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What brought you back to Ukraine?
I was working for a Central European private equity fund called Innova Capital, and one of my side responsibilities was to look for deals in Ukraine. Serendipitously I stumbled across a deal in consumer finance in Ukraine. Innova turned the deal down because it was too small, so I ended up doing it myself with some “friends and family”. In 2005, retail lending was a very interesting industry here in Ukraine as it was just starting out, so we started up a credit intermediary. Within six months of being founded, the company was put together with International Mortgage Bank, which was owned by Horizon Capital, also an investor in our company. Once the companies were merged, Horizon Capital invited me back to Ukraine to run the merged entity in 2006, and that was basically the start of Platinum Bank.
You left in 1991, just prior to independence, and came back in 2006: what had changed?
Well it was a whole different country: I left the Soviet UNI0N and came back to independent Ukraine – TV was in Ukrainian, radio was in Ukrainian, and with me coming from the south, I wasn’t educated properly in Ukrainian, so that was the first part of the culture shock. Ukraine has had a very vibrant, some would say turbulent, independence period politically and economically, but it’s come such a long way in such a short space of time it’s almost unrecongnisable.
Platinum Bank has grown at an astronomic rate. What’s behind its success?
Credit has to go to the early investors, including Horizon, East Capital, and IFC. But mainly, I’d say it was Horizon with the vision that retail banking services in Ukraine would develop, and they were prepared to back that vision with a substantial amount of capital. Their vision proved to be absolutely correct: the under penetration of retail banking amongst the population is massive compared even to some of our closest neighbours. The market has developed rapidly, and we’ve been lucky enough to be riding that wave. We’re lucky to be in this market with the proper tools, particularly when it comes to risk management. Risk management has been a challenge for most of the players because we don’t have the proper market infrastructure for doing it right – the credit bureaus are in their infancy, and therefore there’s very little third party verification on income information. When it came to underwriting, we focused much more on a client's demographic profile rather then proof of income, and that proved much more reliable for us.
From a consumer point of view, what differentiates Platinum Bank from the others?
There are a couple of things that make us stand out, one of them being our stance on corporate social responsibility, something we take very seriously. In fact we have Key Performance Indicators written into our mission statement that don’t only focus on financials, but also our employees and the society in which we operate. We get very involved in the communities in which we operate, such as working with children’s homes, computer classes, financial education for kids, and much more.
Of course, when it comes to product offering, we focus on what’s known as the five Ps – product, pricing, promotion, process and people. We really believe that in Ukraine you can’t differentiate on price, as it’s a market with perfect competition; you can’t differentiate on promotion as there are only so many ways in which you can send the message; you can’t differentiate on product either, as these products have been around for a very long time. What do serve as differentiators is people and process, so we invest very heavily in this area. We invest heavily in people, especially those who represent Platinum Bank to our customers, as they have to represent Platinum Bank values. In this way, we provide a level of service that is consistent, and is of a high level.
Platinum Bank has shown massive growth since the crisis began. How did you manage to achieve this when almost every other bank was reining in and heading for cover?
We were lucky that we entered the crisis with a very healthy balance sheet structure. We were also incredibly lucky that we managed to raise a huge amount of capital just before the crisis, so capital-to-assets ratio was above fifty percent, which would normally be unhealthy for a bank, but moving into a crisis it was a very strong position to be in. We were also maintaining very conservative underwriting practices prior to the crisis, so our mortgages have performed much better than those underwritten by our competitors. Our biggest challenge was on how to finance this massive opportunity where there was practically no competition, and we did this with a strategy to increase our deposit resources to our balance sheet. Mostly, we did this organically, opening our own branches, and also through the acquisition, in 2010, of Home Credit Bank Ukraine, where we incorporated their branches into our network, and their deposit resources onto our balance sheet.
Banking in Ukraine is becoming increasingly difficult for foreigners with all the constantly changing legislation. How does it look from the inside?
I wouldn’t say this was specifically targeting foreigners. What I’m observing is a regulatory tightening on practically every front. I think this is caused by the history of Ukraine. Generally speaking, it seems that when people in power in Ukraine want to do something good for the country, their instinct is to prohibit and regulate more rather than liberalise and legislate less. I think we’re seeing a lot of this now. Sometimes it’s good, sometimes it’s detrimental, but one thing I’m happy with is that the current government is actually doing stuff. Things are happening.
What do you do you like to do in your spare time, and where do you like to do it?
I have a young son, so that takes up a fair bit of my time. But I do have two hobbies – music and sailing. In the summer it’s mainly sailing, and in the winter it’s mainly music. I have a recording studio at home and like to record lounge music. It’s what I do to relax and meditate – I lock myself in there and record. I also love to play with other musicians and we do gigs occasionally. We do good ol’ rock ‘n’ roll, blues and some Russian rock. We play at Cigar Club events and some Platinum Bank events too. We once played on Maidan, which was a lot of fun. When it comes to going out in town, I’m no longer a clubbing guy, so it’s mostly restaurants. My wife and I like Asian cuisine, but there’s not really a great choice in Kyiv yet, so there’s not one place I call home.
Neil Campbell
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