“Our main goal is switching to digital banking”
Chairman of the Board Rovshan Allahverdiyev spoke about the achievements of the Bank and the strategic goals for the coming years.
- Mr. Allahverdiyev, you completed the year of 2017 with a record financial performance. What is the reason for such a high result compared to previous years?
- In comparison with the period following the devaluation, 2018 was relatively stable. However, this has increased our responsibility even more, because, like the entire economy of the country as a whole, the banking sector has also started to develop and our competitors, leaving the difficult years behind, have strengthened their activities to obtain a certain market share. It was not easy to maintain leadership positions in the banking sector, surpass the high financial indicators of the previous year and introduce new products to the market. But thanks to the efforts and professionalism of our team, we are confidently approaching the end of 2018. And we can safely say that we have achieved the goals that were set for us by the shareholders. Kapital Bank provides services to more than 3 million individuals and more than 22 000 legal entities. The Bank has more than 650 ATMs and about 10 000 POS-terminals throughout the country.
At the end of the 3rd quarter of 2018, the Bank’s assets amounted to 3.5 billion AZN, net profit —71 million AZN, ordinary and preferred shares —205.8 million AZN, and aggregate capital — 295 million AZN. I believe that we will complete 2018 with high indicators.
In 2018, we also increased the number of our service points: branches in Fuzuli, Agdash and Imishli were renovated, while “Shimal”, “Bravo-2” and “Ganja Card Center” branches were opened. As you know, in April 2016 Leletepe height was liberated from occupation, and Jojug Marjanli village of Jabrayil district came under the entire control of our armed forces. President Ilham Aliyev allocated funds from the Reserve Fund for the restoration of the village, and resettlement under the motto “Big return” began in 2017. Kapital Bank, having service points in all regions of Azerbaijan, began to provide services to the residents of Jojug Marjanli — now this village also has our ATM. In general, over the past two years, along with the already mentioned branch in Fuzuli, we have provided customers with updated branches in other areas of the frontline zone — Agdam, Tartar and Aghjabadi.
Currently, Kapital Bank provides quality services in more than 100 locations across the country. Until the end of 2018 it is planned to open three more branches in the capital — “Badamdar”, “Sahil” and “Neftchilar Card Centre”. Renovated branches have all the necessary conditions to provide services at the highest level.
- It should be noted that in 2018, Kapital Bank paid special attention to the sales of BirKart. In order to promote this card, you regularly carried out all sorts of actions and campaigns.
- In order to develop in the retail market, it is extremely important to offer a product that could fully meet the desires and requirements of consumers. Taking this into account, we presented BirKart to consumers in three forms. Judging by the number of calls in branches, as well as requests that come to our website and short numbers, all three types of cards — BirKart (classic installment card), BirKart Cashback (installment card/cashback) and BirKart Miles (installment/bonus miles card) — are in great demand among consumers. Since this year, we have also started to provide this card to those customers who do not receive a salary or pension in Kapital Bank, as evidenced by the slogan — “Hər kəsə, hər istəyə” (“For everyone, for every need”). At the moment, the client base of BirKart has about 300 000 users and this number is growing day by day. I would especially like to note BirKart Miles — with this card, our customers, having made a non-cash payment, earn bonus miles, which can later be exchanged for a ticket. The difference between this card and others is that the bonus miles can be exchanged for a ticket in any airline.
Classic installment card is also highly appreciated by our customers. By means of this card you can buy any product in our partner stores with non-cash at a cash price and pay the purchase amount monthly, dividing it into equal parts. This year we have held a number of promotion campaigns and various events not only for BirKart users, but also for our partners. Currently, BirKart’s network has about 1 000 partner stores. In 2019, we also plan to expand our partner network not only in Baku, but in the regions as well.
- Currently, Kapital Bank is at the stage of implementation of the planned strategic objectives. Could you tell us about the strategic objectives for 2018-2020?
