Credit Agricole is the oldest foreign bank established in Ukraine. This year, it celebrates quarter-century anniversary of its presence in the country. The bank is one of the TOP-10 biggest banks by the amount of assets, one of TOP-5 most profitable banks and, according to Fitch, holds the highest possible rating among financial institutions. Another special feature of this bank is its unchallengeable leadership in car lending with more than 40% of market share. The bank began to develop this business more than ten years ago and now is seen as the key bank for car owners in the country.
– Roman, which trends do you observe in the car market?
In 2016-2017, car sales increased by 30% in average. Experts predicted +15%-20% growth in 2018 but the market is declining. In 9 months the increase reached 3% year on year. We see several reasons: at first, uncontrolled inflow of vehicles with foreign (Lithuanian, Polish, German) registration, at second, preferential terms of used cars import, as well as expectations of new duties on imported vehicles. In any case, market situation motivates us to be proactive in car lending.
– What has changed in the Ukrainian banking system over the recent years?
Ukrainian banking system is undergoing significant changes. There used to be about 180 banks in the market but today there are almost half as many. Many unreliable banks were resolved. The NBU takes specific measures to enhance the protection of both lenders’ and customers’ rights. Banks regain confidence. They become more open and transparent.
Before loan disbursement, client will be informed on all deal-related expenses and all lending terms and conditions. Such approach contributes to development of confidence. At the same time, the banks have become much more demanding to their borrowers and now consider not only their credit history and solvency but also reputational risks related to customers.
– Do Ukrainians get loans actively again and no longer take them as a negative solution for financial issues?
Taking a loan is a normal worldwide practice of resolving various financial issues: not to make savings for a car, but to use the car now, not to rent an apartment for 50 years but to live in your own property and gradually repay the loan. But there is a saying that moderation is the key. You need to determine how much you can afford. In fact, managers at any branch of our bank can do all calculations and propose the best and the most convenient lending option to the customer. We act as consultants and support for our clients.
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– Who are the major consumers of car loans?
The situation is rather stable in this respect: premium segment is less interested in getting loans than middle. Significant part of car buyers has foreign currency revenues or some currency savings that can be used for purchase of a vehicle. The majority of our customers are men. However, the percentage of female borrowers is continuously growing. It has reached 33% and keeps increasing. We are happy to know that women are not afraid to drive and to conquer the roads.
– Is used car lending a new trend? Why is it profitable and what is the projected growth of such lending?
No, it is not a trend but given potential amendments of the legislation, banks began to consider the possibility of working with this segment. It is difficult to forecast the growth of used cars lending market as it simply does not exist. This is mainly due to the fact that people do not know that banks grant loans for purchase of used cars, though many of them could benefit from a small loan that would allow them to buy a better vehicle.
I believe that the buyers will start considering used car purchase on loan. The current situation is caused by disorganized market often operating beyond the legal field, which is critical for the banking sector.
– Why car buyers choose Credit Agricole? What are your strengths?
There is more than one reason: reputation of the bank, transparent lending terms, comfort and broad coverage. Numerous rewards in car loan nominations of public ratings as well as 50 000 of satisfied customers confirm Credit Agricole’s reputation of a reliable bank. Our bank is the only one in Ukraine to hold the quality assurance certificate ISO 9001:2015 in the area of car lending, and therefore, it can guarantee high-quality services to its customers.
Moreover, our lending terms assume no hidden fees or charges. We propose a fixed rate that remains unchanged over the whole loan period and we discuss all required payments at the loan application stage. We set up partnerships with more than 400 car dealers throughout Ukraine, and our clients can get a loan for most of car makes all over the country.
We would like to believe that our customers appreciate our social responsibility. The bank carries out a wide-scale CSR project «We Care!», which means about 20 good projects per year. One of them – «Tree for car loan» – is very important, in my opinion. Each autumn, the team of the bank plants trees on behalf of the customers who got a car loan. This is the way in which we try to compensate the adverse impact of the increased number of cars on the environment.
Another good tradition is to present 1000 liters of fuel to customers to thank them for their trust and loyalty. Every year the customers whose loans raise the car loan portfolio of Credit Agricole to a billion-fold level receive a special gift – an annual stock of fuel. They are already four, and we are waiting for the next winner, as our portfolio is approaching UAH 2 billion. You still have time :)
Interview by Alina Klimenko.
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