Former CEO surprised by move as bank begins takeover of Aval Bank
Months after acquiring one of Ukraine’s top banks, Austria’s Raiffeisen Banking Group has reshuffled top management of its Ukraine operations.
Raiffeisen on Jan. 16 announced the appointment of Aval Bank CEO Volodymyr Lavrenchuk as the CEO of Raiffeisenbank Ukraine. Lavrenchuk, who will oversee the merger of both banks this year, replaces the founder of Raiffeisenbank Ukraine, Ihor Frantskevych, who is puzzled that he was not chosen for the top job.
The changes precede the planned merger of Bank Aval, acquired late last year, with Raiffeisenbank Ukraine, a fast-growing commercial bank operation that the group launched in the country about eight years ago.
Raiffeisen officials say that Lavrenchuk, who will serve as CEO of both banks during the merger process, will later become CEO of the merged bank. The merger is expected to be finalized this year.
Late last year, the Raiffeisen banking group sealed a deal to buy Aval Bank, ranked No. 2 among Ukrainian banks by the Association of Ukrainian Banks according to net assets. Together, both banks control about ten percent share of the Ukrainian banking market’s net assets.
Raiffeisen International, which acquired Bank Aval, operates the group’s subsidiary banking networks in 16 Central and Eastern European markets, serving a total of 9.2 million customers.
In a statement, Raiffeisen International said that Lavrenchuk has an “excellent market reputation,” adding that he has valuable experience by virtue of his tenure at other Ukrainian banks, including a post at the National Bank of Ukraine.
“His fundamental commitment to customer service and his innovative approach to new products and services will have an immediate impact in the organization,” Raiffeisen International CEO Herbert Stepic said in a statement.
“Lavrenchuk is an excellent coach and a natural motivator of staff. We are confident that we will achieve our ambitious goals.”
Lavrenchuk has 24 years of experience in Ukraine’s banking sector, stretching back to Soviet times, when he began his career in 1982 as an economist with the State Bank of the USSR. He previously worked at Oschadbank, Ukraine’s national saving’s bank, and privately owned Ukrinbank. Prior to his promotion, Lavrenchuk served as deputy chairman of Raiffeisenbank Ukraine, in addition to his top post at Aval Bank.
Left out
Franstkevych, who formally leaves Raiffeisenbank Ukraine’s CEO post on April 16 to make room for Lavrenchuk, expressed surprise and confusion about the move.
In a telephone interview with the Post on Jan. 16, Frantskevych said that Raiffeisen’s leadership gave him only two formal reasons for his dismissal, neither of which made much sense.
“First, they said that Lavrenchuk had worked more in retail banking, but when I was the chairman, Raiffeisenbank had been engaged in retail banking and that never stopped me from being the chairman,” said Frantskevych, who was named Ukraine’s No. 1 banker in 2005 by Ukrainian business weekly Investgazeta.
Frantskevych said the second reason for his not being chosen was not clearly formulated, adding that he had expressed his unwillingness to accept a number two position.
“I clearly explained that if I will not be the head of the merged bank, then I will have no desire to work for Raiffeisen,” he said.
Following a banking career that started in 1991 at state-owned Bank Ukraina, an agriculture bank which went bankrupt years ago, Frantskevych also worked at Ukrinbank before establishing the Raiffeisen group’s Ukrainian commercial bank, Raiffeisenbank Ukraine, in 1998.
Frantskevych led Raiffeisenbank Ukraine into a top 10 spot among Ukrainian banks according to net assets.
Frantskevych said that he plans to continue working in Ukraine’s financial market, but declined to provide further details on where he may end up.
