Helaba Annual Report 2016
Annual Report 2016
how close relationships with customers promote growth

A matter of trust

What are the defining features of good teamwork between a bank and its customers? What new values merit a place alongside the perennial virtues of reliability, continuity and discretion? Two managers from the NORMA Group and their partners at Helaba share their views on these important issues.

Frankfurt from the 46th floor of the MAIN TOWER: a silent miniature word of cityscape, river and humanity. Visibility in the middle of this clear February day is particularly good – and the man fortunate enough to be enjoying it knows exactly where to direct his gaze: "If you look hard enough over there," says Dr. Michael Schneider, "you can almost see all the way to NORMA." MDAX-listed NORMA, of which Schneider is CFO, has its head office in nearby Maintal. A market and technology leader in engineered joining technology solutions, it employs around 6,700 people across a range of sites in Europe, North, Central and South America and the Asia-Pacific region. Helaba, which has been assisting the NORMA Group as a finance partner since it went public in 2011, now ranks as one of the group's primary banks and collaborates closely with Schneider and his Group Treasurer Andreas Müller. Today the two have come to the MAIN TOWER to meet with their Helaba customer advisor Michael Sager (Head of CRM MidCaps Southwest), Claudio Lagemann (one of the two Division Managers, Corporate Finance) and Dr. Norbert Schraad (member of the Helaba Board of Managing Directors). The team of company executives and senior bankers is in regular discussion on various subjects.

Andreas Müller:

Solutions can only ever be as good as the understanding that exists between the two partners. Michael Sager and I are therefore in touch two or three times a week, depending on the transactions taking place at the time, and even speak daily during particularly busy periods. He links us up to product experts and other colleagues at Helaba, who also regularly assist us with our day-to-day core business in respect of either FX or interest rate management. We call on their market expertise in relation to matters like current developments, such the volatile environment in the USA at the moment, and also tap into their know-how regarding questions surrounding the ever more complex regulatory situation and issues like EMIR.

Michael Sager:

My aim as an advisor is to pick up on the signals at an early stage and to approach the customer proactively with ideas. I offer suggestions for the customer to consider and then work with them to discuss and tackle the issues that arise in the context of implementation. We lay out the ground rules and then track down a win-win situation that delivers added value for both partners.

Claudio Lagemann:

We seek to understand and manage expectations so that our customers also know promptly exactly where they stand. Trust depends on a swift response, even if circumstances dictate that the response must be a negative.

Michael Sager,
Helaba customer advisor

Highlighting alternatives without interfering or intervening in the customer's strategy: that is the balancing act the duo of Michael Sager and Claudio Lagemann perform every day. Providing effective support to the expanding international companies they serve requires them also to consider the day after tomorrow – the customer's medium-term to long-term strategic objectives and the associated challenges for its organisation.

Claudio Lagemann:

We can only think ahead in this way if we have a very thorough understanding of the company concerned. It is not financial ratios and so on that matter here but rather our familiarity with the industry, the driving forces and key trends within it and the pertinent strengths and weaknesses.

Dr. Michael Schneider:

This particular aspect is absolutely critical for us. We pursue a clear growth strategy involving both organic and inorganic pathways and when it comes to acquisitions, we are of course very keen to put good financing arrangements in place. We have an excellent financial foundation, but naturally we still need strong, fast and above all trustworthy finance partners.

Dr. Michael Schneider
and Claudio Lagemann

Dr. Norbert Schraad:

The challenge for us is to convert customer signals into practical solutions, to recognise the concerns that trouble our customers and to have the wherewithal not just to offer answers, but to deliver on them reliably when the time comes. We only promise what we know we can achieve and we maintain strong networks and open, well-prepared communication channels to make sure this remains the case.

Dr. Michael Schneider:

This capacity of Helaba's people to transform ideas into solutions is very important from my perspective. We – the customer – have a picture of where we want to end up, but we do not know all of the details of the road to take us there. We count on being able to discuss openly the current situation and the direction of future development – and on being able to do so with a partner that moves at the same speed as we do.

