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ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 103102 Translation from Ukrainian original Translation from Ukrainian original
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ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK” 3Translation from Ukrainian original
Address by the Chairman of the Supervisory Board ....................................4
Address by the Chairman of the Management Board ..................................6
MANAGEMENT REPORT FOR THE YEAR 2018
1. Nature of Business ...........................................................................10
Macroeconomic Overview,
Key Trends of the Ukrainian Economy in 2018 .............................12
Credit Agricole Group ..........................................................................16
Credit Agricole Bank ............................................................................18
Executives and Officials
Supervisory Board ..........................................................................20
Management Board ........................................................................22
Organizational Structure .......................................................................24
Current Business Model .......................................................................26
Corporate Business ........................................................................26
Retail Business and Network ..........................................................32
Ratings and Awards .............................................................................38
2. Management Goals and Strategy for Their Achievement ...........42
Existing Priorities, Criteria for Measuring Success
and Assessing Achievements, Significant Changes in goals
During the Reporting Period ........................................................44
Digital Banking and Other Research and Development Activities .........46
3. Resources, Risks and Relationships .............................................50
Risk Management System ...................................................................52
Key Financial and Non-financial Resources
and Their Use for Goal Achievement ...............................................60
Conclusion of Derivatives or Transactions in Derivative Securities ........61
Compliance .........................................................................................62
Relations with shareholders and related parties ...................................64
4. Results of Activity and Prospects for Further Development ......66
5. Analysis of Key Performance Indicators .......................................72
6. HR Policy ........................................................................................... 74
7. Corporate Social Responsibility .....................................................80
8. Statement of Corporate Governance .............................................86
ANNUAL FINANCIAL STATEMENTS
WITH INDEPENDENT AUDITOR’S REPORT
Independent Auditor’s Report .................................................................106
Statement of Financial Position ................................................................ 112
Statement of Profit and Loss and Other Comprehensive Income ............ 113
Statement of Changes in Equity .............................................................. 114
Statements of Cash Flows ....................................................................... 115
Notes to the Annual Financial Statements ............................................... 116
CONTENTS
JOINT STOCK COMPANYCREDIT AGRICOLE BANKMANAGEMENT REPORT
FOR THE YEAR ENDED DECEMBER 31, 2018
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 54 Translation from Ukrainian original Translation from Ukrainian original
A history of growth. Credit Agri-
cole Ukraine has achieved consis-
tent growth. As well as expanding
in terms of size, we have achieved
a far-reaching transformation. In
2018 Credit Agricole celebrated a
25th anniversary of Group’s pres-
ence in Ukraine. Over this quarter
of the century the bank grew into a
large universal bank serving all mar-
ket segments. Our business model
proved to be resilient to the difficul-
ties caused by the crisis in Ukraine
faced over the last 5 years and to
the significant changes in banking
regulation. Our actions will continue
to be guided by our long-term vision
combining confidence and caution.
Record result for Credit Agricole
Ukraine in 2018. The year regis-
tered a positive evolution on almost
all the macroeconomic indicators
in Ukraine (GDP growth +3.2 % as
compared to 2017) and the banking
system showed more sound funda-
mentals, even though it is still in the
process of deep transformation and
concentration.
In this context, Credit Agricole
Ukraine continued supporting the
real economy through loans to
households and businesses, with a
recognized leadership by the market
for cash loans, car loans and agri-
agro. The excellence achieved has
been substantiated by the Credit
Agricole Ukraine’s capital and in-
come ratios (2018 net result is the
highest in the bank’s history), which
once again allowed it to rank at the
top of the sector and to obtain the
highest possible national long-term
rating in Ukraine by the international
rating agency Fitch (AAA).
This performance was achieved
thanks to a commercial policy fo-
cused on combining customer sat-
isfaction and profitability, as well
as to a financial management that
ensured adequate liquidity, thus
allowing lending expansion to be
sustained, through an effective cost
control and careful risk measure-
ment. On the other hand, a high in-
vestment rate has been kept to gear
control systems to the changed re-
quirements resulting from the bank’s
larger size.
Synergy with Credit Agricole
Group. Finally, another great ad-
vantage is belonging to a leading in-
ternational Group, which is present
worldwide and has been operating
in Ukraine for many years offering
high-quality products that allow pro-
viding all services that can be inter-
esting for our customers.
Challenges for the coming
years. 2019 will bring a fur-
ther challenge to Credit Agricole
Ukraine: in a still uncertain eco-
nomic situation, we will continue
to grow on the sound basis set in
the past years. Our ambitions and
development programmes will be
defined and set forth in the three-
year business plan, which is now
being completed and which will be
our model for the near future in a
deeply-changing market.
We will meet this new challenge
with the eagerness stemming from
our cohering structure and from the
motivation of all the people working
in this structure and representing a
true strong point and the basis of
our performance.
All the solid results and continuous
growth of the bank became possi-
ble thanks to our professional and
dedicated employees. Our team is
a heart of the bank, it serves as a
driver of innovations and it allows us
to be confident while contemplating
the 25 years to come.
Stanislas Ribes Chairman of the Supervisory Board
A HISTORYOF GROWTH
ADDRESS BY THE CHAIRMANOF THE SUPERVISORY BOARD
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 76 Translation from Ukrainian original Translation from Ukrainian original
ADDRESS BY THE CHAIRMANOF THE MANAGEMENT BOARD
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 98 Translation from Ukrainian original Translation from Ukrainian original
MACROECONOMICCONTEXT
BANKING CONTEXT
2018 was marked by a generally sta-
ble geopolitical environment, albeit
with rising tension between Ukraine
and Russia in the Azov sea and re-
forms implemented less efficiently
than was expected by the interna-
tional community, especially in the
anti-corruption area. The progress
achieved in a more favorable eco-
nomic environment resulted in the
confirmation of the IMF’s and the
European Union’s financial support
to Ukraine through new programs.
Over the past year, the macroeco-
nomic indicators were rather posi-
tive, including the acceleration of the
Ukrainian economy, as evidenced by
more than 3.2 % GDP growth YoY.
This is the best performance since
2012, and this dynamic was driven
by the continued development of
the Ukrainian agriculture and a good
recovery of household consumption
due to a significant increase in sala-
ries (real nominal wage +20.5 %).
Inflation dropped significantly to
9.8 % YoY in 2018, as compared to
13.7 % in 2017. This improvement is
the direct consequence of the NBU’s
new currency policy providing for the
adjustments to the policy rate.
The foreign exchange market per-
formed well with an exchange rate
of about 27.8 UAH/USD, which re-
mained globally stable YoY. The
volatility of the local currency was
limited, especially when compared
to other emerging countries.
Foreign direct investment (FDI) in-
creased thanks to a more favo-
rable regulatory environment (VAT
reimbursement, repatriation of di-
vidends, gradual deregularization of
the foreign exchange market), even
if its level is still insufficient given the
country’s potential.
The banking sector performed better
and returned to profit (+21.7 bn UAH)
after being in deficit last year
(–24.4 bn UAH). This gradual im-
provement is the result of the NBU’s
active clean-up policy carried out for
several years, which let the banking
sector better support the develop-
ment of the Ukrainian economy. It
should be noted that competition
between banks grew in a more in-
novative environment. The introduc-
tion of new requirements to the Risk
Management System (RMS), which
is relevant in all respects, will be a
challenge for many banks still weak-
ened by the very high level of NPLs.
For Credit Agricole Bank, 2018 was
marked by a very good commer-
cial dynamics in all activities, record
levels of car and cash loans, more
than 2,400 new corporate custo-
mers, and accelerated development
of synergies with Credit Agricole
Group at the level of international
clients. Credit Agricole Bank has
confirmed its leadership in the area
of agri-agro financing with the best
customer satisfaction index in the
market. The bank was also deep-
ly involved in flagship projects in
aeronautics and renewable energy
finance, and pursued partnerships
aimed at supporting SME as well as
Midcorp development. Thus, Credit
Agricole has contributed to the de-
velopment of the local economy.
This strong commercial momentum
enabled Credit Agricole to achieve
significant growth in 2018 as com-
pared to the previous year. The
NBI increased by 23 %, and the
expenses were under control given
the sustainable growth of salaries
due to labor market tensions, which
allowed to maintain a good cost/
income ratio and improve it against
2017. At the same time, the prudent
credit risk policy allowed Credit Ag-
ricole Bank to reduce its COR YoY.
The combination of these factors re-
sulted in a significant increase of the
bank’s NR (+32 %) as compared to
the results of the previous year.
Credit Agricole Bank also accelera-
ted the implementation of its Client
project in three priority areas: ex-
tending the product offer and creat-
ing added value for our customers,
providing accessibility through a
multichannel distribution model, and
setting up customer relations based
on transparency and accountability.
The deployment of our new model
branch concept continues in big
cities and is highly appreciated by
our customers. FinAwards 2018
recognized this concept as The
Best Branch in Ukraine. In summer
2018, Credit Agricole Bank presen-
ted AgriSchool, a platform where
agri intelligence is concentrated.