- It should be noted that last year the realization of the strategic plan for 2014–2017 intended for Kapital Bank was completed and we managed to fulfill all the tasks set before us. We have now started to implement the development plan for 2018–2020, and we have already been able to do certain works in this regard. One of the top priorities among the new strategic objectives is the digital transformation of banking services.
Digitalization of a number of services and the process of transition to non-cash payments in Azerbaijan is developing rapidly. Obviously, the banking sector is also keeping pace with this trend. Most banks in the country offer their customers online services. We also have a number of innovative products in this field. This year we presented our new mobile application BirBank. Thanks to the new application, which was actively promoted as part of the well-known advertising concept “Gözləmə” (“Don’t wait”), customers can carry out many banking transactions online. This product has a number of advantages: easy registration, possibility to add the other banks’ cards, management of operations and bonuses tied to the card account, etc.
Besides, BirBank has also features that make it convenient not only to pay for communication, utilities and other services, as well as to get bonuses for payment, but also to send and receive money from other users of the application simply by phone number. The application also allows you to find nearby branches and ATMs of Kapital Bank, order a loan or a card and learn about exchange rate. Currently, BirBank has about 300 000 users, which is one of the highest rates in Azerbaijan.
I would also like to note that for the first time in the country we have launched a method of payment through QR code — “QR Pay”. By means of “QR Pay”, BirBank users have the opportunity to make payments in stores without a payment card — it is necessary to scan with smartphone camera a QR code on special posters installed in cash points. To make a payment, it is possible to use the account of any card registered on BirBank. In the near future, along with BirKart’s partner points, this type of payment will also be valid in other stores.
Generally, we have a wide range of projects related to the transition from traditional banking services to digital. Currently, we are carrying out serious works on digitalization of business processes. This will allow customers to conduct a number of operations in all our branches quickly and independently. The most important of these projects is the opening of a new, full-fledged digital branch. In the near term we will present our first digital branch as a pilot project. More than 20 main business processes of the Bank are optimized in such a way that customers could use the services of automated terminals in the digital branch. For example, by using the services of this branch, customers will be able to purchase BirKart instantly or get a cash loan. Along with that, customers will be able to use such services as order of payment card, transfer of funds, increase or decrease of deposit or current account, providing letters to an embassy and many others.
In May 2018, “Mobile electronic signature” project was presented for the first time in Azerbaijan. This project, along with bringing convenience to banking operations, created an opportunity for a fast and secure process of signing documents in electronic form.
- What projects do you plan to present in 2019 in the corporate sector?
- Economic development of any country begins with the development of small and medium-sized business. We have big plans and tasks in this direction as well. Despite the fact that our branches mainly provide retail services, five branches of the Bank have special departments for major corporate clients. Alongside this, Kapital Bank is also working on new solutions to facilitate the availability of funds for small and medium-sized business — in the near future we will present such innovative products as overdraft and factoring. By the end of the year, 4 branches of our bank will also sell banking products for small and medium-sized businesses. Starting next year, we intend to introduce a number of new products in this area.
This year we also presented to our corporate clients a new version of “Customer Bank” portal. Now our corporate clients have an opportunity to carry out many operations through this portal remotely and on the basis of more reasonable terms and tariffs. According to the indicators of 2018, more than 30 000 transactions per month are carried out through “Customer Bank” portal. Our bank for the first time in the South Caucasus started to use SWIFT gpi system. Thanks to this system, it is possible to track the funds sent to customers abroad or accepted by them from abroad. Corporate clients can also use the online queue function and visit our bank branches at their convenience.
