Mathew Mateev, Chairman of the Managing Board, Executive Director of First Investment Bank, before "Pari" weekly

Interview taken by Nayden Nedyalkov

Mr. Mateev, there were so mane insinuations and talks from the specialists lately. As a person with such an extensive experience, how do you really see our banking system condition? 

It is perfect for the environment it operates in. There was in Bulgaria, there is and there will be a place which is stable, secure and well-balanced. And as partial as it may sound, our banking system has all the characteristics of such place. Our financial – credit system is the country’s most stable organism. The banks in Bulgaria have been through everything and passed through any and all stages, from acquisitions, mergers, to restructuring and many more. All such processes were only developing and improving the Bulgarian banking system. The result achieved is quite outstanding to raise any doubts anywhere.  

Then what is the problem?

The system is stable and sustainable, but the expectations are unrealistic. The financial – credit system is an element servicing the public. And the public by its nature demands security and the banking system is a very important element providing such security. The system is a place where the human relations inter-relate. The money is the material expression and substance of the human relations. The cash movements represent only and solely human relations regardless of the form thereof. We communicate among ourselves also through the money. The money is our indirect language. The money is like music, and the banks represent the places where the music is played. The better the acoustics the better the person listening to the music at the moment feels. However very often the expectations in Bulgaria are inadequate to the environment or otherwise said - the environment fetishes its needs, and when a need turns into a fetish, then the connection between the environment and the expectations to the financial – credit system is disrupted.  

How do you explain then the assets’ drop in the banking system?

That is simply a technical movement. I haven’t seen yet assets’ shocking drop. If we take a look at the Bulgarian National Bank’s statistics we see that all balance sheet numbers are in increase. We should more elaborately review the elements of the "assets" side of the balance sheet in order to find where the drop is located, if such exists at all. Moreover the only true indicator for me is annually based. The fact that for a particular month or quarter you have failed to reach the growth rate you had had during the previous equivalent period means nothing. Each and any business has a strategy for achievement of its goals, adjusting itself to the challenges of a constantly changing environment. It is a normal thing to foresee that the credit activity that was pumping up the huge asset growth will slow. Simply the current moment is not adequate for maintaining such growth rates as we had at the beginning of the year. 

What are the reasons for that?

In a toxic environment such as the current one it is not healthy to maintain such large growth rates. Moreover the Bulgarian National Bank is an institution acting quite correctly and entirely adequately to the environment and the perspectives it faces. It clearly demonstrated that the credit policy we pursued was inadequate to the future expectations. The First Investment Bank has always pursued a well-balanced policy regarding its growth rates. Each bank pursues a set policy and has clearly defined goals. Regardless how similar our banks look from the outside, they are radically different internally. The genesis of each bank, its structure and last, but not least its goals are different. The managing body’s point of view causes the so called bank specialization. There were banks focused mostly on expansion of its market share. That is the normal policy for a company entering a new market. However when multiple such players appear, competing for establishment of certain market position, a problem emerges. Although the situation in Bulgaria was different.     

How so?

Our market is not too congested, there is enough space for development of all of the players. Bulgaria has a limited environment, but it is expanding. Both the older and the newer player are competing not only for keeping their already established share, but also for conquering new positions in different market segments. And in case of existence of new horizons the way to enter and prevail there is to offer a new innovative product. Because if you fail to do so the old and well established players will swallow you. Within such meaning the competition fight in Bulgaria was not an elbow fight, but rather through searching opportunities for fast entering and establishment at new and available territories. If you have rational and clear-sighted vision and thinking and you have established a good working internal environment, a moment comes when you start looking around and see how the land lies, whether the other players have achieved the same good result as you have. And if it turns out that they have failed to do so, the acoustics shall be disrupted. Thus you shall not witness and feel the beauty of the music.

What did happen, what did approve the acoustics in the system?

The Bulgarian National Bank was absolutely right in pursuing a counter policy to the one pursued by the banks in the country. Because if we just picture that the banks are as a tractor ploughing and sowing at really large fields, it may turn out that at certain time there may be nothing to be harvested. But the temptation not to make money, rather to prove yourself, is a human trait. The problem is that the people have a tendency to forget quickly. The real banking in Bulgaria started before three - four years. That is when the growth commenced. Just 15 years ago there was a boom of the coupon system. The people were lining up for almost everything. During this period the communication was through coupons rather than money. How do you expect such people to understand the nature of the credit and deposit? Our mission was one of great importance, namely to educate the people. It is really hard to be raised in the spirit of the coupon system, then to survive multiple pyramidal financial structures and at a certain moment, when you are offered an apartment, while for years you have lived in a dug-out, to have adequate expectations. The connection is disrupted exactly because the understanding of the banking essence is missing. That is why environment and expectations miss each other. First Investment Bank endeavors through the use of particular means to reduce such misbalance and to drive it within acceptable framework. 

In your opinion which is the biggest problem facing our banking system?

The people’s psychology. They continue to look at the bank as something scary. Our goal is to transfer our internal security and belief to the ordinary people. We strive to make them feel welcome when entering the bank branch, to feel comfortably and safe as if sitting down in front the fireplace in their own homes with a glass of good wine in hand.