“We are grateful to our customers for their trust that made our bank a market leader in financial services”

The Chairman of the Executive Board of Kapital Bank Rovshan Allahverdiyev talked about secrets of building and managing a successful business.

Kapital Bank has gained significant achievements becoming a leading bank of the financial sector of the country. Going through transformational change, the bank currently delivers wide range of financial services to the customers with about 100 branches located throughout the country. Rovshan Allahverdiyev, the Chairman of the Executive Board of Kapital Bank, that completed Q32017 with remarkable results, shared the secrets of building and administering a successful business:

- Mr. Allahverdiyev, Kapital Bank has completed 2016, a challenging year, with 52 million manats in profit. What are the success criteria for the business?

- First, I would like to note that 2016 was quite an interesting year. As you already know, there were devaluations at the beginning and the end of 2015. And the outlook of banking industry for 2016 was not encouraging. However, we managed to complete the previous year with success and profit, just like a year before. We succeeded in beating the targets set out by our shareholders. Kapital Bank serves about 3 million of private and more than 22 thousand corporate customers. Large customer base, continuously updated product portfolio, largest branch network in the country, transformation of branches and business processes created a foundation for achievement of high financial indicators by the end of the year. Business development and a team with great potential guarantee the success of a business. According to Q32017 financial results, bank has 3 billion manats of assets, 57,6 million manats of net profit, 185 million manats of charter capital and 266,3 million manats of equity capital. I am sure that we will complete 2017 with high financial indicators as well.

- After devaluations, international credit-rating agencies downgraded the ratings of the country’s financial sector. Despite this fact, Kapital Bank managed to maintain its rating.

- Generally, certain setbacks in ratings are observed in any country going through an economic crisis. In Azerbaijan too, these unfavorable fluctuations of ratings, combined with the unstable exchange rate of local currency resulted in such negative outcomes. The performance of our bank is evaluated by international credit-rating agencies Standard & Poor’s and Moody’s Investors Service. Our ratings remained stable as per the results of 2017. Surely, maintaining stable rating against the background of such negative news is a challenge and responsibility. It means that Kapital Bank could prove itself as a leading institution in the financial sector of the market. Currently, capital adequacy ratio of Kapital Bank is in full compliance with the regulator’s requirements and existing capital buffer of the bank allows managing unexpected cases. At the same time, the bank’s capital indicators are supported by profitable operations. As we know, in practice, risks and losses associated with the capital are directly related to the allocation of assets, as well as the quality of loan portfolio. In this regard, our bank pays a great deal of attention to “know your customer” principle and all applications are comprehensively analyzed to minimize credit risks. The customers’ financial situation, liabilities, activities are thoroughly investigated before lending, and they are being offered loans matching their capacity to pay considering potential risks. To maintain low level of credit risk within existing economic situation, lending process for various segments is constantly reviewed and improved.
We are doing our best not to maintain, but upgrade our credit rating after the upcoming evaluation. Because now we observe relatively stable oil prices, increase in export, decrease in import and stable exchange rate of manat against dollar. The exchange rate of dollar/manat, which was around 2 manats in the beginning of this year, now has stabilized around 1,70.

- In last 2 years we have seen Kapital Bank in a number of international exhibitions and conferences. Are you planning to cooperate with foreign organizations and enter international markets?

- One of the priorities of Kapital Bank is international cooperation. We have made several steps towards this goal, established cooperation with various international organizations and financial institutions. We also participate in financial exhibitions throughout the year. Kapital Bank is a member of American Banker Association and supports numerous conferences of this organization, actively participating in its annual meetings. It must be noted that Kapital Bank and a Russian bank are the only representatives of CIS countries in this association. I am sure that participation in such kind of events will result in recognition of the region’s leader Kapital Bank on international level and will contribute to realization of new partnership projects according to our strategic plans.
Although we are not planning to open a branch or representative office abroad, it is very important to sustain international cooperation and learn from the experience of our foreign peers in order to provide more qualified services to our customers.
Kapital Bank has joined Swift gpi international system. Moreover, a well-known Global Finance magazine has determined the most trusted and secure banks (“Safest Bank”) of the world last month. Kapital Bank was nominated as the “Safest Bank” in Azerbaijan. The research was conducted among almost 1000 banks from 106 countries. We will try to participate in more international events to come and expand our cooperation.

