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Global Banking CEOs Strike a Balance Between Capitalism and Care Amid COVID-19

Highlights from the eighth digital gathering of CEOs from the banking world, hosted by Egon Zehnder

Global banking CEOs are working out how to remain socially responsible yet at the same time respond to pressing capitalist demands as they get back to business, they told Egon Zehnder in a recent digital gathering.

While the first wave of COVID-19 is receding, another may be just on the horizon. “The probability of a relapse is very high,” says Jean-Pierre Mustier, CEO of UniCredit.

As a result, Mustier is working hard to ensure that there is enough flexibility in the business to accommodate any further lockdown. “It’s my job to refocus people. We have to remain consistent with our strategy, while retaining optionality, as we don’t know what the future will look like. And our team members need to deliver on a certain number of priorities to give us that optionality.”

Carefully planned return

Meanwhile, Mustier is being “very careful” about bringing his staff back to work – out of 5,000 employees who could return, only 150 are back in the office. Mustier isn’t forcing anybody to return who doesn’t want to. “Some of our competitors with much less remote working capabilities are forcing employees to come back but that’s not what I want to do. If team members don’t want to return, we discuss with them what they want to do, and how.”

To avoid creating pressure on others to return, Mustier too has refrained from coming back to the office. Instead, the CEO feels his time is best spent in branches, meeting with teams, while abiding by social distancing guidelines.

Aside from branch staff, most UniCredit employees are working remotely. This can, however, be tiring, admits Mustier. “You don’t have a break. You work from 8am to midnight every day.” Other CEOs agree that it’s hard to develop and create a bank’s culture and take on new employees while working from home.

Stay at home for now

Other banks have decided to keep their staff out of the office for as long as possible, with no return planned before September at the earliest. Less than 1% of employees will work onsite until then. While pleased to allow the remainder of staff to work remotely, they are also introducing more mental health initiatives to balance any potential long-term side effects of remote working.
 

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During the interim, some CEOs say they are reconfiguring offices and branches to fall in line with social distancing requirements. In addition, they are repositioning staff to those places where they’re most needed.

Meeting targets

While health and safety are of the utmost importance, banks are also under pressure to deliver to shareholders. Bank CEOs are therefore putting their teams under a healthy amount of pressure to set targets and work towards them.

At the same time, CEOs agree that they must also cut costs and restructure. One bank is being open about the need to exit staff while at the same time it strives to meet targets. They are also figuring out ways to give employees the chance to retrain for other internal roles.

Retraining has also taken on greater importance at UniCredit, as Mustier moves branch employees into critical risk and credit monitoring roles. He aims to strike a balance between “being socially responsible on the one side and being a custodian of the business on the other side. When you blend both, team members react positively”.

Ultimately, all banks must “reimagine the purpose” of bank branches, with remote banking and call centers likely to take on greater importance. One CEO reflects that some corporate buildings might never reopen while bank branches may serve different purposes as the bank strategically reconsiders their overall real estate footprint.

Managing risk

As always, banks continue to focus on risk. Mustier has been focused on how to improve efficiency of the credit monitoring process, while dealing with more granular credit and beefing up resources for when the moratorium ends so that the bank is ready to take action.

Finally, UniCredit is planning for its capital market day in February 2021, when it will update the market on its Team 23 strategic plan. “We always take a transparent approach to communications and investor relations and we keep focusing on delivery of concrete measures and taking decisive actions whenever needed,” concludes Mustier.

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