JSC OTP BANK, as part of a joint program with the European Bank for Reconstruction and Development (EBRD), offers small and medium-sized enterprises (SMEs) investment loans to support their business in times of war with the possibility of compensation for part of the costs financed by the Bank’s credit facilities. The parties have recently signed a new cooperation agreement that will allow OTP Bank to provide EUR 120 million of financing to the Ukrainian private sector with the participation of the EBRD through a 50% credit risk coverage instrument on a portfolio basis.
“This program is, in fact, a successful expansion of the previous cooperation with the EBRD, which was in great demand among our clients, and is aimed at supporting such critical industries as agriculture, production and trade of essential goods, logistics services and others. Thanks to this lending instrument, companies are able to continue their operations, develop and ensure the availability of goods and services to the population,” said Natalia Kondratchuk, Head of Corporate Finance Department of OTP Bank.
“Such loans under portfolio guarantees can be used to support long-term investments of SMEs in green technologies (modern agricultural machinery and other energy-efficient equipment, solar panels for power plants to meet their own needs) that meet the standards of the European Union and will help increase the competitiveness of enterprises in domestic and foreign markets. After the investment project financing is implemented, SME borrowers will be able to apply for investment incentives (cash compensation, cashback) provided by the EU under the EU4Business initiative.
The amount of compensation depends on the type of assets acquired and the complexity of the project and can be up to 15% of the amount of loan funds received. Reimbursement is made in euros after documentary evidence of the intended use of funds by the SME borrower and verification of documents by the European Bank for Reconstruction and Development.
The signed agreement is a continuation of the cooperation between the EBRD and OTP Bank in supporting Ukrainian business, which began in 2022. One of the components of this cooperation is the implementation of a program to increase the competitiveness of small and medium-sized enterprises in the EU’s Eastern Partnership countries. Since the beginning of the full-scale war, the total amount of new financing from Ukrainian banks, supported by similar EBRD guarantees, reached about EUR 900 million as of the end of 2023.
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JSC OTP BANK has introduced a new service – sale of domestic government bonds from its own portfolio in the OTP Bank UA application. From now on, customers have the opportunity to purchase domestic government bonds at any convenient time, regardless of the date of the Ministry of Finance of Ukraine’s auctions.
“The new functionality opens up even more opportunities for investing in government securities, as well as allows you to choose the optimal bond rate and maturity. The service is already available online to all individuals who have opened a securities account in any branch of the Bank,” said Valeria Ovcharuk, product owner of OTP Bank.
According to her, the process of buying government bonds is convenient and fast. “The OTP Bank UA app offers an easy interface for purchasing government bonds. Just a few clicks and the securities are in your bond portfolio. It is a reliable and profitable investment in the future, as the repayment of domestic government bonds is 100% guaranteed by the state,” emphasized Ovcharuk.
Investing in domestic government bonds is not only an opportunity to support the financial stability of Ukraine in times of war, but also a good opportunity to diversify your savings and receive additional income in both hryvnia and foreign currency.
Last fall, OTP BANK opened the opportunity to buy domestic government bonds directly at auctions of the Ministry of Finance through the OTP Bank UA application. During 2023, the Bank’s customers purchased domestic government bonds for a total amount of UAH 6.3 billion in equivalent, which is 153% more than in 2022.
As a reminder, in 2023, OTP Bank was ranked fourth among Ukrainian banks in the overall rating of primary dealers, according to the Ministry of Finance of Ukraine.
The status of a primary dealer provides the exclusive right to participate in the placement of domestic government bonds conducted by the Ministry of Finance, both on its own behalf and for clients of individuals and legal entities, as well as banks and financial companies that do not have such a status.
To learn more about investing in domestic government bonds through the OTP Bank UA app, please follow the link.
The net profit of OTP Bank (Kyiv) in January-March this year amounted to UAH 1.56 billion, which is 7.8% better than the result for the same period in 2023, according to the quarterly consolidated financial statements of the financial institution.
According to them, the bank’s net interest income decreased slightly by 0.6% to UAH 2.14 billion, while net commission income decreased by 23.2% to UAH 247.3 million.
Since the end of 2023, OTP Bank’s assets have increased by 2.2%, or by UAH 2.2 billion, and reached UAH 104.2 billion as of March 31. This increase was primarily due to an increase in loans and advances to banks by 21.5% to UAH 26.1 billion and to customers by 2.7% to UAH 25.5 billion.
The portfolio of loans to legal entities and individual entrepreneurs decreased by 0.3% to UAH 26.2 billion, consumer loans to households – by 5.4% to UAH 4.76 billion, while loans under repurchase agreements increased by 69% to UAH 1.79 billion.
It is indicated that balances on accounts with the National Bank of Ukraine (NBU) decreased by 9.5% to UAH 9.05 billion, while cash on hand increased by 41.6% to UAH 1.18 billion.
According to the report, OTP reduced its investments in securities by 7.2% to UAH 40.24 billion.
Since the beginning of this year, the financial institution has managed to increase its customer accounts from UAH 81.16 billion to UAH 83.63 billion, and the bank’s total liabilities have increased from UAH 85.5 billion to UAH 86.3 billion.
It is noted that the bank’s capital increased by 9.2% to UAH 17.9 billion, including retained earnings by 19.4% to UAH 9.6 billion.
The financial report indicates that the remuneration of key management personnel for the first three months of this year included short-term payments of UAH 12.9 million, which is 40% less than in the same period last year.
