France’s Credit Agricole underlined its ambitions on the Ukrainian market in mid-May with the opening of a new flagship branch in Kyiv that could serve as a model for the bank’s network throughout Ukraine. The unveiling of the branch in the Ukrainian capital’s San Francisco Business Center is another significant milestone in Credit Agricole’s 31-year presence in Ukraine. Larger than existing branches and with an expanded staff of 11, the new venue aims to build on synergies between the bank’s corporate business and private individual banking segments. “This is a pilot project featuring a new concept and a new design. If the format works, we will develop it across Ukraine,” says Carlos de Cordoue, the CEO and Chairman of the Management Board at Credit Agricole Ukraine.
This new Credit Agricole initiative comes at a time when the focus throughout much of the Ukrainian banking sector is firmly on growing the digital segment of the business. For over a decade now, Ukraine has become increasingly known as one of the most dynamic European markets with a reputation for the rapid adoption of new digital technologies. The full-scale Russian invasion in February 2022 has added new impetus to the country’s existing digitalization agenda, with millions of Ukrainians displaced by the war and increasingly dependent on digital solutions for a wide variety of everyday services.
Despite these challenging circumstances, Credit Agricole remains committed to maintaining an extensive nationwide network of branches in Ukraine. “When you look at wartime trends in the Ukrainian banking sector, a lot of banks are reducing their networks. This is not our target,” says Carlos de Cordoue. “We currently have 140 branches operating in Ukraine and have no plans to reduce our footprint, despite the fact that our digital solutions are very popular among clients. In my opinion, that would be a mistake.” Credit Agricole’s CA+ mobile application is used by 70 percent of the bank’s active customers and 97% of the bank’s employees, a clear indication of trust in the product.
Carlos de Cordoue is convinced the most effective approach in today’s Ukrainian banking sector involves striking the right balance between digital convenience and human contact. “Banks need to focus on both digital services and physical branches. The key is to enhance the connectivity between these two complementary elements,” he says. “We believe the human aspect of our relationship with clients remains extremely important. Yes, more and more transactions are now taking place on people’s smartphones, but that does not mean there is no longer a role for branches and face-to-face contact. What if you have an issue? This is why it is so vital to create a model that recognizes the value of the human factor, where the client can connect with someone they know.”
The opening of Credit Agricole’s new Kyiv branch comes again a backdrop of relative economic stability in Ukraine and emerging signs of growth in consumer spending. As one of the market leaders in Ukraine’s car financing segment, the French bank reported a 20 percent increase in demand during the first four months of 2024, with overall car financing volumes climbing to around 80 percent of prewar levels. Carlos de Cordoue says a range of factors are contributing to rising consumer confidence including encouraging economic indicators, accumulated savings, and rising salaries.
In 2024, Credit Agricole confirmed its status as a systemically important and reliable bank according to a series of independent ratings. Credit Agricole’s core business in Ukraine remains the agricultural sector. During the initial stages of the war, the primary focus was on supporting the short-term needs of agricultural clients. Over the past year, the bank has witnessed growing demand for financing for the purchase of farming equipment such as tractors. “We are now starting to look at expanding our support for investment in agricultural infrastructure,” says Carlos de Cordoue. He identifies particularly attractive infrastructure investment opportunities in the green energy sector, which has huge potential in Ukraine and is already on the international radar. Many Ukrainian farmers and agricultural businesses are looking at the possibilities of biomass projects, which represents a promising new field for the industry that will require access to significant financing.
Credit Agricole is also working with Ukrainian farmers on the hot button issue of carbon emissions. With the right investment, Carlos de Cordoue argues, this could be profitable for the Ukrainian agricultural industry. Perhaps even more importantly, it is a factor that has the potential to impact access to future financing and the broader development of the Ukrainian agricultural industry. “We are moving toward an environment where the carbon footprint of clients will feature in all credit agreements, so we would like to help introduce this practice in Ukraine. This issue is something new for farmers all over Europe, and Ukrainians are very open to new things,” he notes.
Carlos de Cordoue is a vocal advocate of investment opportunities in Ukraine. “Credit Agricole Ukraine has reported a net financial result of UAH 2 billion in the first quarter of 2024. Our bank generates profit which we keep here to reinvest in Ukraine,” he says. “Thanks to the stability and expertise of the bank, we offer our clients daily support and help them plan and develop projects even in wartime conditions. Additionally, since the war broke out, we have allocated UAH 123 million to charitable causes.”
Carlos de Cordoue is already preparing for the bank to play a part in what is widely expected to be one of the biggest reconstruction undertakings in modern European history. This includes expanding cooperation with international financial institutions in order to increase capacity. “The first thing we need to be aware of is that the Ukrainian banking system in its present form is far too small to support the coming reconstruction,” Carlos de Cordoue says. “This means much will depend on external financing, which is why we are looking to explore new partnerships with international financial institutions. By developing risk-sharing capabilities, we can potentially double our capacity.”
With Ukraine’s ongoing European integration very much in mind, Credit Agricole is also currently working on a new initiative to support cross-border investment and economic cooperation between Poland and Ukraine. Carlos de Cordoue explains that the bank is taking advantage of its presence in both countries to build a team of Polish and Ukrainian colleagues. They will work together to offer a range of financial tools and support services tailored for Polish companies seeking to enter the Ukrainian market and Ukrainian businesses looking to establish a presence in Poland. “This is a real startup,” says Carlos de Cordoue. “It is not yet a large-scale initiative, but it is a beginning.”