Yet another Smooth Bank Integration with the support of MINDSPIRE Consulting
MINDSPIRE Consulting has facilitated another legal and technical merger of its long-standing client – OTP Bank Group, the leading regional financial institution.
On 27th February 2019, a Sales and Purchase Agreement (SPA) was signed between OTP Bank and Société Générale, starting the preparation for the integration of Société Générale Banka Montenegro.
The closing of the transaction was on 16th July 2019, when CKB has initiated „INTEGRATION PROJECT TARA“, pursuing OTP Group’s strategic goal to increase market share in the countries of operation and as a result of the acquisition.
After the closing Societe Generale banka Montenegro changed its name into Podgorička banka member of OTP Bank Group under which it operated until its full integration with CKB.
About CKB
Crnogorska Komercijalna Banka and Podgorička banka have successfully completed one of the most complex integration projects on the Montenegrin financial market. The integrated bank continues to operate under the name Crnogorska komercijalna banka AD Podgorica, member of the OTP group (CKB) and remains the leading bank in the country with the largest loan and deposit portfolio, and the largest number of clients.
The Project scope envisioned to achieve full legal and business integration of CKB and Podgorička Banka; and to deliver a functional integrated organization with 28.3% market share (largest by size of total assets on the Montenegrin banking sector) along with the realization of significant business synergies after the merger. Integration process was performed by aligning the business principles, strategies, resources, products, systems, reporting and logistics to OTP standards. The integration of the two financial institutions ran seamlessly, so the customers experienced benefits of a smooth migration, to the satisfaction of everyone engaged in this great endeavor.
The sheer complexity of a banking integration project was additionally burdened by COVID-19 and measures imposed due to the pandemic. In March 2020, state of emergency was announced due to the pandemic situation caused by the Coronavirus. The whole project had to quickly adapt and consequently move to remote working to minimize issues and protect employees. Most of the remaining activities were executed via online platforms, such as testing and education or the Merge Weekend itself. Despite the lack of face-to-face interaction and communication difficulties the Project was not delayed. Finally, COVID-19 had no impact on the planned Merge date, and all merge weekend activities could be executed timely, with excellent results. The integration of the two major players on the Montenegrin financial market was completed on 13th December 2020. The merged Bank continues its operations under the name of Crnogorska Komercijalna Banka AD Podgorica (CKB), member of OTP Bank Group.
As a result of this latest acquisition, OTP Bank Group further fortified its position in the Region and especially on Montenegrin market, reaching 32.9% market share in loans, and having 34 branches with 530 employees, being the number one bank in Montenegro.
This success was surely a result of agile and flexible approach from the Project Management Organization, clear guidance, methodology and enormous dedication and professionalism of all participants involved in the banking integration project.
One fact needs to be highlighted here, due to the size of the Montenegrin market, the size of the banks involved and resources available – the number of members in PMO, permanent Key Users and delegates involved – was significantly lower, whereas the complexity of tasks remained similar as in any other integration project. At first it may look like an easier task to coordinate, but with the same scope of activities and same complexity of the Project’s processes and deliverables it was, in fact, quite the opposite.
The local Project Management Team consisted of 7 colleagues from CKB and Podgorička banka, supported by 3 dedicated OTP Bank Group level coordinators and bolstered by 6 MINDSPIRE consultants throughout the Project, providing guidance and support in methodology, facilitation and coordination of 39 working groups and cross-functional teams. Responsibilities covered classic areas of project management like project planning and follow-up including the related administration, tracking, reviewing, and coordination of tasks and activities; set-up and operation of project governance, internal communication, as well as management reporting; along with the change management and change control of the project.
All in all the main lessons learned from the merger and integration are the following:
Commitment and agility
Commitment of the key personnel was the key to ensure that project delivery was continuous even at critical times, like under a Pandemic situation. The management’s trust in the team has helped to grow ownership within the working group leaders and other key personnel. This commitment helped to react quickly to changes and to have a problem-solving attitude: although the project had fixed scope and timing forcing the team to deliver in waterfall model, agile elements were used.
Fast adaptation to remote work
When Covid-19 appeared, the project quickly adapted to home office working and new remote processes were introduced to ensure continuous progress. Protective steps were taken immediately, and monitoring of the cases and risks related to the pandemic was implemented by the Project Management Office. Ad-hoc meetings and calls became more common, driving better communication between the different project members.
Preparation, preparation, preparation
The legal Merger and data migration were set to one weekend, where the complete integration had to be conducted without the clients having any discomforts. The Merge Weekend required thorough preparation and methodological guidance. Best practices were tailored for the bank’s size and culture, and they were welcomed and used with open mind. The project team has rehearsed the event several times with detailed plans and centralized coordination.
Ultimately, after 17 months of intensive and challenging project work, the legal and technical merger of CKB and Podgorička banka has been successfully ended on 13th December 2020 – on time and with excellent results. With all defined KPIs reached 100% and, as confirmed in days that followed, with first month of the Post-Merge period without any major issues, proving that project leaders could understand and manage the complexity and importance of the integration’s all aspects. Extensive knowledge and experience previously gained from similar banking integration projects significantly contributed to the success of the merger. Cooperation with OTP Bank Group in the Region worked excellently, and the Montenegrins could benefit from the full support and supervision of delegated OTP Headquarters responsible personnel.
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