Jack Stack - an American at the helm of one of the Czech Republic's biggest banks

19-06-2006

As chairman and CEO of Ceska Sporitelna bank, Jack Stack is one of the best known foreign businessmen in the Czech Republic. As well as being personally popular, he is also admired for having turned around the bank's fortunes; when he took the helm at the turn of the decade it was deeply in the red - today it is making billions of crowns in profits. When I met Mr Stack at his Prague 4 office, I asked him what the secret of his success at Ceska Sporitelna was.

"I think the secret of the success has been energising the people of Ceska Sporitelna into both adopting the right direction, the right strategies, and becoming much more professional in the banking business.

"I was able to use my 22 years of experience in the United States, but more than banking knowledge it was getting the Ceska Sporitelna folks to believe in themselves, and to believe and work very, very hard to change Ceska Sporitelna, which was a failing bank, into a modern financial services provider."

In general, how does doing business here compare to doing business in the States?

"I think banking is very, very similar, whether it's in the Unites States, the UK, Australia, New Zealand. I think dealing with businesses, dealing with corporations, is 100 percent the same in the Czech Republic and other places - the corporations here are very modern.

"I think on the retail side, dealing with consumers, it's about 75 percent the same as any place in the world, and 25 percent is local - you have to adapt to the local environment, you have to start to understand how people look at financial services.

"I think the consumers in particular in the Czech Republic are not as financially sophisticated and haven't purchased as many products as the typical American or EU consumer has. But that's changing rapidly, and the Czech consumer is becoming more familiar with financial products."

Would you say Czechs went straight from cash to credit cards, without anything in between? Like cheques for example.

"Well, I'm glad we don't have cheques in the Czech Republic (laughs). We went straight from cash to electronic payments...in general the Czech consumer, which everybody is concerned about, is relatively conservative in their borrowing practices. When we look at lending to the Czech consumer versus lending to Americans, Americans have borrowed a lot already and want to borrow more.

"The typical Czech consumer hasn't borrowed anything before, is a first-time borrower and is just getting used to idea of, I can borrow money to help me buy a home, I can borrow money to help me furnish a home. And I think is acting very responsibly.

"I don't think it's moved from cash to credit cards and a free lifestyle, a hedonist lifestyle of borrowing and never paying back - I haven't seen that at all."

Generally speaking the Czech economy is doing very well. Every week, every month we read the latest good figures - what do you think the Czechs need to do to maintain that healthy economy, and to keep going in the right direction?

"I think it's very important that the government addresses deficit spending, pension reform, investment in education and investment in health-care. We need to address those, because if we don't address those they will be a drag on the future economy.

"I believe that the SME [small and medium-sized enterprises] sector and unemployment coming down, GNP [gross national product] growing, foreign direct investment, the overall legal structure is in place, and accession to the EU has been a great benefit with regard to exporters...we're living in pretty good times now, though it hasn't affected all segments of the population.

"As you look out over the next five years, unless we go after pension reform and health-care and deficit spending - deficit spending really must be addressed - and education, it's going to hurt us. And if you don't address it during good times it's much harder to address it when there's a cyclical possible downturn."

About your own personal experience, did you find any kind of cultural barriers when you came to work here, in terms of getting on with your colleagues or subordinates?

"I don't know if it was a cultural barrier, but I am not good at languages, so that was a real hindrance, as I struggled with the language. Also it took adapting on my part and my family's part, with regard to how to adjust to the way things are done in the Czech Republic.

"I mean it's everything from...in America we don't assign seating at the movies, whereas you go to the kino here and it's assigned seating, to where's the dry cleaner, to dressing much more formally here - the first time I went to a concert at the Rudolfinum I had a sports jacket and an open-necked shirt on, and that was clearly not the thing to do. Now whenever I go to an event, whatever it says I try to dress even more formally than it says, because I know it's much more formal here."

Do you enjoy living here in Prague, you and your family?

"When we first moved from New York - I was born in New York and raised in New York, so I'm one of those people who has spent all their lives in New York - and I came here, when I would leave New York I would say to my daughter, I'm going to Prague; that was 1999 and 2000. Now when I leave New York and I say goodbye to my daughter I say I'm going home.

"Both my wife and I have grown to love both the Czech Republic and living in Prague, and have really...in a sense for folks who have only lived in America, and have now lived in Europe for six years, you look at the world a little bit differently, you understand more where other people are coming from.

"And to be here in Prague over the last six years with the economic advances that have taken place, and EU accession, it's been a very exciting time period to be here."

Are there any particular events or things that happened in that period that stand out?

"I think EU accession in particular, for a banker, was a very big deal, because the EU helped the Czech Republic put in place the structures that were necessary for the economic growth that we're now experiencing. And we wouldn't be experiencing this economic growth without EU membership and putting in place the structures.

"The other thing that kind of stands out is I'm a big lover of Prague Spring, and I've actually seen Prague Spring and the international music festival develop, along with Smetana's Litomysl, so I kind of have a great...event, in the sense that each May it comes and it gets better and better each May. So those are some of the things that stand out."

But still you're planning to leave Prague next year I believe.

"That's right. Next summer, a year from now, we're planning to move back to New York. I think it's two factors - one factor clearly is I'll have been in this job seven years at that point. It's time for a change, it's time for somebody else to come in with a lot of energy to energise the troops.

"And two - next year I'll be 61 and it's a little bit time to go to New York, which is my home town, and reacquaint myself, I need to reacquaint myself with New York."

19-06-2006

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