Rebuilding its internal infrastructure in order to finance and develop the infrastructure of the state was almost the main task of Ukreximbank in 2020, which became a new starting point for all of us. The start of the bank’s systemic transformation with a new management team, and its support for existing customers experiencing falling revenues and interruptions in supply and production cycles during the lockdown coincided with the launch of a number of new ambitious projects and innovative solutions. The list of financed industries is also as broad as possible. These are industry and construction, transport and logistics, agriculture and food processing, energy, and the military and industrial complex. In addition to working in the public and commercial sectors, the Bank has formed a separate business vertical for servicing medium-sized businesses, municipalities and utilities.
Today Ukreximbank has the financial capabilities and the full range of tools to structure transactions according to the needs of the clients. If necessary, it can even develop a separate case from scratch. For example, a transaction of almost Hr 3 billion was implemented, where for the first time on the market, three instruments were combined — a refinancing loan from the NBU, an interest rate swap and investments in Ukravtodor’s securities. Such an advantageous configuration for all its participants made it possible to ensure a closed cycle of long-term turnover of public finances.
Under the Big Construction Program, we did not confine ourselves solely to financing Ukravtodor. Our goal is to quickly respond to market developments and tailor our product offer accordingly. In this case, our goal is to create a whole added value chain for the entire road industry in the process of construction and reconstruction of road infrastructure. Road services in the regions involve design and engineering companies, material production and service sector enterprises in the performance of work. All of them need to carry out calculations, replenish working capital to pay for labor and purchase materials, and get a variety of bank guarantees to secure bids and fulfill contractual obligations. In 2020, the Bank issued about two hundred guarantees for more than a billion hryvnias for the road business.
The guarantee recipients include the largest domestic contractors who have been working with Ukravtodor for a long time and are serviced by our Bank, as well as foreign companies. For example, we recently issued a bid bond bank guarantee for a road organization with experience in the construction of a Formula 1 race track and guaranteed the construction of a new cable-stayed bridge across the Dnieper by the Doğuş Group, with a total project cost of over Hr 11 billion. If earlier transnational corporations were focused on servicing in banks with western capital, now we find more and more points of interaction with non-residents and representative offices, providing services taking into account the policies of their parent companies.
In some cases, when construction work is subcontracted, the contractor may need specialized equipment, the acquisition of which can be financed or provided for leasing by the Bank. The Bank also provides flexible conditions for the acquisition of fixed assets on competitive terms with a number of significant advantages, for example, the establishment of a lower rate in the indexed hryvnia, when the payment under the contract is adjusted in the event of a change in the hryvnia exchange rate against foreign currencies. In addition, existing compensation programs and special supplier promotions may apply. At the request of the customer, the subsidiary leasing company of the Bank imports the necessary machinery and equipment on a turnkey basis – with a full range of related services for registration, insurance, maintenance, etc.
Depending on the client’s profile and specific case, the Bank selects the necessary instruments or sources of financing, as well as the optimal decisions in terms of speed, cost and risk appetite. These can be government and interstate business support programs, trade finance instruments, access to bulk lending for joint projects with IFIs or other foreign counterparties. The Bank’s unique expertise in export-import operations, a wide range of transaction currencies and the largest network of correspondent partners also contribute to the successful processing of client requests.
This year, Ukreximbank aims to expand the loan portfolio of corporate clients with a focus on supporting strategic state-owned enterprises, commercial exporting and importing companies, large-scale infrastructure investments initiated by the Government, and territorial communities. We are involved in a variety of projects — from the repair of city streets and improvement of public places to the renewal of the passenger and public transport fleet to the reconstruction of airports and the construction of aircraft. Improving logistics and transport flows will contribute to the development of many other areas and create a multiplier for economic growth, as well as open up new business opportunities for foreign investors.
