The current global pandemic of the coronavirus infection COVID-19 has become the strongest catalyst of changes in all spheres of human life. Even the strongest economies of the world have undergone perceptible shocks. The social behavior of people and their usual way of life have changed. The banking system not only did not stand aside, but was forced to quickly adapt to new challenges.
How the banking system has passed through 2020, as well as about the challenges of 2021, was told by Tetiana Putintseva, Chair of the Management Board of Commercial Industrial Bank.
How did the banking system of Ukraine get through this year, and, in particular, your bank?
The year was difficult both for the banking system and for business. This crisis is unlike the previous ones we went through in 2008 and 2014. It affected all countries of the world, and our economy is heavily dependent on what is happening on external markets. But despite the difficult period and its consequences, the banking system feels normal. The National Bank of Ukraine took very effective and timely measures to ensure stability and margin of safety for the banking system.
Over three quarters of 2020, banks recorded UAH 37.6 billion of net profit. This is 22% lower than the same period of last year, but taking into account market conditions such a result is not bad. For example, in Q3 2020, the financial result of banks was UAH 13.8 billion, which is 1.8 times more than the result of Q2 of the current year.
The main reasons for the lower financial result are: a decrease in business activity, a reduction in demand for loans and banking services, an increase in non-payments on loans, and the formation of reserves. All this affects the interest and commission income of banks. The pace of increase in commission and interest income was the lowest in the past 4 years.
At the same time, the profitability of Commercial Industrial Bank was higher than that of competitors. Compared to the same period of last year, the bank's net interest income increased by 27%, net commission income — by 37%, trading result — by 86%. This is significantly higher than across the banking system and better than the results across our group of competitors.
It should also be noted that we continue to develop dynamically by the main indicators of banking activity.
The bank's assets over 3 quarters of 2020 grew by 67%, the loan portfolio by 29%, client funds by 63%. Across the banking system, these indicators are 14%, 3%, and 18% respectively.
What trends of 2020 have formed in the banking system of Ukraine and will they be preserved in 2021?
The main trend of this year can be considered an increase in the volume of non-cash settlements and transfers, as well as the number of users of electronic online services. In connection with this, the number of offers on the market has increased both from banks and from fintech companies, including new mobile applications of neobanks.
Banks actively optimized business processes, conducted typification of clients, and standardization of available procedures for integration into online services. This made it possible to significantly unburden branches from visits for standard operations both for individual clients and for SMB clients.
Clients of small and medium-sized business got the most. Entire sectors of business suffered; this especially affected the service sphere. This category of clients is a priority for us; we treat the situation that has developed with understanding and always try to meet clients halfway, as much as possible. For us, the client — is the highest value; therefore, the task of our bank is not only to provide the full complex of services, but to become a reliable partner and financial consultant, especially in such a difficult period.
This year, most clients, especially new ones, applied to us precisely for consulting assistance. In many banks, due to standardization of procedures and optimization of business processes, less time began to be devoted to clients with non-standard requests, and sometimes even refusing them consulting support entirely. Solving non-standard tasks and an individual approach to each client — is the basis of our business model. This year, based on the results of the competition «Bank of the Year - 2020», Commercial Industrial Bank won in the nomination «Best Bank for individual approach to Clients».
Of course, the trend toward digitalization that has emerged recently will be preserved not only in 2021, but will also become one of the main vectors of development of banks for a long time. In the third quarter, the share of contactless transactions on cards was 72% of the total number of MasterCard transactions in physical retail. A year ago, this indicator was slightly more than 51%. According to NBU statistics for July 2020, you can see a decrease in payment turnover in retail outlets, but turnover in e-commerce and turnover of P2P-transfers are growing with doubled force. This says that the trend toward digital will only intensify. The future of retail banks lies in OpenAPI technology, seamless payment solutions, biometrics, and electronic commerce».
For our bank, retail business is a service business; we constantly work on the development of banking services online, including e-commerce. But we pay special attention to creating opportunities for the development of small and medium-sized business: we constantly work on business cases, create comprehensive solutions that solve the business tasks of our clients as quickly as possible and with minimal expenses.
This year, which the Times called «the worst» in history, is ending. What would You wish our readers on the eve of the New Year holidays?
Ukrainians have always been very positive, as well as resilient to any crises thanks to their resourcefulness. Such qualities deserve respect. On the eve of the New Year holidays, I want to wish everyone to maintain optimism, not to lose self-control and self-confidence. May Your homes have abundance and family coziness! Happy upcoming New Year and Merry Christmas!
Background:
Commercial Industrial Bank (JSC «CIB») — is a universal bank, founded in 1993, with a full range of financial services for corporate and private clients. The bank's network has 38 branches in various regions of Ukraine. JSC «CIB» fulfills all economic norms established by the NBU in accordance with legislation.
Tetiana Putintseva has banking experience of more than 20 years, 13 of which — in managerial positions. She began with the position of branch economist and after several years became the head of one of the branches of «Privatbank». From 2006, Tetiana Volodymyrivna held the position of Deputy Chair of the Management Board.
She worked on the management staff of PJSC «Prominvestbank», JSC «Swedbank», JSCB «TAS-Komertsbank», OJSC CB «Pivdenkombank». From 2013, she held the position of Deputy Chair of the Management Board of JSC «TASkombank» - head of the Eastern region.
Appointed Chair of the Management Board of Commercial Industrial Bank from April 2018.
