AstroBank CEO Aristidis Vourakis on offering quality banking services to businesses and individuals and developing a paperless environment.
1. Your assumption of office coincided with the COVID-19 crisis. How easy was it for AstroBank to adapt to this environment and how much did it affect your plans?
It is no exaggeration to say that the COVID-19 pandemic and the fear and restrictions that came with it almost took us back to the Middle Ages in terms of social life. The increasing interaction of the last few years, through travel and outdoor living, came to a halt pretty much overnight as did the operation of office spaces, schools and, in a few cases, industry sites. AstroBank adapted relatively seamlessly to this new environment in terms of operation. Our electronic delivery systems effectively allow for the execution of most payment transactions remotely, via mobile or the Internet, while more sophisticated services were again delivered remotely without the requirement of physical presence. As we exit the pandemic, our focus is on the operational front to capitalise on the experience built during a year of remote operation, to further develop a paperless environment and enhance the work experience of our employees through a measured remote working proposition. On the business front, we are eagerly awaiting the resumption of ‘business as usual’ in the many sectors that have been affected by the pandemic and where very important investments, financed by banks, have been made in the last few years.
2. How do you view the banking sector in Cyprus and what is AstroBank’s position in this sector?
The banking sector in Cyprus has registered significant improvements following the stress faced during the previous decade. In line with other European banks, banks in Cyprus operate with stronger capital buffers, tighter credit standards, fully revamped compliance and oversight structures, with more effective electronic delivery. The Cypriot banking system has also been rapidly consolidated, with the number of banks declining to a level more attuned to the size of the population and the economy.
AstroBank, as medium-sized bank, has done its fair share of consolidation through the absorption of the former USB Bank at the beginning of 2019 and today it operates a larger footprint with 14 units and over €2.5 billion in total assets. Our aim is to be close to our selected clients across the universal bank offering and we wish to distinguish ourselves through the quality and timeliness of our services. Due to our medium size and closely coordinated organisation, we can offer tailor-made solutions for all our business lines including corporate, retail, private banking and international clients.
3. In your opinion, how likely is a scenario in which Cyprus sees an increase in non-performing loans as a result of the pandemic?
A lot will depend on how consumer behaviour and activity develop, following the lifting of COVID-19 restrictions, not only in Cyprus but across the entire world. For the two years during which we have been running with restrictions, banks, businesses and consumers have been shielded from the effects of the economic slowdown, through a mix of monetary policy support and direct government support, as well as regulatory forbearance measures for banks and borrowers. If economic activity resumes at the same pace, the impact of COVID-19 will be two years of foregone cash flow. If, on the other hand, consumer behaviour changes – with less travel, reduced usage of office and teaching space – certain investments of the past could become less profitable. Still, I believe that since the 2013 crisis, banks have been able to operate with tighter criteria and still perform with lower profitability. Moreover, the banks are in a stronger financial position that can sustain a measured dislocation. At the same time, by no means do we expect an impact on the economy that is comparable to that of the previous crisis.
4. The pandemic era saw many companies starting their digital transformation very quickly. How did AstroBank participate in this process and what else can we expect?
In 2020, we launched our ‘Paperless Cashier’ service at all our branches. All documents provided in over-the-counter transactions are signed electronically and statements are sent to customers via e-mail. This was done for those who still want to come to our branches to carry out their transactions rather than through our fully functional electronic channels. We are continuing in this direction, in order to make our operations ‘paperless’ to an even greater extent. When we say ‘digital’, we are not only referring to the delivery front, where banks have been making good inroads for a few years now, but to all the operations of the Bank. The less paper, the easier it is for processing to be fulfilled and the more efficient the Bank becomes. Certain recent legislative initiatives, including the e-signature legislation, are particularly conducive to this end. Similarly, a lot of meetings became ‘virtual’ during the pandemic. This was another major achievement in terms of our green credentials and efficiency, as we reduced transportation costs and their environmental impact as well as time-consuming face-to-face communication.
5. As a newcomer to Cyprus, how do you see the Cypriot economy and the role of Cyprus in the region and the European Union?
I have been following Cyprus for almost 20 years now and I am impressed by the improvement that it has registered, essentially over the last five years. Cyprus recovered rapidly from a very deep financial crisis and has firmly established itself as a credible regional hub serving Eastern Europe and, increasingly, the Middle East. It has built a world-class infrastructure and the development of the city of Limassol is a visual testament to this progress. I believe that Cyprus’ location, close to the permanently turbulent Middle East, and its membership of the European Union offer continuing growth opportunities. Capturing part of Brexit-triggered business flight is one opportunity. Offering business infrastructure to the Middle East countries, including Israel, is another. Continuous investment in high-technology sectors operating from Cyprus, such as Forex and the software industry, is a further opportunity.
6. How does AstroBank facilitate economic growth in Cyprus?
AstroBank serves the banking needs of Cyprus businesses and individuals, but also of international clients operating in Cyprus. We finance productive investments by priority. We offer quality asset management for international investors to manage their funds. This, in addition to day-to-day banking services. Through our extensive contacts in the Middle East, we also aim to attract specific investments in the country from investors abroad. Besides, it should be noted that AstroBank itself has attracted over €150 million over the last three years to strengthen its capital base and facilitate its growth and, ultimately, the business of its clients. We are available to discuss every good project in Cyprus and offer our advice and support.