ProCredit Bank’s 20 Years in Georgia – the Advantages of Being a German Bank in the Georgian Financial Sector
20 years of banking experience, 100% German capital, the highest credit rating in the Georgian banking sector, environmental friendliness and a focus on small and medium sized business development – these are only some of the core values of ProCredit Bank.
The bank is celebrating its 20th anniversary this year and, yet again, promises its customers technological innovations in the banking sector, a stable environment and flexible services.
We sat down with Ketevan Khuskivadze, Director, to discuss ProCredit Bank’s future plans and strategies.
- ProCredit Bank has the highest credit rating in the Georgian banking sector, and has consistently ranked fifth among banks. In the face of current challenges, how do you manage to achieve such a strong performance?
- Financial stability is a significant aspect that has distinguished ProCredit Bank from other banks throughout its 20-year-long history. Even during the financial crises, the bank has managed to achieve its strategic plans and maintain strong financial performance. Our bank is not characterized by volatility, which is important to our customers as financial stability is one of the main aspects that customers consider when choosing a banking institution. In 2019, ProCredit Bank was assigned BB+, the highest possible rating in the Georgian banking sector, by Fitch, which is an upgrade from the last year’s BB rating by a notch. I think it is a further testament to our financial stability and we are happy to observe the bank’s growth according to our strategic plan year after year, to have customers’ trust and, hopefully, to be an interesting partner for potential customers as well.
Your ranking is an obvious advantage, but what exactly differentiates you in the market?
- I believe it is our international experience. ProCredit Bank is part of the international ProCredit Group, the only bank in the Georgian banking sector with a 100% German capital; therefore, it has played a central role in the success of our bank and our local practice of the past 20 years. International experience is one of the driving forces behind our financial stability and progress. It is manifested in our relationship with customers, one of the most important and defining factors being responsible banking, more specifically, responsible lending. As soon as we appeared on the market, we adopted an individual approach to our customers, identifying their banking needs and offering them tailored services. We believe that a bank is only as successful as its customers, and for a customer to be successful, they should be offered the right services. The banking regulations have recently made responsible lending a priority, but this is not news for us at all - we have been lending responsibly since the bank was established 20 years ago.
In the 20 years of the bank’s existence, what were the major stages you have gone through?
- One of the most important success factors is our team, the people who communicate with customers and represent the bank, otherwise the bank would be an abstract concept for customers. We invest extensively in the development of our staff, including professional development trainings both locally and in ProCredit Academy (Furth, Germany), which hosts two long-term courses, the Banker Academy and the Management Academy. Additionally substantial investments are directed to training and integration of new hires.
Besides, ProCredit Bank prioritizes its workplace culture – the bank has a flat organizational structure so that employees feel they are in a welcoming environment that supports healthy relationships and professional development. It is important to have a transparent communication with customers and provide them with easy-to-understand banking offers. What makes ProCredit Bank special is that we focus strictly on the banking business, we don’t have any related companies, nor do we intend to expand into another business.
If we were to identify the major stages of our 20-year long operation, at the initial stage, we concentrated on availability and simplicity of banking services, contributing to a better financial awareness of the general public. Apart from commercial interest, we are driven by willingness to support development of the environment we operate in. At the next stage, we focused on the segment of small and medium businesses that create a large economic value and make a vital contribution to the development of the country. In addition to businesses, our target audience includes employed private individuals. We offer them a set of banking services based on the principle of technological banking. We plan to increase our focus on the private individuals segment and grow our share there.
It’s been a while since new lending regulations became effective. What threats do you think the regulations have removed from the banking sector and what new risks have they introduced?
- Responsible lending has been our way of doing business for 20 years, so regulations have not really affected our focus or our portfolio. As for the banking sector’s performance, we have observed some growth in 2019 but not as aggressive as it was prior to the regulations. The regulations might have negatively influenced business customers but it is going to balance out in the long run.
- In the era of digitalization, electronic banking services are becoming increasingly important. What service do you offer to customers and what are your plans for developing remote channels?
- Today, digitalization is not prevalent in the banking sector only, it is becoming increasingly relevant elsewhere. In recent years, we have been thinking of new ways of making our service more accessible, faster, simpler and easier to understand for customers. Digitalization is one of the channels in today’s world that allows these four objectives to be better achievable in the banking business. These services demand plenty of resources, though, both human and financial.
Our customers can receive full-scale banking service in one space. We are continuously developing - improving, simplifying, refining - our internet banking service but we remember that we should never compromise security for the sake of service improvement, thereby achieving the right balance between the two. I would like to emphasize that years ago we were the first to introduce cash deposit machines and the so-called drop boxes, which are very popular with our customers, as this is the space where they can receive a banking service in a safe environment without having to stand in a long line. As for the future, banking is a dynamic sector, so ProCredit Bank will offer more innovative products to customers and we are planning to officially present them soon.
Environmental protection has been the Group’s main priority. What sustainability initiatives should we expect from you?
- Environmental protection is an important part of the bank’s strategy as demonstrated in our day-to-day business. In terms of green efforts, I would like to emphasize the bank’s direct and indirect impact on the environment. Firstly, it is the infrastructure of the bank: environmentally friendly equipment, constant growth of the share of electric vehicles in the bank’s car park, reasonable use of resources, waste segregation and many other initiatives or endeavors aimed at raising awareness and reducing our environmental footprint. We are the only company harvesting rain water for further use. We have installed a water reservoir in our head office for this purpose. This year, we are also going to launch a solar station project in order to generate electricity from a renewable source.
As for the indirect impact of ProCredit Bank on the environment, it is manifested in supporting green financing and is more far-reaching. We seek to reduce social and environmental risk for customers and assess this risk when attracting new customers. If we see that the social and environmental risk is high with no prospect of improvement, we refuse to cooperate – I think our role here is vital. We have certain standards that the target groups are supposed to live up to if they are to cooperate with us. 16% of our portfolio is green, amounting to 50 million euros, and we are planning to increase it constantly. It means that the society is advancing in terms of raising environmental awareness and taking specific actions towards more environmentally friendly activities and more efficient business investments.