Jean-Paul Piotrowski, the CEO of Credit Agricole Bank, told about his more than 30 years banking experience with LDaily. In particular, he told about the Universal Proximity banking model providing for service rendering to all customer segments; significant potential of Ukraine not only in financial but also in high-tech fields; and special aspects of management in crisis situations. The experienced banker is convinced that fundamental values like social responsibility and proper attitude towards people are the most important for any business.
LDaily: You have been working for Credit Agricole for a long time. Why have you chosen this banking Group?
Jean-Paul Piotrowski: I joined Credit Agricole Group 30 years ago. I had different opportunities and positions abroad in very different countries. It was a great experience because I was able to take over various functions.
Credit Agricole is a large banking group presented in more than 50 countries. It is one of the TOP-10 global banking groups. It employs 160 thousand people and offers them multiple career development opportunities. This is one of the reasons for choosing Credit Agricole. Social responsibility and human respect are the basic Group’s values. I totally share these values.
I have been the General Manager of Credit Agricole Ukraine for more than 5 years. I took over the responsibilities in 2014 when the times were quite difficult for the country. However, I joined Credit Agricole Ukraine because I was convinced of the potential of Ukraine, the strength of the bank’s team.
LDaily: Credit Agricole Bank belongs to the most reliable and stable banks of Ukraine. Please, tell us more about the bank’s presence in the market.
Jean-Paul Piotrowski: Credit Agricole Ukraine is the oldest international bank operating in Ukraine. We have been operating in the country since 1993.
Our bank employs more than 2300 people. We have a network of 150 branches throughout Ukraine. We operate under a Universal Proximity banking model, and cover all customer segments: PI clients, SMEs, Mid Corporates, LLC/MNCs.
Credit Agricole Ukraine is a reference bank for multinational clients, an opinion leader on the agricultural market. We have a credit market share of 8% in targeted segments. Our bank is also the leader in car loan financing with a market share of more than 40%.
LDaily: In 2019, Credit Agricole announced the new mid-term strategic goals until 2022. What are the focus areas for the coming years?
Jean-Paul Piotrowski: First of all, our current business model based on a balance of the various bank’s activities, both at the clientele and business line levels, has shown its efficiency, flexibility and resilience. The bank should consolidate this business model. We would like to actively support the development of the local economy and agriculture when the country is going to be engaged in a large-scale agrarian reform. We would also like to support the key development sectors of Ukraine, for example, renewable energy. The bank will offer adapted green financing solutions.
We will continue to modernize the network by developing our new interactive branch model; accelerate the digital transformation of the bank. We are going to implement these operations with a particular focus on customer satisfaction, HR dimension and social responsibility.
This is how we can support the development of Ukraine.
LDaily: What are the most promising activity sectors in the Ukrainian economy?
Jean-Paul Piotrowski: Ukraine is a country with great potential. It is an important market at the gates of Europe, given its size and population, which evolves in a more favorable economic context. Its positive GDP growth is engaged in large-scale reforms supported by international donors.
Some of the most promising sectors include:
– The agricultural sector. Ukraine is already a major player at the global level (leading producer and exporter of sunflower oil and grain, the third colza exporter, etc.) The potential remains enormous: around 100 million tons of grain could be produced over the next 5 years. This will require major investments in infrastructure, storage facilities and equipment. Land reform will boost investments in this sector.
– The IT sector. Ukraine has IT specialists with a worldwide reputation. The development of IT is spectacular and will continue. Ukraine could later position itself as an IT hub for Europe and be a key global player for startups.
– The infrastructure and transport sectors. The needs are enormous in this field, in particular, in the railways: we need more locomotives and wagons.
– The renewable energy sector. Many projects are already launched. This tendency will continue.
– Other sectors are also boomers, such as telecommunications, health, cosmetics, pharmacy, etc.
LDaily: In your opinion, what should be done to attract foreign investors to Ukraine and what is important for them?
Jean-Paul Piotrowski: This is a very good question. There are different factors to consider. At the level of the companies we meet with, the main criteria taken into account in order to base and develop in Ukraine are:
– Political stability and the situation in the East of Ukraine, which is the subject of concern. However, this is also economic stability, GDP growth, local currency stability, lower inflation, liberalization in the foreign exchange market.
– Other criteria are also important, such as simplicity of administrative procedures, stable tax policy; the ability to find local banks able to support investment projects and to accompany them in their development.
– Transparency in the competition area and the business environment, in general, are key, particularly with regard to the anti-corruption measures taken.
– Finally, the labor market and the ability to find locally the necessary expertise to ensure their implementation.
LDaily: What is the situation in the banking sector today?
Jean-Paul Piotrowski: The banking sector situation has improved significantly during the last 5 years. I think the banking sector is one of the most valuable sectors in Ukraine.
Many reforms were put in place during recent years including pensions, education, healthcare, decentralization, tax policy, deregulation, and FX market liberalization. In my opinion, the successful reform of the banking sector is one of the most important initiatives. Ukraine’s National Bank has restructured the banking sector and obliged banks to meet a number of standards including passing regular stress tests and clarifying their business model. In parallel, new rules have been put in place in terms of transparency, governance, and anti-money laundering. This development resulted in the disappearance of nearly 100 banks (the number of banks has declined from 180 to 74) and the nationalization of the country’s biggest private bank. This has allowed the Ukrainian banking sector to strengthen and restart lending. The role of the banking sector in the national economy is now more active, in terms of both loans and deposits. Further measures to protect creditor rights now need to be accelerated to allow banks to ease their credit policies.
The banking sector is still facing challenges. The level of NPL is still very high. New requirements on capital and liquidity will be made. The profitability of the banking sector is improving but remains below the international standards so far.
LDaily: What lessons can you learn from the previous crisis at your bank’s level?
Jean-Paul Piotrowski: Credit Agricole Ukraine has managed this difficult period very well and kept positive net results in spite of the crisis.
When you have sound, long-term management, this is the best protection in a crisis. A clear business model, a good balance between the various bank’s activities, a diversified clientele, working in different sectors: agriculture, IT. It is better to focus on the bank’s strong points instead of being present everywhere, for example, the multinational clientele or agriculture where we have real expertise.
Being careful about credit risk policy, financial KPI + equilibrium (liquidity, solvency ratio), operational risks and zero tolerance to compliance risk are success factors. It is important to support and train the staff to have competent and responsible managers.
The crisis has also taught us that the ability to anticipate using the appropriate risk indicators was key to avoid being only in a reactive mode.
Lastly, we have taken drastic measures in terms of reducing credit risk exposure doing it in coordination with the customer and continuing to support them in case of difficulties.