This six-module program was highly
evaluated by the market, and 40 agri
experts graduated in April 2019.
Credit Agricole Bank has been very
active in the area of corporate social
responsibility, especially in terms
of green initiatives as it successful-
ly completed the first stage of the
IQ energy project sponsored by
the EBRD and held two dedicated
Tree for Car Loan campaigns. The
bank continued to take care of its
employees by providing health and
life insurance for all staff as well as
training opportunities in Ukraine and
abroad, and by organizing corpo-
rate events. Charity activities were
expanded to support seven regional
orphanages, reconstruct the swim-
ming pool in the Sportium children
camp, and purchase medical equip-
ment for the Center for Pediatric
Cardiology and Cardiac Surgery.
We are proud of our success and
happy to share it with our customers.
We appreciate their trust and our em-
ployees’ contribution to the develop-
ment of Credit Agricole in Ukraine.
Jean-Paul Piotrowski Chairman of the Management Board
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 1110 Translation from Ukrainian original Translation from Ukrainian original
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 1312 Translation from Ukrainian original Translation from Ukrainian original
The general economic mood in
Ukraine over 2018 is moderate-
ly positive. In fact, GDP has been
growing for eleven quarters in a
row. The bank estimates for eco-
nomic development over 2018 re-
veal quite a moderate GDP growth
of 3.2 % as compared with 2017.
Nevertheless, this is the best figure
since 2011, i.e. a few years before
the economic and political crises
happened. This upturn has not yet
compensated for all the losses that
the Ukrainian economy suffered
from the 2014/2015 crisis. Geopo-
litical risks, slow structural reforms,
high corruption levels and volatile
global markets brought about rath-
Last year, domestic investments
(estimated at 13.0 % YoY) and pri-
vate consumption (6.1 %) were the
core driving forces of growth among
expenditure components of GDP. In
fact, the government’s doubling the
minimum wage in 2017, its addition-
al increase in 2018, higher transfers
from workers abroad, as well as the
growing domestic average wages
due to the economic upturn and
leakage of workforce from the coun-
try have mostly supported private
consumption. On the other hand,
the necessity of the renovation of
existing facilities, implementation of
energy-saving technologies and the
government’s heavy investments in
infrastructure (mostly capital repairs
of road networks) supported do-
mestic investments last year.
As can be seen from the growth
recorded in 2018, net exports were
the worst-performing expenditure
component of GDP last year (esti-
mated at –2.6 % over 2018). In par-
ticular, exports demonstrated just a
small decline due to volatile global
commodity prices (including a sol-
id hike in crude price in the middle
of the year) and logistic problems
er modestly growing Ukrainian GDP
last year. GDP per capita in USD is
on the upturn for the third year run-
ning (3.0 kUSD in 2018), while still
remaining well below the pre-crisis
level of 2013. The bank believes that
solid UAH devaluation in 2014/2015
made this figure worse.
in the Azov. On the other hand, im-
ports maintain strong growth due to
the high domestic consumer and in-
vestment demand.
In spite of the moderate GDP
growth, domestic economy sectors
recorded a rather mixed dynamic
last year. Undoubtedly, the most in-
fluential sector supporting economic
growth in 2018 was agriculture, but
some seasonal shifts in active har-
vesting resulted in a rather volatile
agriculture dynamics in the second
half of the year. In any case, a record
high grain harvest of 70.1 mn tons
(or by 14 % higher YoY) influenced
the performance of agriculture most
of all, recording 7.8 % YoY upturn for
the whole year (comparing to a drop
by 2.7 % over 2017).
Continuing economic upturn, im-
proving financial results of compa-
nies, further hike in the minimum
wage (16.0 % YoY), gradual removal
of wages from the shadows as well
as the threat of labor migration kept
the wage growth in the 2018 econ-
omy at a high level. In particular, the
average monthly wage in Decem-
ber exceeded 10 k UAH for the first
time, thus demonstrating a 20.5 %
YoY growth in nominal terms. This
figure is slightly worse than a year
ago (36 %), when the economy ful-
ly enjoyed the effect of the doubling
minimum wage. But it is still solid
enough to demonstrate consumers’
growing income and demand.
Contrary to almost all market fore-
casts stipulating moderate hryvnia
weakening, the USD/UAH rate fin-
ished the year with a small decline
(by 1.3 %) in YoY terms. The great-
est difference was recorded be-
tween the actual USD/UAH rate and
the level forecasted by the budget
(30.1 by the end of the year). This
was one of the solid factors for the
shortfall in actual budget revenues
compared to the planned level. As
expected, the dynamics of the USD/
UAH was not uniform throughout
the year, thus following certain pat-
terns in different periods of the year
mostly backed by seasonal factors.
As soon as the parliament ap-
proved the new Law On the Cur-
rency Market, the NBU decided
to make significant changes in the
corresponding regulation, effective
MACROECONOMICOVERVIEW, KEY TRENDSOF THE UKRAINIANECONOMY IN 2018
GDP DYNAMIC BY EXPENDITURE COMPONENTS, %, YOY
Sources: State Statistics Committee, Credit Agricole
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 1514 Translation from Ukrainian original Translation from Ukrainian original
since February 7 already. In partic-
ular, the new regulation removes a
bulk of capital control, thus allowing
more FX market liberalization and its
greater volatility in case of solid and
sudden imbalances. Yet not all lim-
itations are abolished. In particular,
preservation of mandatory FC sale
(albeit declining to 30 % instead of
50 % since March) would allow
NBU to partially control the market.
Besides, NBU retained the right to
impose additional restrictions, if
needed.
Solid inflow of foreign currency in
November/December after the issu-
ance of Eurobonds and the receipt
of loans from international donors
considerably corrected NBU FC
reserves upwards in 2018 (by 11 %
YoY) to the five-year maximum of
20.8 bn UAH. The bank also con-
siders net positive NBU market
interventions of 1.4 bn USD as a sig-
nificant supporting factor for stron-
ger reserves by the end of 2018. A
hike in reserves improved their cov-
erage of imports from 2.9 months
in Q3 2018 to quite sustainable
3.5 months by the end of the year.
The bank believes this supports
NBU’s ability to keep the exchange
rate stable at least in the short term.
Year-end inflation in 2018 (9.8 % YoY)
was lower than both bank (10.0 %)
and NBU (10.1 %) forecasts, thus
dropping to the minimum over the
last five years. The bank considers
the high grain harvest, tight mone-
tary policy of the NBU, postpone-
ment in hiking residential gas tariffs
and the growing share of savings as
the core factors behind the declining
inflation dynamic last year.
The bank’s net profit over 2018 (21.7
bn UAH) has visibly improved com-
pared to 2017 (-24.4 bn UAH), thus
reaching the maximum over ten
years. Net interest income remained
the core source of banking income
last year. The bank thinks it has im-
proved mostly because of the grow-
ing interest rates’ margin caused by
the hike in the NBU policy rate.
The bank keeps its own view on
further positive development in the
banking system this year. However,
the profitability of its operations may
be reduced due to the potential re-
duction in interest rates’ margin and
the growing competition in the sec-
tor. The bank also expects gradual
improvement in the quality of banks’
assets as well as preservation of
strong support of banks’ capital by
their owners. Western banks will re-
main the most profitable group in
the sector.
CPI BY ITS COMPONENTS, %
BANKS’ NET INCOMEUSD/UAH EXCHANGE RATE OVER RECENT 12 MONTHS
Sources: State Statistics Committee, Credit Agricole
Sources: NBU, Credit AgricoleSources: NBU
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 1716 Translation from Ukrainian original Translation from Ukrainian original
52
139,000
30,000
49
9.7
MILLIONCUSTOMERS
MILLION MUTUAL SHAREHOLDERS
DIRECTORS OF LOCALAND REGIONAL BANKS
COUNTRIES
EMPLOYEES
CREDITAGRICOLE GROUP
With 139,000 engaged employees,
the bank forges genuine partnerships
with its customers.
Thanks to its universal customer-ori-
ented banking model based on close
cooperation between its retail banks
and specialized business lines and
reaffirmed with the “A whole bank just
for you” motto, Credit Agricole helps
its customers realize all their perso-
nal and business projects. It does so
by offering them an extensive range
of services, including day-to-day
banking, loans, savings products,
insurance, asset management, real
estate, leasing and factoring, corpo-
rate and investment banking as well
as issuer and investor services.
Credit Agricole’s corporate social re-
sponsibility policy lies at the heart of
its identity.
It is reflected in its products and ser-
vices, guiding all its business lines.
This commitment is the key factor
contributing to overall performance –
and a powerful innovation driver.
Built on strong cooperative founda-
tions and led by its 9.7 million mutual
shareholders and more than 30,000
directors of its local and regional
banks, Credit Agricole’s robust orga-
nizational model gives it stability and
staying power as a European group
open to the wider world.
Credit Agricole Group extends its
leadership year after year. It is the
number one provider of financing to
the French economy and the num-
ber one insurer in France. It is also
the leading bancassurer in Europe, a
top-ranked European asset manager
and the world’s largest green, social
and sustainability bonds bookrunner.
