What role does Kredobank’s membership of the PKO Bank Polski financial group play in terms of your attractiveness on the Ukrainian market?
PKO Bank Polski is the largest Polish bank and one of the biggest financial institutions in the entire Central and Eastern Europe region. During the last round of stress tests conducted by the European Central Bank, PKO Bank Polski scored highest among selected European banks. With this in mind, being a member of PKO Bank Polski Group gives us strong parent support and access to both know-how (PKO Bank Polski has a vast corporate client base and offers a wide range of products including advisory, M&A, brokerage etc.) and to European markets. This European market reach is of particularly keen interest to our Ukrainian clients, especially to Ukrainian exporters.
Bilateral economic ties between Ukraine and Poland are currently experiencing a period of significant growth. What role does this segment play in your overall business portfolio and what tailored services do you offer specifically to companies with a Polish-Ukrainian focus?
Within our overall corporate strategy, we are particularly interested in working with Ukrainian corporate clients who have significant exposure to international trade. This means companies engaged in export and import, especially companies that are looking to banks to provide trade finance products such as guarantees and treasury products supporting their foreign exchange needs. Of course, we naturally feel particularly strongly about our products and services when it comes to supporting our local clients when they develop trade relations with Polish companies. We currently have a dedicated team to support both our local clients and Polish companies when it comes to managing cross-border business between Poland and Ukraine. This team supports our clients, both when dealing with basic banking services such as opening accounts, and with more complex requirements. This extends to covering their investment needs when bank loans and other services become necessary.
How do you assess the progress of Ukraine’s post-2014 banking sector reforms?
Although I have now worked in the Ukrainian banking system for a little more than a half a year, it is difficult for me to evaluate the overall nature of these reforms. At this stage, I think it would be more realistic to talk about my observations regarding the specific results of these reforms as I have encountered them. At present, I see several positive effects from the Ukrainian banking sector reform process. Firstly, thanks to these reforms, Ukraine’s banking sector has become healthier than ever. Due to the “cleanup” of the banking system, a lot of unstable, ineffective and “pocket” banks that served only to finance the businesses of their principle owners have now left the market. The banks that have continued to operate in Ukraine now clearly consider the provision of banking services as their main business. This has significantly reduced the risk of any potential future systemic collapse. If ineffective or uncompetitive banks now decide to leave the market for whatever reason, this will not have a major influence on the Ukrainian banking system as a whole. The stability and profitability of the Ukrainian banking sector has helped the National Bank of Ukraine to bring inflation under control and strengthen the credibility of the hryvnia currency, which now remains more or less stable without any administrative support or the need for artificial institutional intervention. Another significant achievement I would like to highlight is the recent increase in freedom regarding foreign currency transactions. Since their introduction in early 2019, Ukraine’s foreign currency reforms have made life much simpler for the business community and retail banking customers alike.
What do you regard as the top reform priorities for the Ukrainian banking sector for the coming few years?
In my view, there are a number of key priorities on the Ukrainian banking sector reform agenda. These include increasing the transparency of the banking sector and implementing European standards of information exchange between banks. Ukraine would benefit from the further simplification of international payments and development of the regulatory base to help facilitate the continued digitalization of the banking sector. Ukrainian banks have well-developed online banking services but need to improve the legislative base in order to widen the number of operations which can be done digitally without visiting physical bank branches. This would make it easier for customers to open and close bank accounts online, while simultaneously increasing the security of such operations.