How is the bank investing in more competitive IT platforms?
Over the past year we have launched our mobile application processes in three different languages. We are continuing to develop internet banking for both the retail and corporate segments, working to better deal with foreign exchange. From a customer standpoint, it can be difficult to constantly adapt to updates to our online systems, so we are pushing our clients to learn how to efficiently utilize these platforms.
What is the ratio of retail banking in Eurasian Bank's portfolio?
Retail banking represents 50% of our loans and our business. However, by no means are we a retail bank. I do not like to use the term universal bank because we are too small for that, but we do actively tailor our business to smaller companies as well as retail. There is a great deal of synergy between these two areas. The government is working towards accelerating the growth of SMEs, which they consider to be a driver for the development of the national economy.
How is Eurasian Bank supporting the development of new business activities in Kazakhstan?
To be blunt, small and medium-sized businesses are not my favorite category of business. There is still a long way to go in terms of both transparency and information. There are credit bureaus for retail and corporate banking has audits, yet with SMEs there is nothing. There are financial statements, but these take on many different forms, and trying to understand the true economic picture of cash flows and collateral is difficult. This means we have to spend a lot of time on each individual customer, despite lending sizes being smaller. It is always a question of resources, time, knowing your customers, and working with them to understand where their sales come from. It is a critical part of what we do, and is one of the more difficult aspects of our work. The fact that the government has been supportive of the DAMU Fund certainly makes it feasible, but there is a long way to go in terms of how to raise the transparency of those SMEs further. There are also a number of requirements when working with the government for those companies, and these sorts of additional requirements need to be factored into any decisions we make.
Can you elaborate on your strategy for consolidating your presence and widening your market share?
We are constantly evaluating the effectiveness of our actual physical network, but we believe we are where we need to be. There are always a few more places we could open in and a few places that did not work, but the main challenge is to continue to bring more business through, as this means more profits and capital. After that we need to figure out how to distribute better and decide on the best channels for reaching the population and our clients. For companies this usually involves relationship managers, but with people it involves internet lending and our centralized call centers and telesales processes.
The Eurasian Economic Union is being established in 2015. Has this in any way impacted the amount of transactions you do with either Belarus or Russia?
We have a bank in Russia and have just opened an office in Novosibirsk. Next month we are opening an office in Omsk. We are not trying to compete against major Russian banks, but are rather trying to look at cross-border trade. It is extremely early in the process, and it is clear that it will affect our business considerably, but with everything that is happening in the Russian economy and broader regional economic problems, it is not certain how it will play out.