GROUP ORGANIZATION
9.7 million mutual shareholders un-
derpin Credit Agricole’s cooperative
organizational structure.
They own the capital of 2,447 local
banks in the form of mutual shares
and elect their representatives each
year. More than 30,000 directors
work in their best interests.
The local banks own the majority of
39 regional banks’ share capital.
Together, the regional banks own the
majority (56.6 %) of the share capital
of Credit Agricole S.A. via SAS Rue
La Boetie. Working with its specialist
subsidiaries, Credit Agricole S.A. co-
ordinates its various business lines’
strategies in France and abroad.
CREDIT AGRICOLE GROUP SERVES 52 MILLION CUSTOMERS WORLDWIDE, ADHERING TO CUSTOMER FOCUS, ACCOUNTABILITY AND COMMUNITY SUPPORT, THE ENDURING VA- LUES THAT HAVE BEEN ITS HALLMARK FOR OVER 120 YEARS.
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 1918 Translation from Ukrainian original Translation from Ukrainian original
Credit Agricole Bank has been oper-
ating in the financial market of Ukraine
for 25 years.
Nowadays, the bank offers the entire
range of banking services to private
individuals, including premium cli-
ents, and corporate customers.
Credit Agricole Bank belongs to the
group of the largest banks accord-
ing to the classification of the Natio-
nal Bank of Ukraine. The bank ranks
tenth in terms of assets among the
Ukrainian banks.
With 150 outlets, the regional net-
work of the bank covers all regions of
Ukraine. Credit Agricole Bank’s ATM
network comprises 310 ATMs.
The reliability and business repu-
tation of Credit Agricole Bank are
confirmed by the highest possible
Fitch’s ratings, leading positions in
the ratings of bank stability, reliability
of bank deposits and the most prof-
itable banks, as well as honors from
the leading Ukrainian media.
Over 300,000 active private and
18,000 corporate customers (includ-
ing more than 1,000 international
corporations and large local corpo-
CREDITAGRICOLE BANK
rate customers, more than 1,500 me-
dium-size corporate companies and
more than 15,000 representatives
of small and medium business) en-
trusted Credit Agricole Bank with the
handling of their financial issues. This
confirms the reliability and business
reputation of the bank.
The bank renders the full range of
services to business, paying special
attention to cooperation with agricul-
tural companies. Being a strategic
partner of the agri-agro segment,
Credit Agricole Bank provides a com-
bination of strong financial and agri-
agro expertise as well as innovative
solutions for the Ukrainian market.
Credit Agricole Bank holds solid po-
sitions and has sound expertise in
the car lending market. It was the first
bank in Ukraine to launch partnership
programs with car manufacturers
back in 2008. The bank cooperates
with more than 400 car dealers and
has exclusive partnerships with car
manufacturers. Credit Agricole Bank
is the only bank in Ukraine holding
an ISO 9001 certificate in the area of
car loans.
Credit Agricole Bank serves pre-
mium customers, the total number
of which exceeds 10,000. They are
offered exclusive service at the pre-
mium branch in the center of Kyiv as
well as in premium service centers in
the regions.
Credit Agricole Bank aims to be
among the TOP-10 digital banks in
Ukraine and makes a special focus
on IT innovations. The bank offers
its customers a wide range of digital
solutions, such as Internet and mo-
bile banking, contactless payments
and online transactions. 72 % of
customers are registered as internet
banking users.
Corporate social responsibility pro-
gram We Сare! launched in 2016 is
focused on green initiatives, charity
projects, employees’ welfare, and
ethical business.
The strong team of Credit Agricole
Bank consists of 2,315 employees
who share the bank’s values. All of
them are true professionals willing to
provide high-quality service to cus-
tomers.
Credit Agricole Bank did not acquire
shares in 2018.
150
300,000
10,0002,315
310
18,000
OUTLETS
CORPORATECUSTOMERS
ACTIVEPRIVATECUSTOMERS
OVER
PREMIUM-CUSTOMERS
EMPLOYEES
ATMs
CREDIT AGRICOLE BANK IS A MODERN UNIVERSAL BANK AND THE OLDEST ESTABLISHED FOREIGN BANK IN UKRAINE. THE BANK IS OWNED BY THE LEADING FINANCIAL GROUP IN EUROPE, CREDIT AGRICOLE GROUP (FRANCE).
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 2120 Translation from Ukrainian original Translation from Ukrainian original
Memberof the Supervisory Board
GERARDMARCHAND
Independent Memberof the Supervisory Board
KARLHEPP
Memberof the Supervisory Board
LAURENTBENNET
Independent Memberof the Supervisory Board
SERGIIFEOFILOV
Independent Memberof the Supervisory Board
VOLODYMYRPAVELKO
Memberof the Supervisory Board
FRANKSCHONHERR
Memberof the Supervisory Board
VERONIQUEBRILLAUD
Chairman of the Supervisory Board
STANISLAS RIBES
In view of bringing the activities of
joint-stock companies into compli-
ance with the Law of Ukraine “On
Amendments to Some Legislative
Acts of Ukraine on Simplification of
Running Business and Raising In-
vestments by Securities Issuers”,
the composition of the Superviso-
ry Board was updated by Decision
of the sole shareholder of the bank
No. 4 dated December 3, 2018 to
comprise eight persons (five repre-
sentatives of the shareholder and
three independent members).
EXECUTIVES AND OFFICIALS. AS AT 31.12.2018,THE COMPOSITION OF THE SUPERVISORY BOARD OF THE BANK IS AS FOLLOWS:
As of December 31, 2018, the Chair-
man of the Supervisory Board is
Stanislas Gerard Mari George Ribes,
who also holds the position of the
Deputy General Director in charge
of international retail business
and commercial banking, Credit
Agricole S.A., France.
The members of the Superviso-
ry Board are Gerard Marcel Lucien
Marchand, Frank Schonherr, Ve-
ronique Francoise Brillaud (Maire),
Laurent Pierre Henry Bennet, Karl
Marcus Sittikus Luis Hepp, Sergii
Leonidovych Feofilov, and Volody-
myr Anatoliiovych Pavelko.
The role of the Supervisory Board is
to represent the interests of share-
holders, protect their rights and exe-
rcise control over the activities of the
Management Board of the bank.
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 2322 Translation from Ukrainian original Translation from Ukrainian original
Deputy CEO in chargeof Corporate Businessand Capital Markets
LARYSABONDARIEVA
Deputy CEO,Chief Operational
Officer
JEAN-PIERREPALLARD
ManagementBoard Member,
Chief Risk Officer
HANSFERM
Deputy CEO in chargeof Retail Business
and Network
GALYNAZHUKOVA
ManagementBoard Member,
Compliance Officer
GUNTHERKOLLER
ManagementBoard Member,
Head of Developmentand Innovation
STEPHANEFALLICK*
ManagementBoard Member,
Chief Financial Officer
GIORGIOSOPRANZI*
Since 2015, the Management Board of the bank has been chaired by the CEO
JEAN-PAUL PIOTROWSKI
EXECUTIVES AND OFFICIALS. AS AT 31.12.2018, THE COMPOSITION OF THE MANAGEMENT BOARD OF THE BANK IS AS FOLLOWS:
The Management Board is the bank’s executive body managing its current activities and responsible
for its performance in line with the principles and procedures established by the Charter, decisions of
the General Shareholders Meeting and Supervisory Board of the bank.
* Decision on appointment was made on December 28, 2018.
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 2524 Translation from Ukrainian original Translation from Ukrainian original
ORGANIZATIONAL STRUCTURE
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 2726 Translation from Ukrainian original Translation from Ukrainian original
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 2928 Translation from Ukrainian original Translation from Ukrainian original
CORPORATEBUSINESS
In the corporate segment, Credit
Agricole Bank covers all legal enti-
ties all over Ukraine, except those
on the occupied territories. Credit
Agricole Bank serves and cooper-
ates with multinational corporations,
medium corporate business, agri-
business, and small and medium
business segment. Credit Agricole
Bank offers different products and
services: cash and current account
servicing, loans, trade finance trans-
actions, etc. At the end of 2018, the
loan portfolio for the Corporate seg-
ment was 20.1 bn UAH (increasing
by 10 % vs. 2017), and the deposit
portfolio was 20.1 bn UAH (increas-
ing by 4 % vs. 2017).
The target audience for the multina-
tional corporations (MNC) segment
is international companies and large
businesses with annual revenues
from 200 mn USD equivalent.
It is made up of more than 1,000 ac-
tive customers.
During 2018, the bank saw an in-
crease of operational volumes for
many of its clients, and new invest-
ment projects in several directions,
namely in agro, logistics, renewable
energy, and fast-moving consumer
goods (FMCG).
The target audience for the medium
corporate segment (MCC) is more
than 1,500 customers with annual
revenues from 10 mn USD equiva-
lent all over Ukraine, except the oc-
cupied territories.
