The FINANCIAL — The number of VTB Bank Georgia’s staff decreased by 85 people as a result of the latest rotation imposed by the Bank’s management. The Bank changed its dress code and introduced a new management system. “Now we don’t have any accountants in our back offices,” Nikoloz Shurghaia, General Director of VTB Bank Georgia, told The FINANCIAL. Levan Lomtadze interviewed Mr. Shurghaia about the new strategy of Russia’s co-owned bank in Georgia.
VTB Bank Georgia’s new General Director Nikoloz Shurghaia was appointed on August 8 by the board of shareholders. Shurghaia worked as Deputy Director since May 15, 2008.
Mr. Shurghaia has 14 years working experience in the UK, Russia and Georgia. Before joining VTB he worked for the EBRD London office. During 1994-2002 he worked for Eximbank Georgia and United Georgian Bank. He has a Master’s degree in Business Management from London Business School.
VTB Bank Georgia has completed its employee optimization process after centralizing accounting and operational management systems. The Bank has also introduced a new dress code for its employees. The final number of employees will be 781 people.
As a result of this, there was a rotation of workers and their number was decreased by 85 people. The amount equals to about 7% of the entire staff. The process was guided by a special commission created by the management.
“There were three main factors that could explain the staff reduction. First of all, VTB had completed the entire centralization process of accounting and operational management. It enabled the bank to improve the qualitative part of the Bank’s management. From this standpoint the Bank is leading in the Georgian market.”
“Secondly, the bank tried to increase its effectiveness by cutting the number of inexperienced employees. And finally, the global financial crisis eliminated chances of economic activity for some business directions. We believe that because of the global financial crisis in the first quarter of 2009, there will be fewer activities in the department of consumer loans. We are seeing a lower demand for consumer loans. In some areas we don’t want to lend as much as we used to, before the crisis. The majority of the 85 people were made redundant because of low qualifications.”
“VTB approached the employee optimization process very seriously. We took into consideration the qualifications of every employee, their experience of working in a bank and achieved successes. Those employees whose contracts were terminated before the date of expiry have received compensations. One month’s salary is the minimum demanded by legislation, but we’ve paid up to three months’ salaries,” General Director of VTB Bank Georgia, told The FINANCIAL.
The improvements in the business management process left some of the employees without functions. As Shurghaia said, the bank will try to find alternative positions for the experienced employees whose contracts were terminated.
New Dress Code
“We decided that it was time to make things more appealing for the customers and bring in a higher level of order. Our designer, Marika Qavgaradze, designed the new blue coloured ties with the logos of VTB Bank on it. In addition to the new clothing style, we are preparing renovated covers for our ATMs. All the changes were done in accordance with VTB’s brand book.”
VTB bank is redesigning the buildings of its branches. Three of the major renovations of branches that the Bank is going to make in Tbilisi are its central office on Chanturia Street, on Rustaveli Avenue and Didube branch. In addition to this there will be 5 other branches in Poti, Rustavi, Gardabani.
“The layout of the buildings will be modernized and we will improve the functional part of the business processes. Distribution of work between our credit officers and credit administrators will undergo changes. The size of the branch manager offices has been reduced. And at their expense the area for client service was increased. Thus we were able to make improvements in flexibility and efficiency,” said Shurghaia.
“Now we don’t have any accountants in our back offices. We are pioneers in this system in Georgia and among VTB Banks in other countries. All of the accounting operations which were conducted in branches are now centralized and executed from the central office. This decision eliminated the number of accountants in branches,” continued the General Director of VTB Georgia.
“Good appearance is appreciated by customers in general, but this is not the key criteria for staff reductions.”
“Another category of workers who were made redundant were those whose qualifications didn’t correspond with new standards. Some people who were working at our bank for years couldn’t adapt to a new working environment. Those who weren’t performing as well as we would like to, had to leave.”
EBRD is an 8.95% shareholder of VTB Bank Georgia. At a time of investment EBRD invested USD 4.1 million in VTB. In addition EBRD provided a USD 10 million loan for medium and small size businesses, after the crisis started.
VTB is present in 17 countries, on three continents. Alongside the CIS, its activities cover countries of Western Europe, Asia and Africa.
VTB Bank has received custodian status for Russian companies under the Bank of New York Mellon GDR Programme, thus becoming a fully-fledged partner of global custodians. The first stage of cooperation will commence early December 2008 with a transfer of shares under the GDR Programme to VTB Bank for custody, starting with such companies as Sistema-Hals, RBC Information Systems and IRKUT Corporation, with Tatneft, TMK and Chelyabinsk-Zinc expected to join them by the end of the year. At the second stage there will be a transfer to VTB Bank of GDR Programmes for shares of a number of other Russian companies, including those from the RAO UES of Russia.
In October 2008, JSC VTB Bank assets according to Russian Accounting Standards (RAS) increased 11%. Over the ten months of this year, the Bank’s assets have grown 46%, to RUR 2,207 billion from RUR 1,507 billion.
Currently VTB has 27 branches in Georgia. The Bank is going to close 1 branch in the end of January located in the Marriot on Freedom Square. In 2009 VTB plans to open up six new branches.
Written By Levan Lomtadze
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