The reality of banking has changed and the sector is facing monumental challenges. The competitive environment within the banking sector is marked by the on-going phase of zero and negative interest rates. Historically low base rates and the ECB’s asset purchase programmes are keeping market liquidity at a persistently high level, which is exerting corresponding pressure on margins.
We must accept these conditions and look ahead in order to find the right answers today for the future. That is why we have launched measures and initiatives to shape Helaba’s future and improve its long-term competitiveness.
In doing so, we have set ourselves a clear objective: to maintain and expand our strong position in the market as well as to noticeably boost our earnings over the next few years.
The key will be to preserve and further strengthen this sustainable basis. Against this backdrop, we have launched a number of projects and initiatives and we are concentrating on three tasks in this respect:
These three tasks are focused on three aspects: focused growth, long-term performance and responsible conduct. We view this as a three-pronged approach consisting of associated tasks and objectives which – co-ordinated between one another – stand for the successful evolution of our bank into a future-proof entity. Accordingly, we are driving all three sets of tasks ahead at the same time and must not lose sight of the evident dependencies that exist between them.
We subjected our business portfolio to a comprehensive review, which affirmed the viability of the bank’s business model and strategic alignment. Therefore, in the future we will continue to serve our customers in three functions: as a commercial bank, as a central bank for the S-Group (service provider and product supplier for savings banks) and as a development bank.
However, the results also showed that, with a view to the changed conditions, it was necessary to make some business policy and organisational adjustments. One important decision in terms of the S-Group business was a decision to follow the example of other sales units and bundle product responsibility into various specialist units. Now, as a consequence of this, all units at Helaba are responsible for S-Group business and the S-Group bank is no longer the only unit driving the business ahead. This expansion in responsibility is making itself positively noticeable in our activities with savings banks. We have also strengthened our international business by setting up a dedicated unit - “Banks & International Business”.
As a result of refining our business model, we have changed the depiction of precisely this business model and have redesigned the segment structure. We offer our customers tailor-made products and solutions from our segments of Real Estate, Corporates & Markets, Retail & Asset Management and Development Business.
A sustainable basis has therefore been created for the focused development of the business model which builds on findings from this portfolio review; at the same time, various growth initiatives have been agreed.
For instance, the bank will use its strong market position in the real estate segment to further expand its syndication business in Germany and Europe. Furthermore, in Corporate Finance we have created the necessary conditions in order to be able to offer customers our know-how in asset and liability management in connection with additional products as well, for example in the off-balance sheet financing of receivables portfolios. At the same time, we are expanding syndication activities in the areas of aircraft and acquisition finance. In the midcap segment of companies with revenues starting at 250 million euros, we have made encouraging headway and will adhere to our strategy of continually acquiring new customers. In respect of the realignment of the capital markets business, we will concentrate on increasing our client-driven focus and, in order to achieve this, we will also increasingly offer digital solutions. We already adjusted our strategy in municipal lending activities last summer and now offer this product, which provides margins that are currently still attractive, even more widely in areas outside our core regions. In addition, we have identified opportunities for growth at international locations as well as in our business with international clients. A very ambitious project is the improvement of processes and the expansion of customer relationships in foreign commercial business, especially with the savings banks.
The aim here is to be the preferred partner in all our business activities when it comes to finding solutions to our customers’ financial issues and to expand Helaba’s strong market position
Our infrastructure has a significant impact on Helaba’s future viability. Helaba is creating the basis for the lasting efficiency of the bank as well as for infrastructure and organisation that conform to regulatory requirements by making long-term and forward-looking investments in modern and stable IT systems.
The focus of this is also to further enhance our processes and overall project management skills. In addition to this, we will also continue to expand the IT security organisation.
At the same time, we want to make further use of available opportunities to optimise our business and IT processes with our “Digital Agenda”. In the course of this, Helaba will redefine the interface to the customer and create options to develop new products.
The focus is on providing customers with innovative and digital platforms to carry out their banking transactions with confidence and added simplicity. With the launch of the “Helaba Client App”, we have taken the first step towards digital rights management that offers our customers a greater degree of accessibility, transparency and efficiency in their relationship with us.
Additionally, client portals for Helaba’s wholesale customers and in the business units of Corporate Finance and Real Estate Lending have reached an important milestone with the completion of the first releases. Beyond that, we intend to boost the efficiency of internal processes with additional digitalisation projects.
In our successful Schuldschein activities, we have entered into a co-operation with the digital issuing platform “vc trade”. Now, for the first time ever a fully digital platform is available that prevents media discontinuities, increases transparency and raises efficiency.
These initiatives will be complemented by support for the Frankfurt-based TechQuartier, investments in venture capital funds for fintech start-ups as well as the creation of a Helaba-owned holding company to make direct investments in fintechs.
Inherent in the aforementioned operational measures is also the necessity to ensure that, in respect of its corporate culture, the bank is able to meet the challenges of the future. Digitalisation not only plays a role in terms of how we define the way in which we interact with our customers and how we can further improve our business processes. It is also leading to long-term changes in our economic and social systems. Changes to our daily work will be particularly noticeable.
At Helaba, we have a reliable set of values and a positive corporate culture. Now, our job is to transport this good basis into the digital age in a responsible way and to adapt our tried-and-tested corporate culture to the demands of digitalisation as well as modern working practices.
We will actively accept the challenge presented by the digital transformation and, accordingly, orientate the bank towards it. In doing so, we should maintain the strengths of our culture in these change processes and use them in an effective way. As part of this process, we also want to support alternative concepts for the workplace of the future and new forms of collaboration.
Corporate and social responsibility also means that Helaba consistently aligns its conduct towards the principles of sustainability. For instance, in addition to signing the UN Global Compact some weeks ago, we have defined a binding Code of Conduct for our employees and agreed guidelines for lending activities. In this way, Helaba wants to build on the optimism and existing trust in the bank’s actions.
There is a lot going on at Helaba and we have already achieved a great deal. In particular: we have taken or initiated the necessary steps in order to make Helaba fit for the future – operationally, organisationally and culturally.
“We have taken or initiated the necessary steps in order to make Helaba fit for the future – operationally, organisationally and culturally.”
Herbert Hans Grüntker
Chairman of the Board of Managing Directors