After recovering in 2017, the medium
corporate sector demonstrated nat-
ural growth in 2018. The bank sup-
ported its existing customers and
also attracted new names, focusing
on transparent, reputable and sound
companies majorly from the agri-
agro, FMCG, retail and pharmaceu-
tical sectors, with the best profiles, a
low level of credit risk and zero com-
pliance risk as a target.
Focusing on customer needs, the
bank continued to improve its cur-
rent products and services, which
gave us an opportunity to gener-
ate a high level of commissions (the
highest level of commission income
in the last 5 years).
One of the key targets for us was
the development of trade finance
and documentary business, which
represented almost 20 % of the to-
tal business line assets in the high
season during the year.
The profitability of the bank’s me-
dium corporate business has in-
creased significantly, driven by an
18 % increase of the net banking
income in this sector in 2018 to
2017, and minus 20 % cost of risk
decrease in 2018 to 2017.
Customers appreciated a lot our ser-
vice offers, which lead to the high-
est level of net commission income
over the past 5 years in 2018. It is
necessary to note that over these
5 years, the share of net commission
income has increased significantly
and equals almost 20 % of the busi-
ness line net banking income.
Despite the stern competition in the
market of liabilities, MCC was able
even to improve the loan/deposit ra-
tio in local currency.
The bank provided a universal scope
of products, including (as corporate
products):
> current accounts and cash
management, with pay-
ments in local and foreign
currency;
> forex on spot and forward
terms;
> fixed deposits;
> loans;
> trade finance (letters of
guarantee, letters of credit,
operations with Promissory
notes, documentary collec-
tion (inkaso));
> i nves tment /d i ves tment
transactions (custody, bro-
kerage, escrow accounts,
squeeze-out).
Our successful cooperation with
partners was reflected in the busi-
ness segment results: 22 % growth
of net income YoY and low costs
of risk, and a significant increase
of the customer portfolio with
112 new legal entities, 85 of which
are international. Our customers
can benefit from the global offers
and presence of Credit Agricole
Group, and 16 of our new custom-
ers are also clients of other entities
of Credit Agricole Group.
FOCUS ON AGRO SECTOR
51 %SHARE
MCC:132NEW ACCOUNTS
FOR LEGAL ENTITIESWERE OPENED,
MNC:112NEW ACCOUNTS
FOR LEGAL ENTITIESOPENED, INCLUDING
65 %SHARE OF AGRI-AGROLOANS IN THE MEDIUMCORPORATE BUSINESS
LOANS PORTFOLIO
85FOR INTERNATIONAL
ONES
The current business model of
the bank is a harmonious combina-
tion of two directions:
close collaboration with
corporate business and
customer orientation and
the development of retail
business.
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 3130 Translation from Ukrainian original Translation from Ukrainian original
Agricultural Bank in Ukraine. The solid
achievements of Credit Agricole Bank
in this segment are based on the ex-
perience of Credit Agricole Group and
the dedicated agro team that has a
deep understanding of the agricultur-
al production specifics, development
strategy of the agricultural business
and the conditions in which the cus-
tomers operate, including climate,
economic and technological ones.
As a reference bank for market play-
ers, Credit Agricole Bank is fully
engaged in agro conferences and
agro forums. It participates in agro
exhibitions together with partners
(6 events in 2018) to stay close to real
businesses and their current needs.
During summer of 2018, Credit Agri-
cole Bank took an active part in the
so-called “field days” with its part-
ners, namely KUHN, EURALIS, local
John Deere dealers, etc.
Partnership programs allow the bank
and its partners to provide attractive
financing conditions to their clients.
In 2018, the bank signed 6 new part-
nership programs. As of the end of
2018, Credit Agricole Bank had 39
programs for working capital financ-
ing and investment needs. Within
partnership programs, working cap-
ital financing increased by 80 %, and
investment financing increased by
41 % during 2018.
SMALL
AND MEDIUM BUSINESS
For the small and medium busi-
ness segment, 2018 was the year
of further sustainable development
and enhancement. Despite the sig-
nificant toughening of the market
competition, the SME business line
greatly increased its loan portfolio
due to both existing and new cus-
tomers. The strategic focus was on
financing the target sector, agribusi-
ness. Combining classic and docu-
mentary finance, the bank was able
to satisfy individual working capital
needs of its customers, while the de-
velopment of partner relations with
the best manufacturers of agricul-
tural machinery ensured attractively
priced long-term financial support
for the investment plans of enterpris-
es. Through high service standards
and close cooperation with cus-
tomers, the business line ensured
stable deposit raising and became
the second biggest liquidity provider
in the bank. Dedicated teams in all
regional centers of Ukraine allowed
the bank to be as close to small and
medium-size customers as possible
and to promptly satisfy their needs.
Further business process optimiza-
tion, improvement of the car lending
platform, and the launch of modern
Internet banking not only positively
influenced the results of 2018 but
also created a sound foundation for
future development.
AGRIBUSINESS
Agribusiness is one of the stra-
tegic sectors for Credit Agricole
Bank, which is a visible player in the
Ukrainian agro market. Credit Agri-
cole Bank is a reference bank and
opinion leader on the banking mar-
ket for agricultural clients. The bank
is involved in numerous Ukrainian
agrarian projects and supports de-
velopment and innovations in the
agrarian sector.
The bank cooperates with multina-
tional corporations (inputs suppliers,
traders, agro processing compa-
nies), large and highly efficient agri-
cultural holdings, medium-sized agro
enterprises and small farming entities
that have a good reputation and pro-
fessional management teams. Credit
Agricole Bank is servicing all players
of the agro value chain: input supply,
production, trade, processing and
export. Credit Agricole Bank offers a
wide range of products to agro cli-
ents, such as seasonal pre-crop and
stock financing, investment loans (fi-
nancing of storage and drying facili-
ties, agro machinery, etc.)
According to a GFC Ukraine (a
Ukrainian research company) survey,
Credit Agricole Bank has a 68 % cus-
tomer recommendation index (CRI) in
the agri sector, which is the highest in
the market. In 2018, the bank won Fi-
nancial Oscar Awards as the Leading
6 NEWPARTNERSHIP
PROGRAMSSIGNED IN 2018
2.5 BN UAH
LOAN PORTFOLIO
3.2 BN UAH
LIABILITIES
141 MN UAH
LEVEL OF COMMISSIONS
+38 %INCREASE OF SME LOANS NET
OF PROVISIONS VS. 2017
+19 %INCREASE OF SME DEPOSITSIN ALL CURRENCIES VS. 2017
+8 %VS. 2017
OVER 20AGRO EVENTS
SUPPORTEDBY THE BANK
IN 2018
15,600SME CUSTOMERS
8 %MARKET SHAREIN AGRI LOANS
OVER
3,000ACTIVE AGRI AGRO
CLIENTS
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 3332 Translation from Ukrainian original Translation from Ukrainian original
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 3534 Translation from Ukrainian original Translation from Ukrainian original
In 2018, the key tasks for the retail
business were:
Focus on acquisition of af-
fluent and mass affluent
customers
Confirmation of leading po-
sitions in the car lending
market
Increase in cash loan port-
folio amount, in particular
by optimizing product and
distribution channels
Strengthening the bank’s
position in the premium
banking market
Transformation of the
bank’s branch network
Optimization of the retail
product range, transfer to
packaged customer service
Implementation of projects
aimed at digital banking de-
velopment
LENDING
Leading position in car lending
In 2018, Credit Agricole Bank re-
mained the leader in the car loan
market, which is confirmed by the
following results:
About 30 % market share.
2.2 bn UAH total loans issued over
the year.
Successful cooperation with over
400 car dealers and 16 car brands,
ongoing improvement of partnership
programs, transparent lending terms
and high level of customer service
allow us to positively evaluate the ac-
tivities in 2018 and to feel optimistic
about the future.
RETAIL BUSINESSAND NETWORK
Strengthening of the lending
position of our customers
This area was a priority for Credit
Agricole Bank in 2018. Key prod-
uct parameters were modified for a
substantial loan portfolio increase:
the maximum loan amount was in-
creased to 500 k UAH, and the pric-
ing was revised.
It stands to mention the bank’s ac-
tive participation in the IQ ENERGY
program that brought about a posi-
tive effect. As a result of its success-
ful operation, the bank reached the
record amount of cash loan produc-
tion (almost 950 mn UAH at the end
of the year).
Increased credit card issue
A positive trend of credit cards
number increase recorded in 2017
continued in 2018. More than
20,000 customers received this
product via the bank’s outlets.
Packaged services
In 2018, the customers of Credit Ag-
ricole Bank could enjoy the benefits
of the new packaged offers. The key
packages – Light, Smart and Premi-
um – were developed to satisfy the
needs of both individual customers
(including salary projects) and pri-
vate entrepreneurs. Since the start
of the program, the bank has sold
more than 21,000 packages.
Premium banking
The development of premium bank-
ing began 6 years ago. Nowadays,
more than 10,000 premium custom-
ers can be sure of the quality of pre-
mium services from Credit Agricole
Bank.
