Lou Naumovski knows what it feels like to lose money in Russian banks. He helped set up the European Bank for Reconstruction and Development's representative office in 1992, served as its director until late 1997 and then was a senior banker for the EBRD's Russia team in London.
Despite the August 1998 economic crisis ?€” in which the EBRD, the country's No. 1 foreign investor, lost hundreds of millions of dollars ?€” Naumovski was not too put off to accept a new position last year where all of his clients are Russian banks.
As general manager of Visa International's local office, which opened last September, Naumovski is upbeat about the changes he's observed, especially in banks' willingness to expand into retail, where his new business activity lies.
"I used to say I'm neither a pessimist nor an optimist concerning Russia. But in this case, I'm an informed optimist," Naumovski, 44, said in an interview. "I know about the Russian banking sector, the good things and the bad things. And I think there are real opportunities."
A Canadian citizen from Macedonia, Naumovski had his eye set on the Soviet Union starting from his youth in Hamilton, Ontario, in the early 1960s. He was fascinated with any news out of Russia and remembers clearly the Cold War and the Cuban Missile Crisis.
In college, he focused on international affairs and Soviet studies. Back then, his plan was to become a diplomat. He finished graduate school in Ottawa, passed the foreign service exam ?€” and thought he "had arrived."
The foreign service tried to send him to Chicago, which he didn't consider very foreign. As one of a few Slavic-language speakers, Naumovski was put in a one-year Russian language course, which he finished in three months, and was shipped off to the Canadian Embassy in Moscow in 1982. He admits that he's addicted to this country.
"I really felt like I was flying because I'd started to realize my dream of doing something with Russia," Naumovski says.
His first brushes with the country's banking industry were in the early 1980s, when he was dealing with Canadian exports to Russia. "To see the state banking system as it was then turn into some kind of commercial banking system ?€” not a lot of people had that opportunity."
Naumovski's diplomatic career did not only take him to Russia; he also spent two years each in Baghdad and Atlanta. However, having grown tired of writing reports that would be read by a few people in the ministry and sensing that the foreign service could be rather limiting, Naumovski left the profession.
In 1990, he was recruited as the first executive director of the Canada-U.S.S.R. Business Council, where he stayed for two years.
Moving back to Moscow in 1992 with the EBRD and again last year with his wife and two sons, now ages 7 and 12, Naumovski found himself in a mostly Russian environment, with Russian friends, contacts and co-workers ?€” a stark contrast to his first arrival, when he was sequestered in diplomatic housing and constantly followed around as if he were a spy.
His work at Visa International, an association of member banks, including 141 in Russia, is not entirely different from his EBRD job as the process for becoming a Visa member has parallels with applying for a loan. Only now he is working with another side of the industry: If earlier he dealt with people whose focus was on quick returns on GKOs, now his bank partners tend to think of the customer.
"I don't see the bigger picture like I used to at the EBRD, but I see the retail banking, I see the card business," Naumovski says. "There are tremendously gifted specialists who are dedicated to providing ?€” surprise, surprise, in post-Soviet Russia ?€” consumers with what they want."
As a consumer, Naumovski makes for a poor payment-card customer. Being a Slav, he says, he was taught never to borrow money; he never keeps a balance and pays his bills every month. When Naumovski finished college and received six credit card offers in the mail, they went straight in the trash because he didn't have a job. (Today he has six or seven cards in his wallet, including at least one from a competitor.)
Naumovski says he feels like a Slav with the politics of a Canadian. "On an economic quest for a better life," his father left Yugoslavia a few months after Naumovski was born, and the family was allowed to immigrate only four years later.
Where Naumovski will be in five years is up in the air. He likes start-up phases, first at the EBRD and now at Visa's new office, where there is room to grow. The blow of the crisis saw the customer base slip from 1.6 million to 800,000. The figure is now up to almost 1.2 million, but 76 percent are in St. Petersburg and Moscow. Distrust in banks and dependency on mattress-money are no small hurdles.
Naumovski feels he has quite a few years left of working with banks to convince consumers that payment cards make sense. For the distant future, he still doesn't rule out a return to diplomacy. He could have his choice, since in addition to English, Russian and Macedonian, he knows French, Serbo-Croat and Bulgarian.