- Recently, several European banks started to offer digital banking services. Which innovative solutions is Kapital Bank planning to offer to its customers?

- We have presented updated mobile and internet banking services to our customers. Customers can easily carry out banking operations without visiting the bank using this application that provides numerous advantages and innovations. However, technology advances with every passing hour and we are moving forward with this trend. We will present the upgraded version of the application to our customers in the nearest future. Henceforth, customers will be able to order credit and debit cards, make deposits and control all accounts and banking products using this application. In addition to that, Kapital Bank is planning to integrate the whole range of its products and services to digital platform as one of the most important strategic targets for 2018–2020.

- Kapital Bank has around 100 touchpoints throughout the country. How could you justify the opening of new branches, while competitor banks are closing theirs?

- While expanding the geographic outreach of your services, it is necessary to improve the quality of customer service as well. Of course, the first step is the optimization of branch network. A customer should get quality service in the nearest comfortable and favorable location. Thus, in order to provide quality services to our customers we had to “clean-up” our branch network. Kapital Bank takes certain measures to transform its branch network. In 2017 we opened new branches and points, also carrying out capital repairs or relocation of several branches. The branches were renewed with implementation of single corporate interior design standards and this process is about to be completed. We are planning to make capital repairs of some more branches in the city and regions, as well as open new branches and points this year. At the same time, we have introduced Training and Development Centers for our employees in Ismayilli and Lankaran to guarantee continuous development of our regional branch staff. Now the regional trainings are carried out in these locations, positively impacting on employee development and improvement of customer service quality. We also opened Card Centers, where the holders of social benefit and other cards can easily obtain their cards. Moreover, we are planning to open several new branches based on segmentation of our customer base.

- Which social projects are carried out by Kapital Bank?

- Kapital Bank pays a great deal of attention to corporate social responsibility. The Bank carries out different social projects every year. We have constantly supported various projects of the Ministry of Education, SABAH groups, “Teach for Azerbaijan”, Countrywide Subject Olympiads of the Ministry of Education and Azerbaijan State University of Economics. We’ve become general sponsor of the Education Exhibition of the Ministry of Education. The joint conference of Berkeley University and Engineering University under the title of “Establishment of Innovative Ecosystems” held in October of this year was supported by our bank. We’ve carried out a number of tree planting events as part of “My Green Country” project by Kapital Bank. Every year our employees participate in blood donation campaigns to support the “Life Without Thalassemia” program. In October of this year, we have carried out educational trainings for elderly people in Baku, Ganja, Ismayilli and Lankaran dedicated to the International Day of Older Persons. We are planning to expand the scale of such projects in the future.

- What kind of new products and services you are planning to offer to your customers in the nearest future?

- We continuously offer various discount, gift and concession campaigns to our customers on special occasions. This has become a tradition. Moreover, we do not forget to introduce new products as well. As you know, this season we have launched 3 currency Visa Trio cards and established the “Union Club” for our loyal credit customers. We also plan to introduce numerous updates of BirKart product, which will offer additional benefits to our customers.

- Speaking of forecasts, which predictions would you make on major financial indicators? Will 2017 be a profitable year?

- My forecasts are definitely favorable. There are few months left till the end of this year, and we are very positive about it, considering the reports for Q3. We will do our best to sustain growth trend in 2017. Moreover, Kapital Bank is now beginning to fulfill strategic targets for 2018–2020. We have successfully hit the targets for the last 3 years. I would like to express my gratitude to the customers that stayed with us throughout the challenging transformation process. We still have quite complex and responsible goals for upcoming years. I am sure that we will reach them with the support, efforts and competence of our professional staff.