Bank chief sets his sights on engaging foreign markets
Česká spořitelna oversees loans all over the world
Posted: March 20, 2013
As director of Česká spořitelna's debt products group, Havrda says the large variety of activities is inspiring.
There is a whole wide world out there, but statistics indicate Czech exporters often do not look beyond the familiar territory of the European Union.
Last year, 80.8 percent of Czech exports went to other EU countries, a dependence on the bloc's 26 other members that the government would like to see decrease.
The Industry and Trade Ministry's export strategy for 2012-20 aims to help firms find new foreign markets, with a focus on countries such as Brazil, China, India, Iraq and Ukraine.
Among those working with Czech companies that operate abroad is František Havrda, whose role as director of Česká spořitelna's debt products group includes responsibility for export credit. He sat down with The Prague Post to explain what he is trying to achieve.
Name: František Havrda
Current role: Director, debt products group, Česká spořitelna
Previous roles: 2008-11, responsible for private equity business, Česká spořitelna; 2003-08, senior manager, corporate finance, HVB Bank/UniCredit Bank; 1999-2003, senior credit officer, HypoVereinsbank; 1997-99, credit officer, Bank Austria
Education: Ing. in foreign trade, University of Economics, Prague
TPP: Which are the key non-EU markets Czech companies are looking at?
FH: We have a lot of deals in the pipeline in the former Soviet countries of Azerbaijan, Kazakhstan, Belarus and Ukraine, and definitely Russia, so there's a lot of potential. But we are working with deals also in India, Vietnam and China. Currently, we're discussing a deal in Gabon, too. Last year, we had one deal with Mexico. We are open regarding territory. The only assumption is that we have a good customer with a good product. A lot of projects are currently in Belarus, but from a political point of view, the situation is not so stable … We need certain stability for the business.
TPP: What sectors are these projects in?
FH: In Mexico, it was a deal for specific parts in mining systems. In Azerbaijan, we supported a customer who participated in the construction of the highway. The deal we're discussing in Serbia was the reconstruction of a refinery. The deal in Africa was the construction of a hospital. In Pakistan, it was the renewable energy sector. In Russia, we have a lot of opportunities connected to transportation.
TPP: Are there countries that are too risky for you to become involved in?
FH: Maybe Syria. I'm not going to mention the concrete countries, but it's more about the group strategy, where we have some negative experience.
TPP: What are the potential pitfalls in markets further afield?
FH: The challenges of the foreign markets are connected to the legal and economic environment. It's not easy to come to the foreign country and look for financing, for banks. Usually, the customers prefer to have their current bank help them secure the financing, not only in the Czech Republic, but also in the foreign market. That's why we're very often in contact with some partner banks in the territories.
TPP: How can you ensure deals in high-risk countries prove successful?
FH: We have a lot of deals connected to infrastructure. Government bodies are usually involved. In such cases, we see clear support as the project is of key importance for the country, and we think the probability of a default is much, much lower. Sometimes it's a key decision of the government to invest in that area, and it's part of some transterritorial strategy.
TPP: The Czech government wants more small and midsize enterprises to export. Is it particularly difficult for these firms to operate overseas?
FH: For the big companies, it's fine. They usually have branches that can keep people there, but for the smaller companies, it's not so easy. You can offer them support where you can finance the pre-export phase. We have a specific program with Czech Export Bank … on how to finance the preparation phase for the exporter. If there's a contract in place, if we see a feasible structure, we can draw financing for the preparation phase with CEB very quickly.
TPP: Given that Czech banks tend not to have a problem with liquidity, is it relatively easy for companies here to secure finance for overseas projects?
FH: It's a story about the risk profile. The liquidity situation principally doesn't affect our appetite for lending. We have a loan-to-deposit ratio of less than 70 percent so we haven't had a problem with liquidity for the last 10 or 20 years. If there's a good project with a good risk profile and we have got a good calculation of the profit, usually we're ready to support it. On the other hand, we are thinking more and more about the portfolio and what areas we would like to have more or less exposure in.
TPP: It sounds like a very demanding area to manage. What are the plus sides of the job?
FH: What I enjoy with this job is the creativity and the variety. We are involved in a lot of interests. We can think about the steel industry. The next day, we're considering a deal in mining. The day after, we're talking about food and beverage, the construction of a new brewery. This is what I like. The next thing is that all the deals we're talking about, especially in export, are tailor-made. There's no standard product. The disadvantage is that it takes a lot of time. It usually takes six months, maybe even a year to prepare it and have it ready for execution.
TPP: Do you get to travel often to the countries you are arranging deals with?
FH: It's nice to travel to Mexico, but we have to think about it reasonably. Usually, we're working with industrial advisers who are able to deliver local expertise and the information we need onsite. I am also responsible for other businesses. The best people we have in this area are spending one-third of their time traveling across the countries and discussing the opportunities in different countries with the partners abroad.
Daniel Bardsley can be reached at