Since June 1, 2006, OTP Bank has been a 100% subsidiary of the Hungarian OTP Bank Plc. According to the National Bank of Ukraine, as of April 1, 2024, OTP ranked 11th in terms of assets (UAH 112.26 billion) among 63 banks operating in the country. The financial institution’s net profit for 2023 amounted to UAH 3.71 billion.
In May, JSC OTP BANK introduces a new service – the sale of domestic government bonds in the OTP Bank UA application from the Bank’s own portfolio. Thus, the purchase of domestic government bonds will be available at any time, regardless of the date of the Ministry of Finance of Ukraine’s auctions.
According to Valeria Ovcharuk, OTP Bank product owner, the new service will give customers more opportunities to choose the optimal bond rate and maturity. “Last fall, OTP Bank provided its customers with the opportunity to buy domestic government bonds directly at auctions of the Ministry of Finance through the OTP Bank UA application. To offer even more opportunities for investing in government securities, we have developed a functionality that will allow individuals to buy government bonds from the Bank’s portfolio online. We conducted an internal study within the Bank, analyzed requests from our customers regarding the desired maturity and currency for investments, and based on this, we formed a portfolio of securities for sale. This way, customers will be able to combine the optimal rate and investment period. The service is at the testing stage and will be available to users in May,” said Ms. Ovcharuk.
She emphasized that buying government bonds in OTP Bank is convenient and fast. “Just a few clicks in the application and government securities are in your bond portfolio. At the same time, you are making a profitable and reliable investment in the future, as the repayment of government bonds is 100% guaranteed by the state. At the same time, it is an opportunity to help the Ukrainian economy,” emphasized Ms. Ovcharuk.
The service will be available online to all customers who have opened a securities account at any branch of OTP Bank.
As a reminder, according to the Ministry of Finance of Ukraine, OTP Bank was ranked fourth among Ukrainian banks in the overall rating of primary dealers in 2023.
The status of a primary dealer provides the exclusive right to participate in the placement of domestic government bonds conducted by the Ministry of Finance, both on its own behalf and for clients of individuals and legal entities, as well as banks and financial companies that do not have such a status.
To learn more about investing in domestic government bonds through the OTP Bank UA app, please follow the link.
Comprehensive “green” transformation in Ukraine is gaining special importance and is already affecting business. JSC OTP BANK takes into account the trends and has planned a number of activities to create its own system of social and environmental management, said Maxim Oliynyk, ESG Manager of the Bank, during the open dialogue “Green Agenda for Ukraine: Special Role and Unique Challenges for Banks” with the participation of representatives of the NBU, EBRD, KSE and a number of Ukrainian financial institutions.
“OTP Bank is actively working to support and develop green technologies and social responsibility of Ukrainian business. We are currently developing our own environmental and social management system, which will be harmonized with the requirements of the European Union and will help the Bank to create its “green” portfolio,” said M. Oliynyk.
According to the ESG manager, OTP BANK is guided by EU standards in the field of green and sustainable technologies and practices aimed at reducing the risks and uncertainty that investors face when financing such projects. “In supporting green and sustainable technologies and practices, the Bank must not only meet the requirements of the EU and the Parent Bank, but also strictly adhere to the rules dictated by the National Bank of Ukraine, as ESG is becoming a necessity,” he emphasized.
According to Maxim Oliynyk, a comprehensive “green” transformation opens up access to the resources of global investors and modern European technologies, which, in turn, will contribute to the development of Ukraine’s economy and increase the number of potential requests for financing. Taking this into account, as well as the desire to use the opportunities that are opening up, OTP BANK has developed an ESG Strategy that provides for
– creation and implementation of all components of the social and environmental management system (policy on environmental and social issues, a separate communication channel, building institutional and human capacity)
– creation of separate “green” products and development of its own “green” portfolio, taking into account clearly defined and verified sustainability criteria for products (EU Taxonomy, Climate Bonds Taxonomy, Sustainable Finance Framework and Green Loan Framework of the Parent Bank);
– Inventory of the Bank’s greenhouse gas emissions and development of measures to reduce the carbon footprint;
– improvement of the ESG and sustainability training program for all OTP Bank employees, as well as other tasks in the field of environmental protection and social responsibility of the Bank.
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Beyond the bank services, such as Ponova by OTP Bank, are a response to the need of customers to receive the maximum number of related services on one platform. Oleg Klymenko, Member of the Management Board of OTP Bank responsible for retail business development, spoke about this at the Digital Lending 2024 conference.
“We offer our customers Ponova by OTP Bank, a marketplace where they can buy a used car. A huge number of partners have been brought together – about 60% of the offers of all used car sellers, which means 20 thousand cars ready for purchase. All cars can be purchased on credit, and each client has a personal manager, while the Bank provides transaction support. Thus, we have “closed the pains” of the client who wants to buy a used car,” the banker emphasized.
According to Mr. Klymenko, another trend in retail banking is that banks are massively developing term loans. “The essence and form of loans applied for by individual clients has changed. Today, installment and cash loans account for 60-70% of all requests. Until 2022, the situation was completely different: installment and cash loans accounted for 30-40%. That is, customers are now taking out mostly term loans, and banks are massively developing this area,” he emphasized.
According to him, almost 90% of installment loans are related to the digital sector. “This customer experience develops when the client knows that he can use it whenever the need arises. The main magic is related to the digital products and services of banks that help to gain this experience,” the banker said.
O. Klymenko said that OTP BANK offers several types of installments available in the OTP Bank UA app. “The client has a choice. For example, you can choose a product in a store or on the website of a partner network, and then buy it in installments – this is “Slice from partners”. Or you can do the opposite – first buy something, and then get the money back to your card at the expense of the credit limit. This is an installment plan that we are actively developing,” he said.
