Mr. Reichardt,AccessBank has been operating in Azerbaijan since 2002 and has been in the top five leading banks of Azerbaijan. Which events, that took place in the world financial markets, had the highest impact on the banking system of Azerbaijan and your bank?
Rolf Reichardt, Chairman of the Management Board (CEO), AccessBank:Here I would like to mention the global financial crisis of 2008, which of course affected the banking sector in Azerbaijan. At that time AccessBank remained the sole bank in the market which continued providing loan products. The main outcome was our increased market share in business lending and AccessBank is keeping its strong position among leading Banks up to date.
The main trigger in the recent years has certainly been the sharp oil price decline in 2014/15 which caused the strong devaluation of the Manat. The devaluation in turn hit the banking sector very hard as bank clients struggled repaying their USD loans where the repayment burden increased about 2 times from AZN perspective and income suffered from higher import prices. Fortunately, the situation has stabilized along with a stable FX rate since a year ago.
What could you tell about your short-term and long-term plans?
Rolf Reichardt : We have a very positive outlook for this and further years. We were very pleased with our growth of business lending end of last year and we look forward to further increases this year. Seeing a growing demand for digital banking products in the country, the Bank plans to further enhance its online banking services. With offering a large number of new and very attractive features in online banking for our clients in the next 12 months, AccessBank aims to be among the leading solution providers for its clients in Azerbaijan.
At the same time, we spent much effort last year to increase our cost efficiency so that we can offer better services at lower costs to our clients. Here we have made great progress but we still have some work ahead of us in 2018.
Which economic sectors of Azerbaijan do you find the most effective?
Rolf Reichardt: I see a big potential in development of the non-oil sector in the country. When I look at Azerbaijan’s rich variety of different climate zones, I also see huge potential to develop the agricultural sector further into export industry. I do not only mean the very tasty tomatoes and pomegranates but rather high-end products for the food industry. Tourism is another quick-win. A positive growth in this sector can already be observed. I can also highlight the country’s free trade zone and industrial parks as another attractive sector for investment where foreign investors particularly show growing interest.
According to the data of the rating of the social-economic development of the regions, there are just 2-3 branches of the banks operating in several big regions of our country. How is it possible to correct this situation?
Rolf Reichardt : Banks usually follow business. So if the regions offer growing business opportunities, banks will show more presence. Since our Bank’s core business is with firms and farms of different sizes, we do already have a relatively high share of branches in the regions. However, we must also be aware of change. The younger generation grows up with smartphones which can be seen as their home branch in future times. So overall I would not expect too much growth of branches anymore.
Do you think that AccessBank will withstand the competition if the representative offices of the western banks open in Azerbaijan?
Rolf Reichardt: We do not expect any conflicts with our core business and we are happy to cooperate with such representative offices wherever it would benefit clients.
Do you plan to extend your business in the world markets? What is hindering it now?
Rolf Reichardt: Our Bank benefits from its partial ownership by AccessHolding which has banks in many countries world-wide which recently included Georgia with Credo Bank.
Did the dynamics of services, provided to the population, change over the past three years? Do you believe that it is still possible to regain the trust of the population to the banking system? Do you have a formula for that?
Rolf Reichardt: We see more non-cash transactions thanks to legislative changes which we welcome as this supports the development of digital banking services. Regarding the trust, I am confident that banks can improve. The formula is quite simple: be transparent from outside for your customers and from inside for prudent risk management. But I should also mention that the FMSA makes great strides towards prudent banking which is beneficial both for the banking sector and for its clients.
The authorized capital stock of the bank increased up to 140 mln manats in 2017. Which factors caused the growth?
Rolf Reichardt: There are 2 factors. First, we increased our capital so we can offer USD loan clients longer repayment periods who suffered from devaluation. Second, we needed more capital for growth of lending activities. Actually, we prepare for another capital increase this year sufficiently large not only for current business but also for further growth of business in the near future.
A number of foreign banks have started offering digital banking services recently. Which innovations does AccessBank plan to offer its clients?
Rolf Reichardt: First, I would like to mention that we timely invested to our IT infrastructure in past years in order to keep pace with innovations in the banking sector. Today our Bank provides different innovative solutions to clients via its competitive e-banking service - myAccess. Now 72% of all client transactions go online. We highly appreciate our clients’ time, thus, a further expansion of our digital services will remain a priority for AccessBank.
Furthermore, we invest in modern technology so that we can offer new products much faster than in the past.
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