plus the ecosystem. Number three, this is IPO and this is big as well. When the largest bank does the IPO it acts as the gateway to bringing new investors into the country. So, this is very important and this is a much bigger project than its direct impact on MAIB, its share price, or the capital position. So, this will have a positive impact on the entire business climate of the country. We started the preparation for this. There is a lot of regulatory changes required. We recently arranged the Moldova Capital Market Day on the London Stock Exchange, and we have planned plenty of investor engagement this year. Number four is regional expansion with digital products and services. The word digital is key here. There are about one million Moldovans living in the EU and we want to approach them and offer digital services.
Giorgi Isakadze: You mentioned the large bank with IPO ambitious but worth to mention large bank from the small country. Moldova looks like Georgia structurally in terms of business and the economy. You have had successful experiences, I mean, TBC IPO and achievements of TBC where you were engaged professionally for 10 years. Am I right?
Giorgi Shagidze: Yes, correct.
Giorgi Isakadze: Tell me how IPO is a part of these four initiatives and not necessarily a number one priority?
Giorgi Shagidze: I think we can technically do IPO. We can definitely do IPO. But I think if we want to position it correctly, get the right investors, get the right share price, get the right impact, then we need to ensure that we have a proper strategy, we have proper financial results and that has some history, and ambitions. Therefore, they are equally important. It's very difficult now to tell you which one is more important or less important. Maybe, IPO technical part is not that big, but the decision to go to IPO and to prepare the entire bank to change the governance, to change the mindset is important. We have started working in this direction. I would not say which one is more important at this stage. IPO will have a big impact on the company.
Giorgi Isakadze: When do you plan to launch it? Do have some dates in mind?
Giorgi Shagidze: Yeah, our basic scenario is the 2023 first half. It could be earlier. It depends on many things, but the basic scenario is the 2023 first half.
Giorgi Isakadze: So how similar will be the way of MAIB's further development to one of the most successful and systemic banks in Georgia TBC during the last ten, twelve years? Is it an explored way personally for you or there are some similarities, but at the same time, different cases happening in Moldova?
Giorgi Shagidze: There are many similarities between Moldova and Georgia, starting with the past and the vision to be integrated with the West. There are many similarities. The key difference, when we speak about the banking sector is that the banking sector in Georgia is less penetrated, which creates more opportunity. MAIB is around the size of TBC when TBC was doing its IPO in 2014. So, this is a very good starting point. That said, many things have changed - the way we are looking at the other banks, other fintech, other offerings.
Giorgi Isakadze: By the way, the team that was part of Monobank in Ukraine in the user experience direction, are your partners, right?
Giorgi Shagidze: Yes, we have partnered with them for the user experience of our digital product. We want to achieve a breakthrough with them. There are other areas - we are engaging the companies from the region with quite cutting edge offers and services. Did you see our Christmas tree, which looks very digital?
Giorgi Isakadze: I was amazed by your drone show as well, and Christmas Tree was fantastic.
Giorgi Shagidze: So, 2022 for us will be the year of digital focus. We will be launching many innovations and many new attractive products for the customers during the year.
Giorgi Isakadze: I hope all of them are going to be public because you are on your way to IPO. The level of the corporatization of MAIB is quite high. Do you need some additional things for the corporatization or what are the plans for 2022?
Giorgi Shagidze: The corporate governance is quite proper. We have seven members of the board, three independent members of the board, all the committees, most of them are chaired by the independent members. EBRD is one of our shareholders and obviously is committing to the long-term improvement of the corporate governance standard. There is no limit to continuous improvement, right? So, there are many things that we plan to do. New shareholders entered the bank in 2018 when the change broadly started. We refreshed the strategy last year. The four pillars that I have discussed will be our focus for the medium term now.