In 2018, Credit Agricole Bank was
fourth in the overall ranking and won
the Social Impact Investing nomina-
tion, according to the Private Bank-
ing and Wealth Management Survey
in EUROMONEY 2019.
According to banking sector ex-
perts, premium banking service from
Credit Agricole Bank also confirmed
its position among the TOP 3 banks,
as reported by Ernst & Young Ukraine.
These acknowledgements have rein-
forced the ongoing implementation of
Credit Agricole Group’s international
standards of service, as well as care-
ful attention paid to every customer.
The bank believes that saving and in-
creasing the customers’ capital is not
only closely linked to the diversity of
financial instruments but also a deriv-
ative of risk and compliance culture.
The year end was marked by some
cheering news for premium banking
customers: the launch of the exclu-
sive Sommelier package that com-
bines the best financial solutions and
fine wine philosophy.
292,000INDIVIDUAL CLIENTS,
OVER 10,000PREMIUM-CUSTOMERS
4 %MARKET SHAREOF RETAIL LOANS
310 ATMs
150 OUTLETS
THROUGHOUT UKRAINE
944 MN UAH
CASH LOANS ISSUED IN 2018
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 3736 Translation from Ukrainian original Translation from Ukrainian original
2018 was marked by a significant in-
crease in the number of digital service
users, especially through the mobile
channel. Moreover, it became much
easier to begin using i-Bank with
the new registration procedure that
does not require a personal visit. The
customers’ wish to receive remote
services is evidenced by figures: the
number of online transaction users in-
creased 1.5 times, while the amount
of products ordered online exceeded
100 mn UAH. However, the “classic”
branches were not overlooked either:
the bank kept equipping them with
latest online service devices and fully
upgraded the Wi-Fi network.
Proactive approach, convenience
and comfort. The customer does not
need to move around or wait in the
queue to get a product or a service
since managers use laptops and can
consult them and perform fast trans-
actions anywhere.
Confidentiality. Separate negotiation
rooms that provide full confidentiality
when consulting customers.
Expertise. The team created togeth-
er with the bank’s senior manage-
ment includes specialists with vast
experience both at Credit Agricole
and other institutions.
Zoning and space arrangement
The customer service area is
equipped only with items designed to
be used by customers. The self-ser-
vice zone operates 24/7. Most sim-
ple and common transactions can
be performed via self-service ter-
minals and cash-in ATMs. The In-
ternet banking zone has tablets and
state-of-the-art touchscreens for
free access to Internet banking as
well as for obtaining information on
products and services on the official
website of Credit Agricole Bank. The
waiting area has comfortable de-
signer armchairs that make custom-
ers almost invisible while getting fast
consultations.
Insurance products
Year on year, Credit Agricole Bank
confirms its high performance in
various retail business areas. Insur-
ance products are among the most
appraised: the bank sold more than
76,000 insurance policies through its
network.
New network philosophy
2018 confirmed the relevance of the
bank’s strategy for branch network
transformation. The new branch
concept is based on the wishes and
needs of customers. Upgraded out-
lets offer a completely new approach
to customer service through internal
zoning and space arrangement as
well as innovations in the proposed
services and work processes.
Credit Agricole Bank continues to
deepen its relations with target cus-
tomer segments by opening new
model branches. They combine digi-
tal technologies and employees’ high
expertise. The concept is based on
the following key principles:
Personalized service. Each custom-
er is allocated to a personal manager
who can provide the entire range of
services and advice. Each manager
is universal, i.e. has sufficient knowl-
edge to provide basic services in any
customer segment. Therefore, there
is no classic zone segregation for
serving individuals and legal entities
in the new model branch.
Premium zones
Some branches have special zones
that provide the highest level of
comfort and privacy for premium
clients. Successful implementa-
tion of the network transformation
project did not only positively influ-
ence the financial result of the bank
but was also highly appreciated by
Credit Agricole Group experts. New
model branch of the bank was rec-
ognized as the Best Branch 2018
in Ukraine at the international Open
Fintech Forum 2018. In 2018, the
bank transformed 9 branches and
started the transformation of the
corporate center in Lviv. 15 more
new model branches are expected
in 2019 (including 5 premium zones
and 2 corporate centers in different
regions of Ukraine).
Credit Agricole Bank continues to
upgrade its sales network and we
are happy that 9 outlets of the bank
were successfully transformed in
2018. Credit Agricole Bank wants to
be where its clients are, so it strives
to ensure high-quality service and
comfort not only in Kyiv but in the re-
gions as well. Today, the bank keeps
implementing the concept of a mod-
ern, comfortable and reliable bank in
the new branches. Credit Agricole
Bank combines an individual ap-
proach, confidentiality and unchal-
lengeable expertise. Credit Agricole
Bank is not ready to rest yet and is
preparing new branches to open in
different regions of Ukraine.
30 %MARKET SHAREOF CAR LOANS
51,000CUSTOMERS RECEIVED CAR
LOANS (ACCUMULATED VALUE)
76,000INSURANCE CERTIFICATES
/48,000,000
INSURANCE PREMIUMS
2.2 BN UAH
CAR LOANS ISSUED IN 2018
OVER 400PARTNER CAR DEALERS
DIGITAL:
211,000INTERNET BANKING USERS
DIGITAL BANKING DEVELOPMENT AND TECHNOLOGICAL INNOVATIONS
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 3938 Translation from Ukrainian original Translation from Ukrainian original
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 4140 Translation from Ukrainian original Translation from Ukrainian original
RATINGS AND AWARDS
HIGHEST POSSIBLENATIONAL LONG-TERM
RATING IN UKRAINE,
AAALONG-TERM ISSUERDEFAULT STABILITY
RATING (IDR) IN FOREIGNCURRENCY: B-,
THE OUTLOOK IS STABLE(MAY, 2018)
STRONG TEAM OF TOP MANAGERS:
JEAN-PAUL PIOTROWSKI
TOP 10IN THE BEST TOP-
MANAGER OF THE BANK(TOP-50 LEADING BANKS
RATING BY FINCLUB)
TOP 20MOST INFLUENTIAL
PERSONS IN UKRAINE’S FINANCIAL SECTOR
(VLAST DENEG)
LARYSA BONDARIEVA
TOP 5THE BEST
CORPORATE BANKER(TOP-50 LEADING BANKS
RATING BY FINCLUB)
TOP 20THE MOST
SUCCESSFUL WOMENOF UKRAINE
(VLAST DENEG)
TOP 50LADIES OF THE FINANCIAL
SPHERE (BUSINESSMAGAZINE RATING)
GALYNA ZHUKOVA
TOP 5IN THE BEST RETAIL
BANKER NOMINATION(TOP-50 LEADING BANKS
RATING BY FINCLUB)
68 %CLIENT RECOMMENDATIONINDEX (CRI) IN AGRI/AGRO, WHICH IS THE HIGHEST IN UKRAINE (ACCORDING TO
GFK-UKRAINE)
The Best Branch(FIRST NEW MODEL BRANCH IN PODIL)
ACCORDINGTO FINAWARDS 2018
BUSINESSMAGAZINE RATINGS
FINANCIAL OSCAR
The BestAGRARIAN BANK
TOP 5SME SUPPORT
NOVOIE VRIEMIA(TOGETHER WITH DRAGON
CAPITAL INVESTMENTCOMPANY)
TOP 3MOST RELIABLE
FINANCIAL INSTITUTIONS
TOP 50 LEADING BANKING RATINGS (FINCLUB
INFORMATION AGENCY)
FIRST IN CAR LOANS
TOP 5IN SERVICING
OF LEGAL ENTITIES,LOANS FOR SME, CASH LOANS,
MORTGAGE LOAN
TOP 10IN PREMIUM BANKING,
SALARY PROJECTS,SERVICING OF INDIVIDUALS
IN OFFICES, SAVING DEPOSITS,OVERDRAFTS
VLAST DENEG RATING
TOP 20FOREIGN INVESTORS
IN UKRAINE
REPUTABLEACTIVISTS RATING
TOP 5BANKS WITH THE BEST
REPUTATION
LAUREATEPROSTOBANKAWARDS 2018
The BestIN THE MARKET
OF THE ACCOUNTINGAND CASH SERVICES
(CLASSIC)
3rdAMONG THE PROGRAMS
OF SETTLEMENTAND CASH SERVICES
(BUSINESS)
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 4342 Translation from Ukrainian original Translation from Ukrainian original
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MANAGEMENTGOALSAND STRATEGYFOR THEIRACHIEVEMENT
EXISTING PRIORITIES, CRITERIA FOR MEASURING SUCCESS AND ASSESSING
ACHIEVEMENTS, SIGNIFICANT CHANGES IN GOALS DURING THE REPORTING PERIOD
and highest-rated banks in Ukraine
as it supports a high level of returns
based on the controlled cost of risk.
All this allows the bank to offer the
best service to its customers where
and when they need it the most by
adding new communication chan-
nels and expanding the range of its
modern digital services.
Annually the bank’s consistent goal
is to remain a trusted partner for cli-
ents by supporting their plans and
needs based on full transparency
and unquestionable ethics.
