Corona and no end - What does this actually mean for banks? How do financial institutions currently assess the competitiveness of their customers? How meaningful are profit and loss statements (P&L) after the numerous liquidity aids provided by the German government? How does Rita Herbers, member of the board of Hamburger Volksbank, experience the Corona pandemic and how did she become the first female board member in the 160-year history of Hamburger Volksbank?
Rita Herbers, Member of the Board of Hamburger Volksbank, and our Managing Partner Uwe Köstens talk about this in the enomyc Podcast.
Welcome, Ms. Herbers. I'm very pleased that you're here and that you've made yourself available for this interview – at a time when personal contacts have just had to be significantly reduced again.
We have known each other for almost 20 years now. A lot has happened to both of us since then. But let's talk about you and your career: Training at the Sparkasse in Emsland, then ten years at the Sparkasse in Osnabrück, 20 years at Dresdner Bank / Commerzbank – that's where we met. You held various positions, first at Dresdner Bank and later at Commerzbank. Most recently, which was certainly the most exciting time, in New York. Have I left anything out?
No, that’s about it.
That sounds like a very structured development, in which corporate customer business was always center stage. In view of this background, your appointment to the Management Board was almost inevitable. How did it come about?
I don't think there is one way to become a board member. I built on the many years I spent in corporate banking, because I still believe that a specialist focus is needed. Then I worked at the head office, first as a division manager and then as a department manager. For me, that extremely broadened my view, dealing with strategic and project-related issues. And I have been abroad, too. It was not so much the knowledge that I acquired there. It was primarily a unique life experience that rounded me off as a person.
The combination of these professional stations, but also having a network, and of course talking to the one or other headhunter. After all, it was a headhunter who ultimately brought me to Hamburger Volksbank, where I became a member of the Board of Management.
So in summary: There was not this one decisive step, but the sum of experiences you were allowed to gather that almost inevitably led you on this path.
Inevitably, that does not happen. I think that is also part of the truth. I worked at Commerzbank / Dresdner Bank for 20 years. That's a long time. And if you then consider taking another step, it has to be a decision for something. For me it was the combination of sales, because I'm responsible for the market at Hamburger Volksbank, and strategy, i.e. staffing projects. There are not so many tasks where you can combine both. That's why I wanted to do this, and it was also in my favorite city, Hamburg, where a lot of things go well together.
I'm very pleased about that. We've known each other for a long time, so I've been able to follow your career. I think a key point in your professional development was that you were also prepared to change locations again and again. From Emsland to Osnabrück, from Osnabrück to Hamburg, from Hamburg to Frankfurt, from Frankfurt to New York and then again from New York via Münster to Hamburg.
That's quite an impressive journey you've embarked on, and it's always accompanied by a willingness to break new ground. Is that something you recommend to others?
Of course, everyone has to decide that for themselves. It is always a professional step and also a personal change. You've described it beautifully. I didn't always move completely, though. In some functions, I simply commuted. I never really lived in Frankfurt. In my Frankfurt years, which were five and a half years, I always had my home base somewhere else. Where I wanted to live.
In that respect, there weren't quite so many stations, which had a lot of advantages overall. You simply become much more open, much more courageous. And at the very least, when you're abroad and start from scratch somewhere and don't have the network you have in Germany, then you know you can solve virtually any issue. On the other hand, it also means leaving your comfort zone again and again. You have to be ready for that. If you change spatially in addition, that's quite a different thing than if you simply go to another office the next day.
I can understand that very well. For us in the consulting industry, flexibility, especially spatial flexibility, is essential. If you'd asked me 30 years ago, I couldn't have imagined being somewhere else three or four days a week. In the meantime, I enjoy it so much that I even miss it a bit at the moment, in these challenging times. We'll come back to that in a moment.
What advice would you give to young women in the financial sector who want to become managers?
One thing is: Be brave! When a divisional executive once asked me to take on a task, I actually replied, "But I can't do that." He just said, "Now take it easy and sleep on it for a night." I slept on it for a night and had an exchange with the predecessor in the evening. The next morning I went to the office and replied with conviction, "Yup, I'll do it." A typical female reaction that you see relatively rarely in men.
So one thing you definitely need is courage and curiosity. And, networking is also part of that requirement. Network within your industry, outside your industry, and don’t forget, and I've always done this, to seek contact with more experienced people. That could be a mentor, formal mentoring or even informal mentoring. Just to get the sense of which way it is going. For me, success essentially thrives from exchange with others.
