Article

The St. Petersburg Times, 24 Октября 2006

Managing a lack of banking professionals

By Anna Akhmedova Special to The St. Petersburg Times

St. Petersburg's banking market is undergoing something of a retail boom. More and more banks are opening retail facilities with an eye on becoming universal financial institutions.

Banks have a particular interest in consumer credits, something still not widely developed in Russia, and they are trying their best to offer various types of credit.

All of which results, in the short-term at least, in a deficit in qualified top-managers, as well as higher salaries, in the sphere of retail banking.
Olga Dragomireckaya, head of Gazprombank in St. Petersburg, said that the monthly salary of a top-manager in retail banking can reach $3000.

According to Anna Bogina, head of the Finance and Banking group at recruiting agency ANCOR, the head of a bank's retail department might earn $2500 to $5000 a month, depending on how successful the bank's business is.
While Yulia Kriyevich, head of Kelly Financial resources at the recruiting agency Kelly Services, said that with a decent command of the English language, a manager might earn up to $5000 a month.

It is important to note that specialists in corporative banking can only earn these kinds of salaries with no less than five years' experience, while in retail, in view of the lack of qualified labor, even young specialists can earn such amounts.
Kriyevich said that the average age of specialists in the retail business was 30.

«The deficit is connected with the fact, that retail banking in Russia is still at an early stage of development,» said Alexander Konishkov, head of the St. Petersburg branch of the International Moscow Bank.
Dragomireckaya said that Russian banks have concerned themselves with retail for a long time, and that is why new technologies and specialists are only just appearing.

Pavel Izumov, deputy director of the Petersburg office of Nomos-bank agreed, saying it is a logical consequence that there is no qualified management.

The top jobs are usually given to the heads of banking offices, who, as a rule, know how to work with private clients.
They have contacts and experience of working with people. And Izumov believes that the qualified managers in this sphere have been well trained for retail banking. In fact banks have begun headhunting managers from the sphere of fast-moving consumer goods.
«Such people are interesting to banks because they are good sellers,» said Bogina. They can go to any interesting shop and instead of selling cola or cigarettes sell banking products, she said.

They have qualities much needed in retail banking. And people with a deep knowledge of the banking business do not have such experience, she added.

So banks have to choose.

There are nearly 50 top managers currently working in St. Petersburg's retail banking business and another 50 such vacancies. In corporate banking nearly 300 professionals are involved in management and the deficit stands at nearly 100 people.
According to Bogina the same applies to foreign banks.

«The difference is in the language. Foreign banks want their managers to know English,» Bogina said, adding that a salary can increase by up to 20 percent accordingly.

If Russia enters the World Trade Organization, many of the country's banks will get bought up by Western institutions.
So, according to Bogina, managers already working for Western banks in Russia will be in a good position.
She is confident that as the retail market grows so salaries will follow suit.

«I think that banks will hire young specialists and train them as appropriately-skilled managers,» said Bondarevskaya.
Of course preference should be given to those with experience. Universities offer a universal education, but every bank has exclusive services. Two to three years in retail counts as good experience, she said. Corporative credits are more developed, which is why there are more managers in this sphere of banking.

According to Indrek Neivelt, chairman of the supervisory board of St. Petersburg Bank, finding a good manager in this sphere is not a great problem.

«The main thing is to find a manager who's grown up in this market and has a certain flair and the ability to take one or two large steps forward,» he said.

For Bondarevskaya the key to being a manager in the retail business is communication — you should be able to explain everything to a person who knows nothing.

At the same time, a manager from the retail sector needs less knowledge because he works with people — he needs to do less analytical work.
«I am convinced that after university it is much easier to get into retail banking than corporative banking,» she said.
Even the import of experienced Western managers won't solve the problem of deficit, said Izumov from Nomos-bank.
«To be successful in retail-banking, a manager must have an idea of the specific character of the Russian banking business,» he said.
Neivelt agrees. «There are no problems finding top-managers with experience, because a bank can invite him from abroad. But if they hire someone who doesn't know how this very market is thinking, he won't be effective,» said Neivelt.

Izumov said that as a rule, in banks with Western capital, Russian managers hold the top jobs while Western specialists only occupy middle-management positions.

«The lack of managers in retail-banking forces banks to outbid their rivals when a top-manager becomes available. That is why salaries are so high in this sphere,» he said.

In his opinion, a manager's salary could be anything between 20,000 rubles ($741) to 55,000 rubles ($2037).
«The strategy should be to train ones own specialists, while remaining open to experience and trying to attract consultants from abroad,» said Neivelt.