In the medium term, Credit Agricole
Bank is aiming to be among the
TOP 3 international banks recog-
nized by clients as an expertise ref-
erence in sectors with high growth
potential.
In order to achieve these strategic
goals, the bank will be focused on
balanced development in all busi-
ness segments.
1. THE MAIN FOCUSES IN CORPORATE
AND AGRO PERIMETERS:
Further strengthening of the bank’s position as the mar-
ket leader for multinational and large corporate clients,
including through deeper cooperation with foreign mem-
bers of Credit Agricole Group.
Dissemination of advanced banking experience in for-
eign investments and trade finance, as well as expertise
in the capital markets area.
Enriching customer service via specialized solutions and
expanding the range of daily digital and online services.
Keeping of opinion-maker position and expertise leader
in agricultural sector, which is confirmed by the highest
index of consumer recommendations.
2. MAIN DEVELOPMENT DIRECTIONS IN RETAIL
BUSINESS AND PREMIUM-BANKING:
Strengthening the client-oriented model of cooperation
with private individuals for an impeccable client experi-
ence (including by the results of verified polls).
Creation the most comfortable service for premium cli-
ents, which corresponds to their sophisticated needs.
Becoming a simple and clear partner for private entre-
preneurs and micro-business.
Maintaining the leading position in car financing and be-
ing recognized in the field of consumer finance.
Creating a benchmark for the market in the field of cash
loans, credit cards, salary projects and bancassurance.
Being a modern, universal and
the oldest foreign bank in Ukraine,
Credit Agricole Bank offers a full
range of banking services to all cus-
tomers: from individuals and pre-
mium clients to large multinational
businesses.
The key factor of success for Credit
Agricole Bank is further support and
development of a solid and sustain-
able business model enriched with
the best practices of Credit Agri-
cole Group. Today, Credit Agricole
Bank is one of the most profitable
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 4746 Translation from Ukrainian original Translation from Ukrainian original
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 4948 Translation from Ukrainian original Translation from Ukrainian original
In 2018, the Ukrainian banking mar-
ket was marked by the rapid de-
velopment of digital technologies,
improvement of remote customer
service, and increased number of
digital users. Credit Agricole Bank
proceeded with the strategy it start-
ed implementing two years ago to
let its customers perform their daily
transactions simply and with com-
fort, and to manage funds from a
smartphone or a PC in a few clicks.
Thus, in 2018, the Internet Banking
(i-Bank) functionality expanded sig-
nificantly. New options include bill
payment services, setting an individ-
ual login and opening deposits on-
line, and there is a new registration
procedure that does not require a
branch visit. As a result, the number
of i-Bank users has increased a third
as compared to the previous year.
Mobile services and applications
become more and more popu-
lar with customers. To make them
more convenient, the bank add-
ed advanced mobile authenti-
cation methods – Touch ID and
Face ID – and contactless payments
via Google Pay. The number of CA
Mobile application users more than
doubled in 2018.
The digital transformation of branch-
es started by the bank two years ago
is gaining momentum: 9 new model
branches were opened this year, and
15 more are expected in 2019. More-
over, the bank continued to equip the
existing branches with modern digital
tools. Thus, one-third of the branch
network provides customers with ac-
cess to digital services through Inter-
net Banking Zones and an upgraded
Wi-Fi network.
DIGITAL BANKING AND OTHER RESEARCH AND DEVELOPMENT ACTIVITIES
to other staff by organizing internal
express training, and it keeps intro-
ducing the novelties of digital tech-
nologies to their colleagues and
holds educational events.
In 2018, the bank visibly enhanced
its positions as a partner to the IT
industry and a startup ecosystem.
It was Credit Agricole Bank that be-
came a financial partner of Lviv IT
Arena, the biggest IT event in East-
ern Europe. Representatives of the
bank acted as experts and honor-
ary jury members at several startup
competitions in Lviv and Kyiv. Next
year, Credit Agricole plans to con-
tinue to support innovative projects
and to take part in the most ambi-
tious IT events, conferences and
startup competitions.
TECHNOLOGICALRESOURCES USED BY THE BANK:
BUILDING AND MAINTENANCE OF TECHNOLOGICAL EQUIPMENT OF THE BACKUP SITE, REGULAR DRP (DISASTER RECOVERY TEST) AND BCP (BUSINESS CONTINUITY PLAN) TESTS.
SCHEDULED UPGRADING OF NETWORK AND WORKSTATION IT EQUIPMENT.
IN-HOUSE DEVELOPMENT AND ONGOING UPGRADING OF THE CORE BANKING SYSTEM.
MAINTENANCE AND UPGRADE OF INFORMATION MODULES USING NEW COMMUNICATION CHANNELS.
TRANSPARENT SUPPLIERSELECTION POLICY.
FULL COMPLIANCEWITH LICENSING POLICIES.
BUILDING NEW MODEL BRANCHES USING THE LATEST TECHNOLOGIES, MODERN EQUIPMENT AND COMMUNICATION CHANNELS.
COMPREHENSIVE MEASURES FOR ACQUISITION AND BUILDING THE INFORMATION SECURITY SYSTEM TO MITIGATE THE RISK OF EXTERNAL INTRUSION INTO THE NETWORK.
Among the bank’s important new
projects is the RPA (process au-
tomation and robotization) project
that allows significantly improving
the efficiency of banking process-
es by replacing human labor with a
robotized algorithm. The project is
aimed not only at speeding up data
processing but also at enabling the
bank staff to focus on more diverse
and important tasks.
Not only the technologies but also
practices of the bank were subject
to transformation. This year, Credit
Agricole Bank has officially started
to employ “agile” practices. For that
end, project participants and Board
Members took a prior training course
with certified SCRUM trainers. More-
over, the Digital Community, which is
an action group of bank employees,
passed the obtained knowledge
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 5150 Translation from Ukrainian original Translation from Ukrainian original
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RISK MANAGEMENT FRAMEWORK AND ITS MAIN PRINCIPLES
RISKMANAGEMENTSYSTEM
Risk Management Framework in
Credit Agricole Bank is as follows.
Bank Strategy
The Strategy fixes the bank’s Me-
dium-Term Development Plan. To-
gether with the bank’s budget, the
Risk Policy is structured to align with
the Strategy.
Risk Appetite framework
The risk appetite framework (RAF)
consists of all bylaws, procedures,
processes, controls and systems
which are used to formulate, apply,
communicate and oversee the risk ap-
petite of the bank in accordance with
the National and European regulator.
In particular, the Risk Appetite
framework is expressed through the
Risk Appetite Statement (RAS).
The RAS sets the level and types
of risks that the bank is willing to
accept or avoid in order to achieve
its business objectives. It includes
qualitative statements as well as
quantitative measures expressed
relative to capital, risk measures, li-
quidity and other relevant measures
as appropriate.
The RAS is closely integrated into
the bank’s other structural process-
es, such as risk strategy drafting
and the budget process.
The RAS is aligned with the bank’s
global strategy and provides a com-
mon framework and comparable
measures for the Management
Board to communicate, under-
stand, and assess the types and
level of risk that the bank is willing
to accept. The RAS includes the key
indicators required by CASA and
those that the bank deems neces-
sary to define the risk appetite. The
RAS covers the whole scope of
risks types, such as credit, liquidity,
market, operational and compliance
risks, and sets out the key risk indi-
cators (with an essential impact on
bank’s activity) and other limits and
thresholds (minor impact). The risk
appetite, risk tolerance and risk ca-
pacity levels must be determined in
this statement.
Risk Appetite is the level of risk that
the bank is willing to accept in order
to achieve its strategic objectives,
given its overall financial capacity
and its scarce resources (liquidity,
solvency, etc.).
Risk Tolerance is the budget target
for the entities for which such a tar-
get is set, or less subject to CASA
approval supporting the entity’s jus-
tification.
Risk Capacity is the maximum level
of risk the bank can assume given
its current level of resources before
breaching the constraints deter-
mined by the regulatory capital and
liquidity needs. Corresponds to min-
imum CET 1 regulatory levels and to
stressed liquidity below the limits
approved by CASA.
BANKSTRATEGY
BYLAWS,PROCEDURES, PROCESS MAPS,
INSTRUCTIONS AND OTHER GUIDELINES
RISK POLICY
RISK STRATEGY
RISK APPETITE
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 5554 Translation from Ukrainian original Translation from Ukrainian original
RISK STRATEGY
The Risk Strategy sets out the ap-
proved CRG limits, caps, operation-
al limits and other constraints set
up by CRG based on the CRG pre-
sentation made by the CA-Ukraine
Lines of Business (LoB) and ALM/
Treasury, in an operational context.
It also provides an overview of the
risk management & monitoring
mechanism, delegations, and the
current risk profile of CA Ukraine’s
credit portfolios.
The Risk Strategy defines:
> Target markets and their
general characteristics.
> Target lending areas by
the economic sector, geo-
graphic regions, and cur-
rencies.
> General acceptability crite-
ria for lending.
> Collection approaches.
> Principles of concentration
risk management.
