Kyrylo Shevchenko: Ukrgasbank has Best Managers in Ukrainian Banking

Ukrgasbank ended the third quarter of 2017 with 250 million UAH in profits. The entire outgoing fiscal year promises to be successful. As a comparison, in 2014, losses amounted to 2.8 million UAH, and the first quarter of 2015 was also commercially unfeasible. But then we began to rise from the ashes. According to the results of the stress test, starting from 2016, Ukrgasbank no longer requires additional capital investments. The specialists whom Kyrylo Shevchenko, the renowned Ukrainian banker, brought along to the bank took this financial institution from making a loss, and made it profitable. 

He shared his secret of success: “We have completely changed the managerial team and created the best team in the banking sector of Ukraine.” 

The office of Kyrylo Shevchenko, who holds the position of CEO, is situated in the main office of the former Kyiv Bank that was merged with Ukrgasbank in June 2015. At first, it had a luxurious interior: gilded furniture, velvet chairs and carpets. The journalists thought that it reminded them of former prosecutor-general Pshonka’s country house. However, this office was inherited by Kyrylo Shevchenko from his predecessor, the Head of the insolvent Kyiv Bank. Many things have changed in the bank since that time, and now it fully corresponds to the changing times. 

The large-scale transformation process took place not only in this particular office, but also in the entire Ukrgasbank. Kyrylo Shevchenko, who was a newly appointed CEO, initiated all these changes in the spring of 2015. He paid plenty of attention to reorganizing the branches of Ukrgasbank as well as ‘green banking’. 

Kyrylo Shevchenko reckons that it is unacceptable to work in 2017 in the same the manner as 1995. Technology is changing with the speed of light, that’s why clients are in the need of new banking products. Back in 2015, Kyrylo Shevchenko organized joint cooperation between Ukragasbank and BNP from Paribas. He is certain that in the future, Internet-banking will be able to pose competition to Privat24, or even surpass it in terms of functionality. 

According to Kyrylo Shevchenko, the increase of the loan portfolio by virtue of the program of “warm credits” created by the Cabinet of Ministers of Ukraine, is an equally important direction of the transformation of Ukrgasbank. All national banks of Ukraine, including those that were recently nationalized, participate in this program. 

“Speaking of housing cooperatives, we are the leaders in terms of the number of issued loans, because each week we are allocating funds for the insulation of houses, installation of heating meters, new boilers and for other problems that concern the improvement of energy efficiency in residential buildings”, says Kyrylo Shevchenko, CEO at joint-stock bank Ukrgasbank, “In terms of labor costs for our team, the issuance of loans for 5 housing cooperatives can be compared to the issuance of a 1 billion UAH loan to a large corporate client.” But as a national bank, our business must be socially responsible. 

Ukrgasbank actively works with individuals, normal Ukrainians, in the framework of the “warm credits” program. Kyrylo Shevchenko says that the bank that was entrusted to him issues more than 250 million UAH in loans on the annual basis. It is around 1 thousand loans per week! 

According to data that Kyrylo Shevchenko has in his possession, since 2015, the number of deposits in Ukrgasbank made by the general population increased by approximately 50% per year. The total number of customers increased by 80 thousand. This includes individuals and representatives of small and medium-sized businesses. Although the loans are issued mainly to long-standing customers, or to those who have used the services of other financial institutions but could not get a loan. The stakes are traditionally high, as well as throughout Ukraine, since the competition in this banking sector is still low. 

"Not every business is capable of paying high interest on loans. Large agrarian enterprises and construction holdings from the capital city are mainly those that can afford it. We work with ZIM CAPITAL GROUP, Ukrstroi, and Kyivgorstroi, the Trust Zhilstroy-1 from Kharkiv, which are gradually increasing the volume of development works. However, new businesses were yet to inquire about our services. Unfortunately, the percentage of the refusal of loan issuance in the sector of small and mid-sized business is rather high”, admits Kyrylo Shevchenko. 

Ukrgasbank will not give loans without making serious considerations as, since 2008, many financial establishments in Ukraine suffer from debts on problem loans. A number of them became insolvent and were deprived of their licenses. According to the NBU, only in 2016, the total amount of overdue debts in Ukraine exceeded 500 billion UAH, and this is 25% of the GDP of our country. Among them, there are debts for loans issued in the Crimea, Luhansk and Donetsk regions. Certain financial analysts believe that the amount of problematic debts in Ukraine amounts to 1 trillion UAH. That’s why they even suggest establishing the "bank of bad assets", but so far this has not happened. 

Meanwhile, over the past three years, Ukrgasbank, headed by Kyrylo Shevchenko, disbursed money to depositors of 46 banks that went bankrupt, including DeltaBank. It was not a random choice because the Deposit Guarantee Fund chose the national bank for this particular purpose, in order to not let people be fooled once again. 

