The FINANCIAL — KSB Bank increased its retail credit portfolio by 22% in 2014. Bank has completed its management reorganization and built up a team with over 20 years of experience in the sector. Consumer loans, SME and agriculture will be the main fields targeted by the Bank during 2015. The Bank will soon be offering special products with an individual approach for its customers. The increased awareness of customers about banking products is what drives and encourages the sector to express flexibility in line with their growing demands.
“2014 has been a year of significant and positive changes for KSB Bank. Owners and managers have carried out some of the most important and large-scale investments in human resources. The current team of the Bank is composed of professionals. The top management that presently leads the Bank has more than 20 years of experience in the banking sector. Changes were carried out on the level of managers and branches. It is a prerequisite and guarantee that amendments will be made to offer products and services that will be interesting for customers,” Zurab Kartsivadze, Head of the SME and Retail Division at KSB Bank, told The FINANCIAL.
“The retail loan portfolio enlargement by 22% in 2014 is particularly important and valuable as it was achieved in parallel with reorganization processes. We achieved success also in the corporate segment. We have been cooperating with the subsidiary companies of leading market players. Currently parent companies have also started expressing their interest. The list of our corporate clients includes: the Public Broadcaster, Border Police, Prosecutor’s Office, leading universities and schools from the educational sector as well as commercial structures. This means that our product packages and services were properly selected and have been welcomed by both the retail and corporate segments,” Kartsivadze said.
Q. How do you determine which product to offer to your customers?
A. We accurately study consumers’ demands while implementing any new service or product. Low interest rates still head the list of the top priorities of lenders. Studying the exact time and season when to make a new offer is very important. In general, consumers’ behaviour changes at the end of the year, as they start spending more. In our new product- 3D Promotion to Consumers – we took into consideration Georgian traditions. We allowed them to continue the celebration of festivities during the whole of January and start meeting responsibilities after three months. So, they borrow in 2014 and they pay back in 2015. Moreover, when we saw a big interest from customers we brought in a new offer. KSB Bank reduced the interest rate on credit cards by 9%. Currently it amounts to just 20%. This is a very competitive rate for the market. Consumer demand has always been our target and we will remain focused on this direction in the future.Customers are a guarantee of our success. Accordingly they are the only ones who dictate to us.
Q. We see various social promotions advising citizens to become more cautious towards banking loans. Have these campaigns brought about any results, and can you say that consumer behaviour has changed recently at all?
A. It is interesting to note that consumer habits towards the banking sector have actually been changing recently. They have elevated. This puts further responsibility on the sector. If you do not provide more sophisticated and valuable offers to customers then they will choose your competitors. Clients tend to be more aware of banking products now. They are fully aware of the conditions of various products. It is quite interesting for the sector as well. Consumers are getting detailed information regarding the terms and conditions of products in the sector.
Q. According to recent research conducted by The FINANCIAL, KSB Bank offers one of the lowest interest rates on consumer loans. How realistic is maintaining this rate at a stable level?
A. Within our 3D promotion we offer consumer loans at 12.9%. After doing a market description we have decided to leave this rate as a standard term during 2015. This will help us to gain a competitive advantage on the market. Interest rates offered by our competitors for consumer loans are mostly linked to the term of the loan. That means that the longer the term is the more the rate is. According to the market research the average term on consumer loans is 3-4 years. In this range we have one of the most attractive offers. In addition, we will be offering new promotions on the market each season. All our offers will be in line with consumers’ demands and specifications of the season.
Q. Why can’t the Georgian banking sector offer long-term loans?
A. The average term of a mortgage loan in Georgia is 15 years. We used to find loans with longer-terms, up to 25 years. However, they did not work out in our experience. The reason was that the difference in the monthly payment was insignificant. In this case borrowers became permanently reliant on the bank and the reduction of the end sum remained almost unchanging.
Q. Which are the topmost prioritized sectors for you to finance?
A. We are still in the process of establishing a new strategy. However, financing SMEs will be one of our main priorities. In this regard we have gathered a team of experts. We will introduce interesting products to the market soon. KSB Bank will meet all the demands of this segment. Their main demand from the banking sector was to offer individual approaches. The market was saturated with standard products. Due to their business SMEs have their individual specifications. The basic outline of our product was based on these specific features. Representatives of the SME sector are too sensitive in regard to time. They want to receive decisions from our side in a very short amount of time. KSB Bank has taken into account all of their requirements. And they will soon be able to try them out in our products.
Q. We hear a great deal regarding the importance of SMEs. Meanwhile, their scale in the country still remains small. Which innovative products will you beoffering for them specifically?
A. The SME sector is one of the main challenges for the country’s economy. Due to its scale, Georgia will not become an industrialized country. Accordingly, the SME sector is a major driver of the economy. In this regard, there are a number of state programmes directed at stimulating the sector. However, there are still no tangible improvements. SME will be one of the most prioritized directions for KSB Bank in 2015. The existing challenges are what we want to respond to. We are preparing seriously for this. We have gathered an expert team. Together with them we want to establish a proper service model. We do not want to talk with them via standard template conditions. Our offer will be focused on bringing maximum benefits to them. KSB Bank is eager to establish long-term relationships with the representatives of SME. They will have a long-term partner in us. We will start communication with them through our new products from the first quarter of 2015. This sector has great potential for development.
Q. Agriculture has been named one of the most prioritized sectors of the new government. How do you rate the potential of this sector?
A. During the last two decades, agriculture remained at the homestead level. Nothing was happening. In fact, ‘agriculture’ did not exist at all. The project initiated by the Agency of Agriculture, which was started 2 years ago, was focused on the reanimation of this sector. It has appeared to be quite effective. We are already seeing some of the results in this direction. Considering the perspective of the field it will soon need the big support of the banking sector. The recovery of agriculture has become particularly timely since signing the AA with the EU. We are actively involved in the support of the sector initiated by the Ministry of Agriculture. In this regard we have issued 73 loans, worth over GEL 7 million. We are now in the process of acquiring expertise. We have to compose our team of experienced personnel with proper knowledge of the field. Agriculture which is in the process of revival cannot be estimated by a credit officer working on consumer or business loans. Agriculture has its own specificity that needs to be understood. We see huge resources in this sector.
Discussion about this post