Yes, I can well understand that. Last year, in the middle of the Corona year, you took up your post as a board member at Hamburger Volksbank. That was certainly very special with the rules and regulations that had to be observed.
That was very special indeed. In fact, I resigned after 20 years in my old role, a week before the first lockdown in Germany. I also left for new shores in the middle of a pandemic.
That's right. So that was the first step. When I started at Hamburger Volksbank last summer, we all still thought it would work out somehow. But the second lockdown followed in October/November. That's when I was actually working at home for part of the time. We are a three-person board. One of us was always in the office and the other two worked from home.
I'm a salesperson through and through, and what I really enjoy in my work is being able to connect with people. Be it our members or customers, or the staff, that's what it thrives on for me. Of course, that's very special when you're working from home and having one video conference after another. You have contact there, too, but establishing personal contact is extremely challenging via video call. It's only partially successful.
We both "saw each other again" for the first time via a video conference when I was back in Hamburg. Then we met in person in the summer, simply because that kind of contact is completely different. Of course, the period of limited contact also gave me the opportunity to look after Hamburger Volksbank more intensively internally, especially since any events were cancelled. So, if you want to find something positive about the situation, it was precisely the time when I was able to take more care of internal things. In the summer, I was all the more pleased to see customers again, to see employees – and maintain personal contact. Now, it looks as if we’re heading for home office again.
The incidences are rising dramatically. There is no end in sight. We also assume that we will have to work from home again. From a safety point of view, that's right, but it's not the way to make it look good. I felt the same way as you. I'm a customer-oriented person who likes to be outside. If I don't have that personal contact, I'm missing something. In this respect, we have to be strong again over the next few months so that we can still have fun.
As a bank, how are you dealing with the Corona situation, which is coming to a head again?
First and foremost, we are concerned with finding a good balance between protecting our employees and protecting our customers. At the same time, we want to ensure a good working atmosphere and productivity. We're rehearsed now, just like everyone else. We just got an email from the crisis team this morning saying we are reopening the home office issue. Today, the official decision is expected and I assume that there will also be a home office requirement again.
We will then allow our employees to work from home up to five days a week. That's the inside view. The employees working at the office will have sufficient distance, ventilation and everything that goes with it in terms of regular testing and masks. I think without being allowed to ask that as an employer, we also have a very high vaccination rate. However, that does not afford complete protection. We ask all employees to get tested every other day so that we can at least take the action we can take.
The other thing is how we deal with customer contact. We have had many personal customer contacts in recent weeks. That's always a question of how customers react. Do they want to see us or do they prefer video conferences and telephone calls in the current situation? That's where we adjust to the customers.
So again, a new challenge and this time the incidence is even higher than ever before. We, too, have had our experience. As consultants, we are always faced with the question: How do we introduce ourselves to the customer? By video conference or in person? We also often have to be on site, because it's essential when we're doing production consulting or the like. You have to be able to stand at the machine and talk directly to the employees.
Without using a crystal ball, how do you see future developments in Germany over the next few months?
This will be an exciting time. A time that we have not known for a long time. In recent weeks, we have already experienced a sudden shortage of important raw materials. We don't really know this shortage anymore. We're seeing it now: anyone who has ordered a new car knows what it means when raw materials or a chip are missing. The bottleneck in the supply chain is a major concern for our traditional corporate customers. We communicate closely with our customers to find out what they are doing about it. What do the customers need from us now? How do they solve the situation? That's the one side.
The other side is that traditionally, we as Hamburger Volksbank have – and here, too, we are in good company – been very real estate-heavy. And there have also been developments on the real estate market that were not entirely foreseeable in this way. The development of real estate prices in Hamburg and the surrounding area alone – it's sensational how prices have gone up. And of course, there too, we are seeing construction delays due to a lack of raw materials such as wood. In cases like this, we approach customers individually, talk to them and look for solutions. The goal is to get through this winter together, with the hope that things will get better again in the spring.
This means that we should now take another closer look at whether things are going as planned or whether there are exceptional situations to which we have to react as customers and as a bank, because we would not want to have a higher risk. It's a fine line and an art to deal with it.
Exactly. Let me put it this way: The state aid in the first wave, the Corona aid - whether it was grants or exemption from liability for loans - all of this has been extremely helpful. This has also helped to maintain the real economy. I don't know whether programs will or must be launched again now.