- In recent years, Kapital Bank has also been actively involved in international events, exhibitions and forums…
- We take part in international events and represent the banking sector of the country. For example, Kapital Bank became the first Azerbaijani bank to become a member of the American Bankers Association. Moreover, we participate in SIBOS, BAFT and other annual meetings and events both as guests, participants and as partners. In May 2018 we took part in the event called “Future Leaders Program” held in London and organized by BAFT (Bankers Association for Finance and Trade), while in March of this year, with the support of Kapital Bank, American Bankers Association held a seminar called “Financial Crime Compliance Workshop 2018”. This year we also took part in the traditional SIBOS exhibition and the annual meeting of the International Monetary Fund (IMF) and the World Bank Group.
Although we currently have no plans to open branches or representative offices abroad, we believe that it is extremely important to use the experience of foreign colleagues in the field of banking.
Our cooperation with international rating agencies continued this year. Standard&Poor’s and Moody’s Investors Service agencies evaluate and issue a rating to Kapital Bank every year. It should be noted that our bank has one of the highest ratings among the banks of the country.
- Kapital Bank has implemented several social projects during this year. What projects did you present in 2018?
- Kapital Bank attaches great importance to educational projects as part of corporate social responsibility and supports them in every way. Our cooperation with the Ministry of Education can be called a partnership. This year we were also among the partners of International Education Exhibition. International and Republican Subject Olympiads, such projects as “Azərbaycan üçün öyrət”, “Təhsil Avtobusu” (“Bus of Knowledge”), events of “Sabah” groups were held with our direct participation. We have also supported ADA University and the State University of Economics in various projects.
This year, together with the Ministry of Labour and Social Protection of the Population, we held the opening ceremony of the center for retired persons “Yaşa”. The main purpose of the center, located in the building of the Department of Sabunchu district of the State Social Protection Fund, is to provide leisure for people of retirement age, ensuring the active participation of older people in the socio-economic, political and cultural life of the country. At the moment, our employees conduct trainings on financial literacy for retirees visiting the center. But our programs for them are not limited to this: we also organized a project in which retired persons, on a voluntary basis, served elderly people who visited the Bank’s branches for one month. We involve them in our other projects. For example, on the eve of June 1 — International Day for Protection of Children — they voiced audio stories for children with vision impairment.
Recent years have been marked by the transition to digital technologies, which in one way or another affected all spheres of activity. But at the same time, let’s not forget that children should use a safe internet. In this regard, we took part in the project called “Safe Internet” together with the State Committee for Family, Women and Children Affairs. On the basis of the project, a special application for safer use of internet by children was developed and put into operation. With this application, parents have the ability to impose restrictions on children’s access to content they consider unsafe, as well as control the sites visited by their children.
Kapital Bank also gives importance to the education of its employees. During the year, our employees participate and improve their skills at various local and foreign trainings. Given that trainings cover a wide range of topics and issues, this year it was decided to open the Bank Academy, which consists of 9 training rooms and can accommodate up to 160 people for trainings and other activities.
- It would be interesting to hear your forecasts for the end of this year, as well as for 2019. Will you be able to surpass the financial performance of the previous year?
- Our forecasts for this year, as in previous years, are quite positive. There is very little left until the end of this year and, judging by the results of the third quarter, our indicators should be considered encouraging. In addition, as I have already mentioned, Kapital Bank has started to implement its strategic objectives for 2018–2020.
Certainly, in 2019 we will make every effort to surpass the financial indicators of the previous year. In the service sector, we also intend to offer a number of innovations. At the moment, the average customer service time is about 5–30 minutes, next year we plan to reduce the maximum service time to 15 minutes. On the eve of many national, state and professional holidays, our customers will be able to benefit from advantageous campaigns and gift promotions. In order to increase customer satisfaction, along with rendering quality services, it is also necessary to provide them with favorable and competitive conditions. We intend to strengthen our work in this direction and do our best to exceed their expectations.
In conclusion, I would like to express my sincere gratitude to the millions of our customers who visit our branches every day or use our services outside the branches through terminals and mobile applications, and thanks to whom Kapital Bank is the first bank in the country. In the coming years, we will face ambitious tasks, and I am confident that together with our professional team we are going to accomplish them successfully.