Forbes November 2022
Since the beginning of war, Crédit Agricole Group has suspended its activities in Russia and launched a €10million solidarity fund, supported clients and team and continued to do charity, while ensuring business continuity locally. Carlos de Cordoue told Forbes how bank managed to remains dynamic and supportive of both the economy and the Ukrainians.
At the beginning of the war, French companies had contradictory statements about their business in Russia. Credit Agricole, however, stated about suspending its activities in Russia. What was the reaction of the rest of the Group to such decision?
Credit Agricole Group decided to stop new financing to Russian companies and all commercial activity on the first day of war. In fact, we did not have any retail banking there, only Crédit Agricole CIB subsidiary with 170 employees dealing with large International Companies.
The commercial lending commitments for both countries were around 0.6% of Crédit Agricole S.A.’s commercial lending portfolio as of end of 2021. In Ukraine, we have USD 1.5 billion of financial commitment. After all, it is not the numbers that matter, but rather the actions you undertake.
What was your action plan when the invasion occurred?
Our tasks were to unsure banking services and support to our clients as well as protection to the team. Thanks to dedication of our employees, we never stopped working even for a day, having not less than 70% of branches opened. We offered clients special terms of service and concrete actions such as : extended the validity period of all cards, cancelled monthly service fee for all card packages, no penalties for loan products, we gave financing to agrarians, now we do restructuring of loans. We also support clients who are living abroad now. We proposed the loyalty programs for Ukrainians in Poland. Credit Agricole Bank Polska was opening about 500 accounts for Ukrainians per day during the first month of the war.
We supported employees - guaranteed jobs for everyone and even increased the salaries this October, allocated additional financial support to all the team and continued to fulfill our social obligations including insurance policies. 40% of the team was temporarily displaced in safety regions in Ukraine, 15% - abroad, where Group is represented: Poland, Germany, Italy, France. We provided them with accommodation and workplace.
Despite the war, Credit Agricole Ukraine became one of the 20 most profitable banks in –1H 2022, according to NBU. How are you building your business now to pursue the right direction?
From the beginning of the war, the NBU took the right decisions at the right moment to protect the banking system and to make it stable. In general, the liquidity of the banks remains at a high level. Since February 24th, Credit Agricole Ukraine increased its customers deposit base by 25%, for example. That’s one of the reason why we are able to show quite a high level of operating profit even in an extraordinary adverse context.
Nevertheless, we have to admit that we have a lack of visibility in the future and we want to keep the cautious stand. At this stage and in our current scenario, we estimate NPL at 20%. This is why we put a large portion of our operating profit into provisions, in order to build up a protection for the future.
Everything is clear with the strategy of protecting the bank, but did the war prevent the development of new banking products?
In fact we kept almost all our development projects and planned investments – mostly in digital solutions, and some in branch network. This autumn we have launched two great digital solutions: CORPEX – the internet bank, cash management system for business, and CA+ Pro - online bank for entrepreneurs.
We started CORPEX development one year ago and now all the clients are migrating to this new platform. It is actually one of the most advanced cash management platforms available on the market now. There is a payment analytics, a flexible distribution of access rights and integration between clients’ accounting systems and the bank's services, for example, to submit tax declarations.
Regarding online banking CA+ Pro – it is meant for private entrepreneurs from IT and creative industries. Our clients can easily make payments from anywhere in the world on a computer, tablet or smartphone. CA+ is already on the third place in Google Play and App store. Therefore, we have reasons to expect high user’s evaluation of new solutions as well.
The agricultural sector cremains our key direction - we issued UAH 1.2 billion loans for agribusiness within the state program "Affordable loans 5-7-9%".
You have mentioned the 10 M euro Solidarity Fund granted by the Group. How is it used?
A half of the fund is used for priority number one: compensations and financial support to all employees. We also direct this fund to help employees who suffered casualties, whose homes were damaged.
Another half – 5 m euro – is dedicated to help Ukrainians who are in need. Group donated part of budget to UNICEF and together with the Group we work on further allocation of this fund.
Credit Agricole continues to do charity. Tell us more detail
We decided to save commercial budgets and to allocate part of it to charity. We have our social responsibility project named “We Care!” and we really do so. Our social position transformed into record charity donation - almost UAH 20 million to various charitable projects.
Helping children in hospitals is one of our priorities. We purchased medical equipment for children hospitals in particular Zaporizhzhia Regional Children’s Hospital. Our latest donation is UAH 4.7 m for an expert class ultrasound diagnostic system for IPOG. Earlier this autumn we bought them modern anesthesia breathing apparatus for the intensive care unit. We support the professionalism and dedication of doctors who save children’s lives. This high expert institution is critically underfunded.
We donated 5 m UAH to the Red Cross in Ukraine, purchased a multivan for humanitarian aid transportation.
Last but not least, proud to say, that our clients also accumulated UAH 31 mln via mobile application CA+ to support Ukraine’s Armed Forces and charitable organizations.