"Never say never."
Despite the August 1998 economic crisis ?€” in which the EBRD, the country's No. 1 foreign investor, lost hundreds of millions of dollars ?€” Naumovski was not too put off to accept a new position last year where all of his clients are Russian banks.
As general manager of Visa International's local office, which opened last September, Naumovski is upbeat about the changes he's observed, especially in banks' willingness to expand into retail, where his new business activity lies.
"I used to say I'm neither a pessimist nor an optimist concerning Russia. But in this case, I'm an informed optimist," Naumovski, 44, said in an interview. "I know about the Russian banking sector, the good things and the bad things. And I think there are real opportunities."
A Canadian citizen from Macedonia, Naumovski had his eye set on the Soviet Union starting from his youth in Hamilton, Ontario, in the early 1960s. He was fascinated with any news out of Russia and remembers clearly the Cold War and the Cuban Missile Crisis.
In college, he focused on international affairs and Soviet studies. Back then, his plan was to become a diplomat. He finished graduate school in Ottawa, passed the foreign service exam ?€” and thought he "had arrived."
The foreign service tried to send him to Chicago, which he didn't consider very foreign. As one of a few Slavic-language speakers, Naumovski was put in a one-year Russian language course, which he finished in three months, and was shipped off to the Canadian Embassy in Moscow in 1982. He admits that he's addicted to this country.
"I really felt like I was flying because I'd started to realize my dream of doing something with Russia," Naumovski says.
His first brushes with the country's banking industry were in the early 1980s, when he was dealing with Canadian exports to Russia. "To see the state banking system as it was then turn into some kind of commercial banking system ?€” not a lot of people had that opportunity."
Naumovski's diplomatic career did not only take him to Russia; he also spent two years each in Baghdad and Atlanta. However, having grown tired of writing reports that would be read by a few people in the ministry and sensing that the foreign service could be rather limiting, Naumovski left the profession.
In 1990, he was recruited as the first executive director of the Canada-U.S.S.R. Business Council, where he stayed for two years.
Moving back to Moscow in 1992 with the EBRD and again last year with his wife and two sons, now ages 7 and 12, Naumovski found himself in a mostly Russian environment, with Russian friends, contacts and co-workers ?€” a stark contrast to his first arrival, when he was sequestered in diplomatic housing and constantly followed around as if he were a spy.
His work at Visa International, an association of member banks, including 141 in Russia, is not entirely different from his EBRD job as the process for becoming a Visa member has parallels with applying for a loan. Only now he is working with another side of the industry: If earlier he dealt with people whose focus was on quick returns on GKOs, now his bank partners tend to think of the customer.
"I don't see the bigger picture like I used to at the EBRD, but I see the retail banking, I see the card business," Naumovski says. "There are tremendously gifted specialists who are dedicated to providing ?€” surprise, surprise, in post-Soviet Russia ?€” consumers with what they want."
As a consumer, Naumovski makes for a poor payment-card customer. Being a Slav, he says, he was taught never to borrow money; he never keeps a balance and pays his bills every month. When Naumovski finished college and received six credit card offers in the mail, they went straight in the trash because he didn't have a job. (Today he has six or seven cards in his wallet, including at least one from a competitor.)
Naumovski says he feels like a Slav with the politics of a Canadian. "On an economic quest for a better life," his father left Yugoslavia a few months after Naumovski was born, and the family was allowed to immigrate only four years later.
Where Naumovski will be in five years is up in the air. He likes start-up phases, first at the EBRD and now at Visa's new office, where there is room to grow. The blow of the crisis saw the customer base slip from 1.6 million to 800,000. The figure is now up to almost 1.2 million, but 76 percent are in St. Petersburg and Moscow. Distrust in banks and dependency on mattress-money are no small hurdles.
Naumovski feels he has quite a few years left of working with banks to convince consumers that payment cards make sense. For the distant future, he still doesn't rule out a return to diplomacy. He could have his choice, since in addition to English, Russian and Macedonian, he knows French, Serbo-Croat and Bulgarian.
"Never say never."