Wüstenrot stavební sporiteľňa has announced that it will not provide new loans or savings between loans. It expands its offer with mortgages, savings deposits, capital market products from renowned financial market players. “The trend towards merging services will not be avoided in Slovakia either,” says Marian Hrotka, chairman of Wüstenrot’s board of directors in Slovakia
Wüstenrot announced that it would stop providing new savings and loans. Does this mean that the construction society is over?
The construction company is not over, we have a large portfolio of customers who save us or take out a loan. As a result, we will continue to offer a full service. We have decided to expand our presence in the financial market. Abandoning the concept of construction society is the first step. Classic savings boxes have their tablecloths, which no longer allow for greater growth. Therefore, we want to transform our offer and offer our clients comprehensive services from other agents of the Slovak financial market. From loans, deposits, through the capital market to the widest range of savings products. Therefore, we are not talking about any purpose, on the contrary, we are talking about a new chapter in Wüstenrot’s operation in the Slovak financial market.
Will the change affect customers who have insurance in Wüstenrot?
The new strategy does not apply to the insurance company or its customers. In the case of the insurance company, Wüstenrot plans to strengthen its position in the Slovak market. We are innovating in our products, which is already reflected in the double-digit increase in new production this year. We are convinced that Wüstenrot poisťovňa has the capacity and space of the Slovak market to grow, reach new customers and achieve even better results.
On the one hand, you are talking about expanding the offer, while in practice, you have the opportunity to conclude savings with you, for example. Isn’t that a bit contradictory?
Today, the very concept of a construction society for new expansion is more than limiting. Saving construction has simply exhausted its growth potential. Real estate companies finance their loan portfolio mainly through savings contracts in buildings. While this model acts as a stabilizing factor of the financial ecosystem and provides security to the customer even in times of turmoil in the financial market, construction companies are striving to achieve a shorter end compared to the competition. Classic bank houses can be refinanced significantly cheaper in a market characterized by zero or negative interest rates. The gradual dismantling of legislative support for the construction of savings in the attractiveness of construction companies also did not add anything. Only the end of the sale of new products of the construction company frees us to continue growing in the Slovak market. Currently, the savings bank can only provide savings on buildings, regardless of whether it is the most advantageous solution for the customer. Therefore, we want to expand our offer. Offer customers the most advantageous financial solutions on the market.
What do they bring out for the shorter end?
For example, today traditional bank houses can offer significantly cheaper housing refinancing. With zero or even negative interest rates, a construction loan cannot be a competitive alternative. As for the savings themselves, the gradual dismantling of state aid has naturally been reflected in its advantage. In the past, the state has addressed the housing issue by directly supporting savers. Today, the support is quite symbolic, the conditions are more complicated.
However, your customers may perceive it as leaving the market.
I can rule it out right away. We have created a new company called Wüstenrot InHouse Broker, whose main activity will be the financial mediation of the most advantageous and “tailor-made” solutions for customers. We are strengthening our position in the insurance industry. Only in the first months of this year we recorded an increase in life insurance by tens of percent. If Wüstenrot wants to leave the Slovak market, he is not preparing any expansionary strategy. On the contrary, it leaves everything as it is.
Do you plan to make changes to the insurance company?
Although we no longer see room for growth in savings in buildings, we see a great opportunity in the Slovak insurance sector. During this period, we innovate various types of insurance in order to further increase our attractiveness to the customer. Our ambition to abandon the concept of construction society and to mediate, for example, with classic mortgages, may even strengthen the position of the insurance company. In one place, the client can arrange the most advantageous home financing possible and, at the same time, take out insurance or other necessary services and products. Nor will the tendency to merge services in one place in Slovakia be avoided.
But why would a client have to go to a Wüstenrot office to arrange a mortgage?
Because Wüstenrot is one of the oldest financial groups in the Slovak market. We have been part of the Slovak financial market slowly since the creation of the Slovak Republic. We lived with our clients the good and bad moments of the Slovak economy. Therefore, we know the Slovak market very well, we know our customers’ expectations very well, we have a rich experience for many years and the background of a stable Austrian banking group. This is simply the capital that the client will find in our office.
Still, you are moving into a new market segment that is already busy.
I can only repeat that Wüstenrot is not a newcomer. We have a stable capital position, long-term positive economic results and sales representation throughout Slovakia. We are based on proven foundations. In the financial world, a long tradition, stability and general knowledge of the company is a great advantage. Now we want to take advantage of it and advance our opportunities and the possibilities of our customers.
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