The Risk Strategy is based on the
CRG presentation, drafted and ap-
proved on an annual basis accord-
ing to the rules set by CASA.
CRG presentation is approved once
per year (usually in Q3/4) and re-
viewed if needed.
Risk Strategy Manual is the opera-
tional guidance approved once per
year and reflecting the approved
CRG limits and other operational
rules to follow when performing risk
operations.
RISK POLICY
The Risk policy defines the main ob-
jectives and tasks as well as the Risk
Management Framework in Credit
Agricole Bank, main approaches
and basic ways for its realization.
The purpose is to set out high-level
principles for the bank’s risk man-
agement. The covered risks are
credit, financial and operational
risks. The high-level principles for
the bank’s risk management are
subject to regular review and ap-
proval by the Management Board
and the Supervisory Board.
The high-level principles of risk man-
agement are implemented through
bylaws, procedures, instructions
and other internal methodology ac-
cording to the risk type.
CREDIT RISK
Credit risk is incurred when granting
credits to counterparties or groups of
counterparts. Its key components are
market, counterpart and facility risks.
The purpose of credit risk manage-
ment is to establish a sound asset
portfolio, and the main tasks are:
Credit risk assessment by the deals
with a Client/Group of Clients (new
credit limits, annual reviews, modi-
fications request, etc.) and prepa-
ration of the risk opinions with a
summary and risk recommenda-
tions for the Credit Risk Committee.
Improvement of the defined portfo-
lio quality via proactive identification
of sensitive cases, and predicative
definition of action plans (individ-
ual strategies) targeted to reduce
watchlisted clients.
> Proactive identification of
sensitive/distressed clients.
> The following internal docu-
ments are developed to de-
tect, measure, monitor and
control credit risk:
> Bylaws for assessing finan-
cial standing of the PI, PE
and LE Borrowers.
> Procedure for the assess-
ment of the bank’s counter-
parties’ financial conditions.
> Indirect credit risk: proce-
dure for assessing insur-
ance companies’ financial
conditions and liability limits
calculation.
> Procedure for control over
credit risk concentration.
> Bylaws on Credit Risk Mea-
suring.
> Bylaws on provisioning to
IFRS.
Credit risk management is regulated
by the following documents:
> Risk Strategy Manual.
> Lending bylaws, proce-
dures and methodological
recommendations per each
business line define the dis-
tribution of the participants’
functional duties in the pro-
cess, their authority, respon-
sibility and the coordinated
actions, the main approach
to the lending activities.
> Credit Committee Bylaws
outline the credit deci-
sion-making procedure and
different delegation levels.
> Rules of procedure on the
Scorecards and Business
logics Backtesting Commis-
sion. Product Standards for
each business line describe
the general loan, documen-
tary operations and for-
wards conditions, the list
of documents for a client’s
financing, loan review ap-
proaches, and the main ex-
ceptions of financing.
> Procedures for pledge as-
sessment and monitoring
and procedures for other
types of collateral outline
the general requirements to
the collateral.
> Watchlist procedure, pro-
cedures for working with
distressed clients (LE, PI,
PE) with regard to early
detection and managing
non-performing loans.
During the crisis of 2014–2016, the
Risk Strategy of the bank was to
centralize decision-making from
lower committees, focus on key
sectors, and to introduce tight re-
quirements to clients and products
in order to secure a good risk pro-
file of the bank. In the post-crisis
2017/2018, the Risk Strategy pro-
gressively made decision-making
easier by delegating back to lower
committees and reducing the risk
requirements to a client’s profile
(though still keeping them high),
allowing cautious growth in some
sectors/segments. However, de-
spite adopting the Risk Strategy for
the recovering economic environ-
ment, the general risk approach re-
mained cautious.
The RAS is reviewed and approved
once a year (or more frequently, if
there are any changes) and is subject
to the Supervisory Board’s approval.
The follow-up on the risk appetite
level within the Risk Appetite Dash-
board (RAD) is given on a regular
basis (usually quarterly). It implies
regular reporting on the achieved
level of risk appetite (within the
reporting period) in comparison
with the RAS to the relevant deci-
sion-making body. The RAD is con-
sidered by the Management Board
and Supervisory Board to monitor
the level of risk appetite and ensure
the availability of efficient and com-
prehensive action plans proposed
for degraded indicators (if required),
in respect to the approved RAS.
The Risk Appetite is based on the
color range with the following scale:
Green (appetite level) usually reflects
the budget risk level.
Yellow (tolerance) and Red (capac-
ity) mean that the management
should be informed during the next
committee meeting, and corrective
measures/action plan are required.
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 5756 Translation from Ukrainian original Translation from Ukrainian original
FINANCIAL RISK
Financial risks follow from market or
liquidity risks:
Market risk
The main purpose of market risk
management (particularly, currency
risk, interest rate risk, price risk) is to
maintain it at an acceptable level op-
timal for the bank’s strategic goals.
Liquidity risk
The purpose of liquidity risk man-
agement is to maintain an accept-
able level of the aforesaid risk, which
is determined by the bank pursuant
to strategic goals.
The bank is committed to the prin-
ciples of a double-level system of
financial risk management based
on the correspondence of the risk
management system to the risk es-
sence:
Level 1: trading portfolio risk man-
agement. A portfolio of the bank’s
positions that are most sensitive to
daily market fluctuations and could
generate essential losses even by in
one banking day. Trading portfolio
risks management is performed on
a daily basis via an extended system
of indicators calculated by special
mathematical tools.
The bank’s positions in the trading
portfolio are defined by standalone
internal documents of the bank and
approved by the Market Risks Com-
mission (MARCO).
Level 2: global risk management of
the bank. Methods, instruments and
a system of limits used at this lev-
el are applied to the measurement/
limitation of market risks inherent to
all open positions of the bank in ag-
gregated form (banking book). The
management of such risks is related
to the inertia (low speed of essential
changes) of the banking book, and
therefore it is performed via strate-
gic actions.
Core decision-makers are the As-
sets and Liabilities Management
Committee (primary body for deci-
sion making), the Treasury Commis-
sion and MARCO, each in their own
powers.
The process of detection, mea-
surement, monitoring and control
of financial risks is ensured by the
following departments according to
their main functions:
Assets and Liabilities Management
Department: monitoring the bank’s
balance sheets, carrying out finan-
cial modeling, stress-testing of li-
quidity, IRR and capital, strategies
and tactics on assets and liabilities
management, calculation and anal-
ysis of liquidity and IRR, long-term
liquidity planning, planning of capital
and obligatory ratios in the part of
capital adequacy, liquidity and open
currency position.
Financial Risks Department: recon-
ciliation of recommendations and
action plans relative to minimizing
market and liquidity risks, approving
methodologies and internal models
of market and liquidity risk manage-
ment, organizing process of design-
ing/updating limits and their size on
market risks, liquidity risks, and their
conformance by the respective units
of the bank and the holding compa-
ny Credit Agricole S.A.
Treasury Department: short-term
and instant liquidity management,
adherence to the NBU ratios and
adjustment thereof using treasury
instruments, management of open
currency position of the bank within
the established limits and in coordi-
nation with the ALM Department.
Methodologically financial risks
management is also supported by
the following documents:
> Bylaws on market risks
management.
> Bylaws on liquidity risk
management.
> Rules of interbank limits
post-control.
> Rules of Procedure of Mar-
ket Risks Commission.
> Financial Policy.
> Group documentation.
OPERATIONAL RISK
The risk of losses resulting from
inadequate or failed internal pro-
cesses, human errors, or systems,
or from external events, including
legal risk; operational risk includes
risks associated with low-probabili-
ty, high-impact events.
Operation risk management in
Credit Agricole Bank is well orga-
nized and has the following phases:
1. Identification. Operational risks
are identified within operational risk
mapping exercise, loss data collec-
tion process, and permanent con-
trol system roll-out.
2. Assessment. Operational risks
are assessed by means of analysis
and forecasting of the risk prob-
ability and consequences of their
realization. The risk sensitivity of
the bank is defined by the aversion
matrix which describes a graduated
scale of risk consequences by fi-
nancial and non-financial impact.
3. Mitigation. Operational risks are
mitigated through the avoidance (re-
designing and optimization of pro-
cesses), limitation (implementation
of controls, establishment of limits
or indicators), transfer (insurance) or
acceptance of risks.
4. Monitoring. Operational risks are
monitored through the observation
of limits (for instance, BIN limits for
payment cards), key risk indicators
and follow-up action plans.
5. Reporting. Operational risk
management results are quarter-
ly reported to the Internal Control
Committee (ICC) responsible for op-
erational risk oversight. Reporting is
based on operational risk mapping
results, loss data collections results,
results of permanent controls’ indi-
cators calculation and results of ac-
tion plan monitoring.
6. OR Risks Appetite analysis based
on the OR threshold calculation. The
main are sensitive and significant in-
cident, pure OR cost of risk/NBI.
7. Insurance coverage is used by the
bank to mitigate operational risks
(the most sensitive ones).
