The Chairman of APS Bank, Martin Scicluna, has enjoyed a long, successful career in banking and financial services. Here he talks about company culture, the importance of values which matter, and responsible growth strategies, as he leads the Bank and its dedicated team, towards its first initial public offering.
How would you define APS Bank’s culture, and how critical is culture to the strength and leadership of the company?
It is widely accepted that culture is defined as ‘How you behave when no one is looking.’ The Bank’s culture is based on a sense of collegiality, with a focus on serving the community. Our corporate values are embodied through five tenets of excellence, authenticity, passion, inclusiveness and being contemporary, and they are communicated and entrenched in how we behave. We draw on market research and employee engagement surveys to shape internal communication and select the training we offer our employees. This in turn enables us to better understand our customers and employees.
Despite a pandemic and now the conflict in Ukraine, APS Bank recently announced a pre-tax profit of €24.1 million, for 2021, an increase of 52.5 per cent over 2020 results. What measures did the Bank implement to enable this growth?
Several components led to this success, but I’ll focus on three which begin with the Board. Firstly, strategy and strategic thinking which are at the heart of planning, from business plans to service level training. Strategic plans are drawn up every three years, approved by the Board of Directors and subsequently fine-tuned annually. Having said that, as late as November 2019, nobody foresaw the devastating and global impact of COVID-19, so an element of flexibility and the ability to adopt an agile mindset in response to change is critical.
Understanding the environment is the second component, and there are several aspects to this, not least, customers, regulators, other stakeholders, and the bigger economic picture, and more specifically, understanding our customer needs. In the commercial banking arena, we have an intimate understanding of our borrowing customers’ affairs, which enables us to meet their business needs, and provide the support, an economy requires to fuel growth. Similarly, in the personal banking arena, given the significant hardship that the pandemic created, the Bank went the extra mile to protect our employees and our customers, and to ensure that our branches were open for business practically to the level of pre-pandemic service levels.
Finally, the business of banking requires competence in banking and leadership skills, and I feel pride in the knowledge that the Bank’s teams are second to none in qualifications, competence, training, and leadership.
As the Board’s role continues to evolve in an increasingly regulatory and technologically enabled world, board composition – the ‘right’ number of board members with appropriately diverse skills and experience – is essential. How does the present Board reflect this?
The Board of Directors is made up of complementary skill sets that are a must in meeting all the demands expected of the Bank in regulation, conduct, knowledge, skills, and experience. Banking knowledge, entrepreneurial thought, cyber and technology skills, legal, accounting and auditing, international exposure, and macro-economic competence are all essential ingredients for an effective board. Diversity in all its variants is a journey that the Bank has already embarked upon but let’s be clear, diversity is not just about race or gender, but also about the richness of the Board as a whole and the combined contribution of a group of people with different skills and perspectives to offer. People with different experiences, backgrounds, and lifestyles, who together are more able to consider issues in a rounded, holistic way and offer an attention to detail, using specific skill sets that will provide synergistic outcomes.
APS Bank continues to build on its position as the leading community bank for everyone, committed to its communities and addressing societal needs. How has the Bank remained relevant and sensitive to societal and digital changes? Do you feel it is a responsibility for leading organisations to be a force for good in society and to focus on more than just the bottom line?
APS Bank has always looked beyond simply making profits, investing in people continuously. The Bank was set up in 1910 to service the community and all stakeholders, not just shareholders. Those fundamental principles remain the same.
Despite our raison d’etre as a business, we are market leaders in terms of providing various sources of finance for individuals who do not meet the standard criteria for financial stamina. To that end, we have successfully partnered with both government and non-governmental organisations to provide financial services to deserving individuals, mostly in the home loan area.
As a bank, we must also remain relevant in how we deliver service to our customers, always bearing in mind our community responsibilities. Therefore, we strive to provide customers with different channels of interaction, enhancing our branch-based face to face service with internet-based services, including mobile banking. When the pandemic started, we were already in a strong position digitally, and we are already looking at investing and preparing for further developments.
In 2019, more than 180 of the largest US-based companies released a new Statement on the Purpose of a Corporation. This was proposed by the US Business Roundtable to introduce the new principle to “promote an economy for all citizens”, in other words, to lead companies for the benefit of all stakeholders, customers, employees, suppliers, communities and shareholders. This is a principle that is inbuilt into APS Bank’s DNA.
What’s next for APS Bank and how will you ensure that the Bank will continue to deliver growth?
June 3, 2022 will see the fruition of a five-year plan as APS Bank goes public. A strategic move which will widen our shareholder base and enhance capital strength. Internally, we will continue to work at understanding and anticipating customer behaviour and investing in our employees, to ensure that we all stay attuned to society and its needs. We will also continue to play our part as an integral component of the country’s social fabric, contributing to ESG thinking and awareness, via our CSR programme and our socially-conscience driven products, supporting business and industry, and providing retail customers with value-adding products. Our focus has always been, and will continue to be, on people. Whether we’re focussing on employees, customers, shareholders, or society at large, it is people who will continue to be the driving force of our competitive advantage. Ultimately, we will continue to be guided by the highest principles of ethical behaviour, robust governance and transparency, and sustainable growth.
Martin Scicluna was elected as Director to the APS Bank Board in November 2013 and appointed to the Chair in September 2021. Since 2012, he has held directorships in asset management and insurance companies licensed in Malta. He held several managerial positions in Mid-Med Bank, following which he joined Midland Bank plc which later became HSBC Bank Malta plc. From 2006 to 2012, he served on several boards for HSBC Malta regulated subsidiaries and on its Audit Committee. He is an Associate of the Chartered Institute of Bankers, holds a Diploma in Financial Studies and was elected a Fellow of the Institute of Financial Services in 1999. He also sits on other boards as Chairman, Accredited Insurance (Europe) Ltd, independent non-executive director at Merck Capital Asset Management Ltd, and at Thybo Malta Ltd. He has also been actively engaged in various areas of voluntary work, including scouting, preservation of the built and natural environment and financial services education, serving on the boards of Administration of NGOs such as Din l-Art Helwa, and the HSBC Malta Foundation.
APS Bank plc is regulated by the Malta Financial Services Authority as a Credit Institution under the Banking Act 1994 and to carry out Investment Services activities under the Investment Services Act 1994. The Bank is also registered as a Tied Insurance Intermediary under the Insurance Distribution Act 2018.
The views and opinions expressed in this interview are those of the author and do not necessarily reflect the official policy or position of APS Bank plc.