“Trust can never be a one-way street. We give our trust, but expect to be trusted in return." Dr. Michael Schneider,
CFO of the NORMA Group

NORMA and Helaba coordinated their speed of response most effectively in August 2016, for example, when the NORMA Group placed an additional € 150 m promissory note loan with fixed and variable interest tranches. The group issued four of the eight tranches in US dollars. Terms were set at five, seven and ten years. The proceeds of the issue were used to fund activities including the acquisition of Parker Autoline in the fourth quarter of 2016, which expanded NORMA's range of connectors and further enhanced its position in the market. This was the third successful promissory note transaction completed by Helaba for the NORMA Group.

Andreas Müller:

I still remember very well the kick-off meeting for our first promissory note. We had no idea what to expect. Yet the Helaba team was able to reassure us convincingly that the process and the management of the promissory note issue was in safe hands. For a bank to be able to quell a customer's uncertainty about a completely new financing process like this, I think, speaks volumes for the strength of the relationship between the two. The upshot was that we decided, with Helaba on board, to explore what was for us a new approach, one that resulted in our successful first foray into the promissory note market.

Dr. Michael Schneider:

Trust can never be a one-way street. We give our trust, but expect to be trusted in return. This give and take underpins our excellent long-standing partnership. Helaba's involvement brings us the benefits not just of a strong finance partner, but also of a valuable source of stimulus.

Trust thrives on critical and specific dialogue and is enhanced by the ability always to keep the bigger picture in mind. This realisation led to the establishment four years ago of a customer round table that provides a platform for people from different companies and sectors to share thoughts and ideas about subjects of interest to all. The companies involved regularly find themselves all facing the same questions and challenges. Prominent examples include expanding operations into other countries, payment transactions, cash pooling, locking in favourable interest rates and acquisitions.

Michael Sager:

Why not make use of the knowledge and experience others have to offer? Our round table brings together the "hidden champions" that we support in a manner conducive to effective networking and discussion. Information sharing at the operational level: that is the added value I can bring to customers in my capacity as an advisor. And where is the added value for me? I gain better access to the operational issues that concern my customers, which enables me to align my advice – and Helaba's products – even more carefully with each customer's specific needs.

Andreas Müller:

The opportunity to discuss matters with other customers of the same bank that find themselves in a similar position greatly simplifies all kinds of issues. The other customers involved may face similar decisions and challenges or may perhaps have only recently emerged from projects and processes just like those we ourselves are about to embark upon. It is one thing to listen to the bank's customer advisor assure us that everything will be OK, quite another to hear fellow customers of the bank tell us not to worry, that we'll make it through fine and that the bank will give us the support we need. That Helaba provides and promotes this opportunity to meet and talk with our peers – and it is one of the few banks to do so – is a real bonus for us. Networking with other customers is a big plus for us because it enables us to benefit from their experience.

Claudio Lagemann:

We don't control it in any way; indeed we want to hear as many different angles as possible as that is essential if every customer is to take something from the exercise. We are careful to ensure we also invite peers who are known to have a more critical viewpoint. We all see each other regularly in any case and it always works best if everyone tells it like it is. Helaba never tries to pressure customers into a decision; we just do our best to make sure they properly appreciate the risk/return profile. That is the foundation on which trust is built.

Andreas Müller,
NORMA Group Treasurer
Dr. Norbert Schraad,
member of the Helaba Board of Managing Directors
"That Helaba provides and promotes an opportunity to meet and talk with our peers is a real bonus for us." Andreas Müller,
NORMA Group Treasurer

Clearly the opportunity to speak directly person-to-person is one that neither the customer nor the bank would wish to forgo even in the age of digitalisation – or better yet, especially in the age of digitalisation. The approach opens up many possibilities but also brings many challenges; everyone gathered on Helaba's 46th floor this February day is certain of that.

Dr. Michael Schneider:

As a customer we obviously always want to have state-of-the-art process optimisation. The prompt and efficient exchange of information represents one of the main opportunities of digitalisation from our perspective. The potential exists for bulk processes to be made more efficient. But we cannot afford to overlook the issue of IT security, the technical conundrums involved and the threat of cyber crime. We need to be very focused in our use of digital working methods, expanding them selectively through a process of meticulous personal dialogue conducted with clear objectives in mind.

Dr. Norbert Schraad:

Precisely. Digitalisation allows us to map transactions more efficiently. Our business boils down to three things, trust, collateral and money. Money is ultimately nothing more than a way to summarise receivables and liabilities in figures, which makes it ideally suited to digital management and exchange. If that creates more scope and time for us as a bank to find solutions to the problems and requirements of our customers, so much the better.

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