There are few more convincing expressions of confidence in the business climate than the recruitment and training of additional staff. This is exactly what ProCredit Bank is currently doing in wartime Ukraine. The bank spent 2022 adjusting to the new realities created by Russia’s full-scale invasion and concentrating on strengthening institutional stability, but business development has come back into focus during the first half of 2023.
This optimistic outlook reflects the wider mood within the Ukrainian business community and the better-than-anticipated wartime performance of the bank’s loan portfolio, says Viktor Ponomarenko, General Manager of ProCredit Bank in Ukraine. “It is not only a question of the bank’s ability to adapt to the situation. Ultimately, we depend on our clients and their adaptability,” he notes. “It has been very positive over the past eighteen months to see how the Ukrainian businesses we work with have been able to adapt to wartime conditions and continue to operate effectively. This gives us the optimism to embrace an expansion strategy.”
Thanks to recruitment efforts undertaken over the past year, the ProCredit Bank team in Ukraine is now larger than it had been on the eve of the full-scale Russian invasion in February 2022. This data point is all the more remarkable as the bank lost approximately 20% of staff during the initial months of the war as millions of Ukrainians sought safety in the west of the country or across the border in the European Union. The bank resumed recruitment efforts in summer 2022, initially filling vacant positions but more recently hiring additional staff. In a further indication of ProCredit’s bullish outlook, the bank has also resumed international training programs, with employees traveling to Frankfurt to train with colleagues from different countries of ProCredit Group.
One of the main tasks facing new recruits will be the expansion of ProCredit Bank’s loan portfolio as the bank looks to maintain its traditional focus on Ukraine’s SME community. Ponomarenko says ProCredit Bank’s overall portfolio performance in Ukraine during 2022 was far more positive than many of the possible scenarios envisaged at the beginning of the invasion, and attributes this high quality to the resilience of the bank’s business clients. With guarded confidence steadily returning to the Ukrainian business environment, he says there are now signs of increasing demand for financing. “We see more and more customers approaching the bank with requests for investment loans,” says Ponomarenko. “This is a very positive signal for the Ukrainian economy because it means growing numbers of businesses are no longer focused exclusively on surviving and are thinking about expanding.”
In addition to acknowledging the adaptability of ProCredit Bank’s customers, Ponomarenko singles out the National Bank of Ukraine for praise and notes that the dynamics following the full-scale Russian invasion have demonstrated the effectiveness of reforms implemented throughout the Ukrainian banking industry since 2014. He argues that these reforms helped generate a sense of confidence among Ukrainians in the country’s banking system and played a key role in preventing any large-scale financial panic during the first months of the war in spring 2022.
Ponomarenko also references what he regards as the exceptional ability of the Ukrainian public to adjust to the kind of crisis conditions that could be expected to bring many other countries to a grinding halt. “Much like individual Ukrainian businesses, the Ukrainian population as a whole has learned to cope with major challenges,” he says. “After all, the current war actually began in 2014 not 2022, with a significant part of the country directly affected for eight years prior to the full-scale invasion. We also had the global financial crisis of 2008 and the Orange Revolution of 2004. Ukrainian society had been through a number of major crises before 2022; it is now clear that this experience helped foster a high degree of durability.”
In the years leading up to the full-scale Russian invasion, ProCredit Bank’s private individuals’ strategy in Ukraine had increasingly focused on a shift toward e-banking. This emphasis on digital services was to prove extremely helpful in early 2022 when many of the bank’s Ukrainian customers suddenly found themselves in unfamiliar surroundings and heavily reliant on their smartphones. Ponomarenko says the experience of the past eighteen months has confirmed the wisdom of prioritizing digital banking, and vows that ProCredit Bank customers will soon see further improvements to the services on offer.
Ponomarenko’s appetite for e-banking innovation reflects the realities of what is an increasingly demanding domestic Ukrainian market. The comparative sophistication of the Ukrainian e-banking sector is something millions of Ukrainian refugees have become personally aware of over the past eighteen months as they have encountered the often significantly less digitalized banking systems in neighboring EU member states. “Ukraine has achieved a high standard of digital banking, with Ukrainian customers used to a broad range of services that are not necessarily available elsewhere in Europe,” says Ponomarenko. “As a banking institution operating in Ukraine, this makes it challenging for us to remain competitive, but we have ambitious plans in place to maintain the current pace of our digital development.”