"It was important not to let the money of the depositors of the liquidated financial institutions vanish for the second time. After these payments, we managed to keep around 40 to 70% of Deltabank's clients, and we were satisfied with this indicator, "says Kyrylo Shevchenko, CEO at JSB Ukrgasbank. 

After the acquisition of the Kiev bank, 70% of its customers, half of which are individuals, agreed to be clients of Ukrgasbank. Kyrylo Shevchenko admits that the negotiations concerning this deal lasted for two months. there was plenty of bargaining and settling of all the figures, though the actual acquisition was carried out in just one night. The assets of the Kyiv bank were small, no more than 1 billion UAH, that’s why they didn’t exert any significant influence on the balance of Ukrgasbank. 

However, there were also some serious losses that were primarily associated with the occupation of the Crimea, Luhansk and Donetsk regions. Kyrylo Shevchenko says that Ukragasbank experienced the biggest losses in Eastern Ukraine. Only 3 representative offices remained in the Luhansk region instead of 17, the same amount of offices are operating in the Donetsk region, though all of them are profitable. That is why Kyrylo Shevchenko expresses his gratitude to the teams that work in these offices for their hard work even during the ATO. He greatly values and respects such specialists. 

According to Kyrylo Shevchenko, since 2009, more than 13 billion UAH has been invested in the stability of Ukrgasbank. The Government will be able to get the money back after the sale of JSB Ukrgasbank. The negotiations regarding this matter were conducted even in 2015, but their details were never disclosed. Kyrylo Shevchenko admitted that the main objective of his team is to prepare Ukrgasbank for the future sale, and they are ready to carry out this task with dignity in order to bring a billion UAH back to the state budget. 

Kyrylo Shevchenko says that, over the last few years, the banking market in Ukraine underwent great changes and became more segmented. Many financial institutions are focused on specific sectors of the economy; this is not only the imperative of our time but also one of the conditions for survival and development. His bank chose the sector of small and mid-sized business of Ukraine. 

Kyrylo Shevchenko also says that Ukrgasbank currently issues thousands of loans per year to individuals for the purchase of cars and real estate (a very profitable mortgage at 5% per year), installation of solar batteries and heat pumps. Only in October 2017, Ukrainians received more than 100 million UAH for these expensive purchases. 

In this financial institution, which Kyrylo Shevchenko has been managing for more than 2 years, it is possible to make a deposit or obtain a salary or pension bank card in a prompt manner and on favorable terms. Kyrylo Shevchenko also provides an opportunity to get involved in charitable actions, like getting a fan's card and supporting the Ukrainian national football team, or make a deposit called "Bereginya", and transfer 1% of annual income to orphanages in said region. Bank services are available in different parts of the country, since there are 240 operating offices. Most of them are located in Kyiv (43), Odesa (15), Lviv (13), Dnipro (12), Vinnytsia (11) and Kharkiv (10). 

Ukrgasbank is actively cooperating with the representatives of Ukrainian business; for instance, small and medium-sized companies can open accounts for free and then pay the minimum service fee (from 30 UAH/month). According to Kyrylo Shevchenko’s information, compared to 2016, the number of companies that chose to cooperate with his financial institution increased by 50%. 

Kyrylo Shevchenko says that one can get a unique loan to purchase the Belorussian transport equipment; the interest rate on this loan starts from 9%, while a certain part of it will be compensated by the Government of the Republic of Belarus. In the SME sector, Ukrgasbank supports activities in the area of energy saving and energy efficiency. Moreover, the mechanism of financing of eco-projects was developed in cooperation with the International Finance Corporation (IFC). 

In the face of the economic crisis in Ukraine, Kyrylo Shevchenko propagates green-banking because he considers it to be the financial instrument whereby it is possible and necessary to save human lives. Our country is capable of producing up to 74% of renewable energy, but so far, this figure does not exceed 1.2%. Kyrylo Shevchenko believes that climate investments will be able to influence the negative consequences of global climate change. This problem concerns mankind as a whole. At many international forums, Kyrylo Shevchenko often says that Ukrgasbank is prepared to become one of the green banks and join the international organization called GNB (The Green Bank Network). It will allow the bank to participate in more programs for the enhancement of ecology in Ukraine. 

For reference. JSB "Ukrgasbank" is among the 5 largest banks in Ukraine in terms of assets (65.7 billion UAH). In the second quarter of 2017, it became 19th place out of the 93rd in terms of net profit. After nationalization, which occurred in 2009, the bank is fully owned by the state and is managed by the Ministry of Finance of Ukraine. In May 2015, Kyrylo Shevchenko was appointed the head of the board of JSB Ukrgasbank