What we see now in retrospect is that not all the funds have been used. I still very well remember the first lockdown, when we looked at business plans together with the customers and asked ourselves what would happen if no sales came in for half a year. What does that mean in terms of costs? So now, we have to take a measured approach again. Of course, as you mentioned, keeping an eye on the credit risk is always part of the process, i.e. making decisions under uncertainty.
If necessary, that's what we're there for as enomyc. To recognize the risks, identify them, counter them and do everything possible to prevent them from becoming life-threatening. It will be a very special time again, let's not kid ourselves. In that respect, I think some of the aid programs, such as the short-time working allowance, will be extended. I am convinced that this will be the case. The liquidity assistance programs, such as quick loans, are still running. Bridging aid III has already expired. In any case, this was a new phenomenon in the situation that state earnings aid was granted to companies. That has an impact on the income statement.
In our view, this blurs the assessability of a business model when sales are compensated for or generated or fixed costs are reimbursed by public funds. That has little to do with competitiveness, hasn’t it?
Yes, this is also a challenge for us as banks. There are business models where you can say quite clearly that they were Corona beneficiaries. And there are business models that are actually reduced to absurdity since Corona. But then, of course, there is also the gray area. So how do you judge a business model? Can it be assessed after Corona or with Corona in the same way as before? And you've already said the same thing: In some areas it has had an impact on the income statement, which was probably partly a one-off effect. We have to assess the sustainability of this.
This will also be a major challenge for us as a bank, because there is, of course, no template for this. We have not yet experienced a situation like this – at least not in my professional career. I have been through many crises, the financial market crisis, the Neuer Markt and others. I have experienced everything. But they were always crises of a different kind. At the moment, and this applies to the entire German banking industry, the banks' risk has remained manageable. But now there will probably be another push. And that's why we need to take another close look. I am completely with you on that.
According to my current assessment – i.e. in addition to the Corona-related problems that have arisen and which have also landed in the P&Ls – special factors such as the chip shortage are now being added, which are also flying in like ricochets. For the automotive supply industry, it is now normal when call-offs are reduced by 40 percent; next up for us is the magnesium shortage. The raw material price increase, you mentioned it. Currently, we have the case that a client is very gas-heavy in energy supply and feed-in. Prices have increased by 500 percent for them. This can no longer be passed on. In that respect, this is a real crisis accelerator with special issues that are now exacerbating the Corona problem.
One last question: Diversity, women in management positions, equal pay – are you involved in this issue? Perhaps even publicly in associations, interest groups or the like?
I am not publicly engaged. Nevertheless, I am always willing to listen if someone wants my advice. There’s no question about it. There is a fine line here, too.
I thought the campaign, I think the Stern magazine did it, with Ms. Furtwängler and some others, was very good. The statement was, "I am a token woman." It was very provocative. Ten years ago, if women had said, "I'm a quota woman", people would have asked, "What's going on now? That wasn't at all common. That makes this campaign all the more appealing to me. Women who are supposedly professionally successful say they are token women, even though they wouldn't need to be. In the end, I think it's important to remain a woman, to pass on advice without getting overly involved. Of course, I support young managers, whether male or female. Anyone who wants to pursue a specialist career.
It will probably be a while before we're completely off the subject – and I've really been in the profession for a long time. As you said, the issue of women in management positions always comes in waves. Sometimes it's very important, then it's not so important for a while. We are a three-member board, two men and one woman. This team has very different perspectives on issues, and I find that extremely enriching. In that respect, I'm always happy to see mixed teams.
What is it like on the Supervisory Board?
We have one-third women on the Supervisory Board. Hamburger Volksbank started this very early on and set it as a goal long before I came along. We want women on the Supervisory Board. And in fact, we also appointed a new female Supervisory Board member this year. A female Supervisory Board member left and we deliberately looked for a woman again and found a very good Supervisory Board member.
You are a shining example for others and it is a pleasure to follow in your footsteps. In that respect, it's also a nice tie-off for us.
Thank you very much for being here, for giving us the opportunity to chat about this and that. About current events, but also about topics such as women in leadership positions. This is something that will continue to occupy us in the future, and rightly so, because there are still many, many opportunities for us as a company and as a society.
I wish you all the best, dear Ms. Herbers. Stay healthy and see you again next time.