Banking sector heavyweight Credit Agricole has become the latest international business brand to bolster its presence in Lviv as the west Ukrainian capital continues to lead Ukraine’s post-Euromaidan economy revival. In January 2017, the bank opened an MNC Desk in historic downtown Lviv. The new specialist branch aims to serve the region’s expanding multinational corporate business segment.
Close to Lviv’s growing corporate community
The choice of Lviv for the bank’s first regional corporate business branch in Ukraine is the latest vote of confidence for a city that has been attracting growing interest from international investors over the past few years. Credit Agricole Ukraine Board Member Larysa Bondarieva says the decision to select Lviv came following consultations with the bank’s clients and analysis of the Ukrainian business environment. “We always strive to be close to our clients, and many of our corporate customers are already active in the region. Our analysis of the geographical breakdown of investment also identified western Ukraine as a clear leader. The whole region, including Lviv, Volyn, Ivano-Frankivsk and Zakarpattia, is becoming more competitive. Investors are establishing production and manufacturing facilities that employ thousands of people. We expect this dynamic to increase in the coming years.”
On the EU’s doorstep
Lviv’s ability to attract international investment has received growing levels of attention over the past eighteen months as increasing numbers have entered the local market. Eye-catching investments have come from the likes of Japan’s Fujikura, which opened a major automobile component production facility in Lviv Oblast in spring 2016 – one of a number of international facilities in the region drawn by the availability of competitively priced and highly skilled labor coupled with close proximity to EU markets.
Ms. Bondarieva believes these selling points will continue to generate corporate interest for as long as the region remains competitive compared to the alternatives across the border inside the EU. She sees the new MNC Desk as a way to service this expanding corporate market by providing a combination of local knowledge and international financial standards while maintaining a personal approach. “Credit Agricole is moving towards digitalization for the standard banking needs of our customers, but when it comes to the sophisticated requirements of our corporate clients, there is no substitute for direct contact and personal relationships. It is impossible to develop the right tailored solutions without hands-on knowledge. Our team in Lviv can provide this for clients throughout the region.”
While geographical location is Lviv’s most obvious selling point, the region’s recruitment appeal is already a sign of west Ukraine’s recent success. Ms. Bondarieva says many of the bank’s clients have cited mounting levels of competition for employees, due to the increasing numbers of multinational investors arriving to the region. At the same time, well-qualified professionals also enjoy employment opportunities abroad. This process may drive up salaries and eventually attract recruits from elsewhere in Ukraine. However, it is unlikely to undermine west Ukraine’s competitive edge in the medium-term.
Building business bridges with Poland
Lviv’s EU-friendly location is a two-way street. The MNC Desk will provide corporate services for clients throughout the eight oblasts (administrative regions) of western Ukraine, while also seeking to serve as a business bridge for companies looking to expand across the border into the EU. “We are seeing more and more interest from our Ukrainian clients in expansion into Poland and other neighboring EU markets. The majority of inquiries are coming from companies based in western Ukraine. We see the MNC Desk as a way to help build bridges with other markets, working in conjunction with our colleagues in Poland. Representatives from Credit Agricole Bank Polska attended the opening of the MNC Desk in Lviv, reflecting the potential and readiness for greater cross-border cooperation,” Ms. Bondarieva says.
Untapped potential of Ukraine’s regions
The Lviv MNC Desk is Credit Agricole’s first foray into international corporate services in Ukraine’s regions, but Ms. Bondarieva confirms it is part of a broader expansion strategy. The bank recognizes the need to consolidate its presence in Ukraine’s regions – a strategy mirrored across the business sector as international investors look beyond the traditional Kyiv focus. Ms. Bondarieva identifies million-plus cities as those of greatest potential interest, arguing that there are huge unrealized opportunities beyond the bright lights of the Ukrainian capital. “We need to do more to promote investment opportunities in Ukraine’s regions. There is a lot of information available and plenty of well-attended business events taking place in Kyiv, but what we are currently lacking is an active dialogue with companies and business communities in the regions,” she says. “There is certainly room for improvement. Lviv is in a good position due to its close proximity to EU border and human resources, but other regions also have much to offer. It is too early to say where we plan to develop future MNC Desks, but we do believe Lviv is just the beginning.”