How Ukreximbank supports domestic companies and priority projects in various industries.
Semen Puskay, Director of the Department of Medium Business, Municipalities and Communal Sector at Ukreximbank
Business needs financing now more than ever. The deficit of working capital in enterprises is huge, and in the current conditions, only a few can afford to develop large-scale projects in which profits must be reinvested. External negative factors such as shelling of infrastructure and regular blackouts are superimposed on this.
However, companies have rather limited access to loan resources. Most banks issue loans exclusively within the framework of preferential government programs, such as “5-7-9”. But they cannot completely cover all financing needs.
Exporters feel the lack of money especially acutely. They are not only forced to maintain a stable production cycle and logistics at any cost, but are also bound by strict obligations with foreign partners, a break in relations with which threatens to completely stop business.
However, not all banks have curtailed financing programs. For example, Ukreximbank continues to actively develop corporate lending, supporting both large businesses and SMEs.
Operational sustainability and programs of international partners
The experience of Ukreximbank is actually indicative. Despite the war and all the risks associated with it, he remains the largest creditor of the Ukrainian economy. Ukreximbank is a leader in the volume of business lending and provision of structured and trade financing. Its market share is 14%.
How does the bank manage to achieve such results? The foundation for this was laid back in 2019, when the successful reform of the corporate governance system of Ukreximbank took place. Its result was the arrival of a new supervisory board, which, together with the board, was able to “clean up” the portfolio of problem loans and bring the bank into profit.
In addition, the business model and development strategy of Ukreximbank envisages its concentration on lending and comprehensive financial support of the corporate sector. And, most importantly, all this with the participation of international financial organizations (IFIs) within the framework of multilateral cooperation programs.
Thus, the bank entered the “military” year 2022 with a substantial reserve of liquidity. In particular, for 2021, Ukreximbank received a record profit of UAH 2.7 billion. For January-September 2022, the bank’s operating profit and interest profit each amounted to UAH 3 billion, and net non-interest income increased by 51% to UAH 2 billion.
At the same time, Ukreximbank not only did not stop, but also expanded its partnership with MFIs. Bank clients can still receive funds under programs financed by the International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), and others.
“Targeted programs in cooperation with international partners give large companies the opportunity to attract funds on more favorable terms than the market offers today. And small and medium-sized businesses can take advantage of grant programs, which greatly simplifies access to money for entrepreneurs and small companies.”– comments Semen Pushkaydirector of the department of medium business, municipalities and communal sector in Ukreximbank.
A bank that will not let you down
The experience of Ukrainian companies cooperating with Ukreximbank once again proves how important it is to have a reliable financial partner in the current difficult conditions. Here are some examples of projects that businesses that have used the bank’s credit and other programs have been able to implement over the past year.
The Goodgrainoil company, which is one of the largest exporters of agricultural products in the Kirovohrad region, increased its fleet by four new trucks in 2022 thanks to a joint credit program with Ukreximbank and the EBRD. In addition, Ukreximbank and EIB opened a credit line for Goodgrainoil to replenish the company’s working capital.
“Thermoplast” company, which since 2007 has gone from a small enterprise to one of the recognized leaders in the field of metal-plastic structures and the production of entrance metal doors, has been cooperating with Ukreximbank for 8 years. “Thermoplast” regularly receives financing from the bank both to support working capital and to invest in fixed assets.
“Today, Ukreximbank fully meets our requirements, in particular regarding servicing export-import contracts and financing business needs. I especially want to note the extremely important support from the bank, thanks to which our company was able to timely fulfill the order for the restoration of the infrastructure that suffered as a result of Russian aggression in Kyiv, Vasylkiv, Buch, Gostomel, etc.– says the co-owner of “Thermoplast” Yury Chygrin.
In December 2022 of the current year, despite the state of war, Ukreximbank provided the company “S-Engineering”, an EPC contractor in the field of automation and power supply of industrial enterprises, with financing of current activities under the state program “5-7-9”. This gave the company the opportunity to continue its activities in the energy sector, which is critically important for the economy of Ukraine. In particular, this is the restoration of damage and destruction caused by shelling.
Another landmark project is the bank guarantee provided by Ukreximbank at the end of 2022 to the Tatra-Yug group of companies. This is a large Ukrainian manufacturer of LRV trams and equipment, which is an ideological follower of the world’s largest Czech tram production enterprise “Tatra”. Thanks to this guarantee, “Tatra-YUG” delivered 13 new multi-section articulated trams with a low floor for Odesa. EIB loan funds within the framework of the government program “Urban Public Transport of Ukraine” were also involved in the financing of this agreement. By the way, “Tatra-YUG” has been served by Ukreximbank since 1994, that is, from the beginning of its foundation.
“We understand how important it is now to support export-oriented companies and industries. After all, the financing provided by Ukreximbank, even under martial law, allows Ukrainian manufacturers not only to preserve their business, but also to develop and scale it.”– notes Semen Puskay, director of the department of medium-sized business, municipalities and communal sector in Ukreximbank.
Primary source: Mind.ua