Methodologically, operational risk
management is supported by the
following documents:
> Operational risk manage-
ment bylaws.
> Procedure for collecting
data on operational events.
> Operational risk stress test
procedure.
> Internal order documents.
> Group documentation.
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 5958 Translation from Ukrainian original Translation from Ukrainian original
PERMANENT CONTROL SYSTEM
AS A PART OF INTERNAL CONTROL SYSTEM ORGANIZATION
According to the standards of the
Group, the internal control system of the
bank consists of three lines of defense.
In general, the areas of responsibility
for operational risk management are
organized on the effective second
line of defense and keep under con-
trol the first one.
A permanent control system is
rolled out in the Credit Agricole
Bank to organize the second line
of defense and to keep the first
one under observation. The per-
manent control system covers
the main bank activities such as
credit activity, operational ac-
tivity, financial risk, accounting
transactions, operational risks,
compliance, information security
and business continuity, physical
security, OES activity, recovery
processes, etc.
CRO is responsible for the effec-
tive functioning of the permanent
control system. The Risk Control
3rd LINEOF DEFENCEAudit
3rd LEVEL
2nd DEGREE2nd LEVEL
2nd DEGREE1st LEVEL
1st DEGREE
Staff independentof the entitiesand servicesthey are monitoring
Staff with no commitment-related duties
Different stafffrom those who madethe commitmentto the transaction
Staff at the inseptionof the transaction(self-monitoring)
Department and Compliance are
responsible for its maintenance and
completeness in accordance with
the Group’s methodology and local
requirements.
In the case of negative control re-
sults, an action plan is launched
in order to correct the deviations
DATA COLLECTION ON OPERATIONAL RISK (OR) INCIDENTS
Collection and analysis of data on operational risk incidents are one of the
areas of operational risk management (ORM), implying the organization of
the system of collection, registration, analysis of operational risk realization/
potential realization incidents (including fraud risk) and development of the
respective action plans to mitigate the identified risks.
In 2018, the main loss-generating categories were execution delivery and
process management; clients, products and business practices.
OPERATIONAL RISKS MAPPING CAMPAIGN
Mapping of operational risks in the bank’s processes (mapping) is a cam-
paign on periodic identification and assessment of operational risks and
process controls of the bank. Mapping is performed based on the list of
business processes approved in the bank and the risk categories proved by
the Group. The number of sensitive/critical processes was relatively stable in
the last ORM campaigns.
2nd LINEOF DEFENCERisk management business lineCompliance business line
1st LINEOF DEFENCEOperational business line
and improve process controls.
In the course of operational risk
management and in order to keep
the operational risk level on the
first line of defense under control,
Credit Agricole Banks’ Operation-
al Risk Team participates in ana-
lyzing the processes (including
deployment of new IT systems,
products, projects, etc.) and inter-
nal documents of the bank, gives
recommendations on operational
risk mitigation, and participates in
working groups as operational risk
experts.
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 6160 Translation from Ukrainian original Translation from Ukrainian original
CAPITAL
At the end of December 2018, the reg-
ulatory capital, including the earning
of the year, came to over 4.7 bn UAH,
increasing by 1.1 bn UAH vs. the end
of 2017. The main driver of the cap-
ital increase was the shareholders’
support: they decided to leave a part
of the profit at the bank’s dispos-
al (by increasing reserves’ funds by
0.7 bn UAH). Due to that, the weight
of Tier 1 in capital structure reached
55 % (+3 p.p. vs. December 2017).
Other factors that influenced the
change of the regulatory capital were:
> Profit increase.
> Decrease of NCR (non-cov-
ered credit risk).
> Sub-debt amortization.
At the same time, the amount of Risk
Weighted Assets (RWA) increased by
5,5 bn UAH up to 25 bn UAH, main-
ly due to loans to customers. As the
result, the capital adequacy ratio (N2)
increased by 0.27 p.p. up to 19.4 %
(minimum regulatory level is 10 %),
and the bank continues to demon-
strate a strong capital position.
LIQUIDITY
Customer deposits are the basis of
the comfortable level of liquidity of the
bank, both in hryvnia and in foreign cur-
rency. Credit Agricole Bank’s deposits
portfolio amounted to 27.1 bn UAH by
the end of December 2018, having in-
creased by +4 %, or by +1.0 bn UAH
in comparison with the end of 2017.
Credit Agricole Bank’s liquidity excess
in FCY is kept on on-call accounts in
foreign banks with investment class.
The available liquidity buffer in hryvnia
is placed in liquid instruments of the
NBU and the Ministry of Finance of
Ukraine (CDs and T-bills).
The main objective of short-term li-
quidity management is to ensure that
the bank is able to meet its on-bal-
ance-sheet payment commitments,
expected and unexpected, so as not
to prejudice its normal business, daily
operations and financial position. The
key condition for achieving this objec-
tive is the constant maintenance of a
sufficient balance between incoming
and outgoing liquidity flows in the
perspective of continuously support-
ing normal banking operations.
The bank keeps all obligatory liquidity
ratios at a high level, including the new
one, liquidity coverage ratio (LCR)
(137 % in total currencies and 181 %
in FC). LCR calculated according
to the Group’s methodology is also
maintained at a high level (178 %).
The bank has established itself as
an active market participant for both
foreign exchange and money market
trading and short-term liquidity man-
agement purposes, as well as for sales
activities, where it offers a wide range
of financial products to its customers.
The bank’s corporate and private cli-
ents are offered financial products to
meet their needs related to money
market and foreign exchange (both in
spot and in forward markets).
Human resources and intellectual capital
are described in section 6 “HR Policy”.
Technological resources are disclo-
sure in section 2 “Management Goals
and Strategy of Their Achievement /
Digital Banking and Other Research
and Development Activities”.
KEY FINANCIALAND NON-FINANCIALRESOURCES ANDTHEIR USE FOR GOAL ACHIEVEMENT
CONCLUSIONOF DERIVATIVESOR TRANSACTIONSIN DERIVATIVESECURITIES
As of December 31, 2018, in view
of the restrictions established by
Credit Agricole Group, the bank
does not conclude derivatives or en-
ter into derivative securities deeds,
and therefore there is no information
on the potential impact of the above
activities on the evaluation of its as-
sets, liabilities, financial position, in-
come and expenses.
The risk management policy of
the bank defines transactions with
derivatives and derivative secu-
rities as significant risk transac-
tions. Due to the lack of tools for
hedging such risks, the bank and
Credit Agricole S.A. have forbidden
the performance of such transac-
tions. Respectively, no other types
of risk (credit, interest rate, price
or liquidity risks) are measured for
such transactions either.
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 6362 Translation from Ukrainian original Translation from Ukrainian original
As part of Credit Agricole Group,
Credit Agricole Bank is committed
to compliance as the heart of its
development. Servicing our clients
in full compliance with legal regu-
lations and in accordance with the
highest ethical standards of cus-
tomer protection and transparen-
cy are the pillars of Credit Agricole
Bank’s strategy.
The Credit Agricole Group Code of
Ethics published in 2017 emphasiz-
es the Group’s values of customer
focus, responsibility and solidarity
for any Credit Agricole Group en-
tity in the world. This reference
document sets out actions and
behavior principles to be followed
vis-a-vis our customers and all our
stakeholders including employees,
suppliers, service providers, state
representatives, associations and
NGOs, shareholders and investors.
COMPLIANCE
Following the principles established
in the Group Code of Ethics, the Su-
pervisory Board of Credit Agricole
Bank approved a new Code of Con-
duct in 2018. It puts into practice the
commitments set out in the Code
of Ethics, which is the foundation of
the ethical and professional conduct
to be respected by every employee
of the Credit Agricole Group. The
Code of Conduct is designed to
provide guidance in everyday ac-
tions, decisions and behavior.
Moreover, new Conflict of Interest
Bylaws were also approved in 2018
by the Supervisory Board of the
bank. They define the rules applica-
ble to the bank’s employees to avoid
situations of conflict of interest.
Such bylaws aim at ensuring proper
governance of the bank as well as
protecting the client’s interests.
Several training sessions were held in
2018 to consolidate the knowledge of
the bank’s staff on compliance mat-
ters. Among other things, the bank’s
staff was trained in financial monitor-
ing, compliance culture, conflict of in-
terests, and fraud prevention.
Credit Agricole Bank, like Credit
Agricole Group itself, is ISO 37001
certified by an independent exter-
nal company for its anti-corruption
system. This highlights the Group’s
and the bank’s determination and
the quality of its anti-corruption
program (identification and analysis
of corruption risks, and measures
to reduce those risks). Credit Ag-
ricole Bank maintains an anti-cor-
ruption policy which defines the
general measures to be applied by
all units of the bank. The anti-cor-
ruption system is regularly updated
to adapt to the environment. For
instance, in 2018, Credit Agricole
Bank took specific actions to in-
crease the global knowledge of its
suppliers and partners (KYB, Know
Your Business). In that respect, new
clauses in agreements with suppli-
ers and partners were added. Credit
Agricole Bank has a zero-tolerance
policy for corruption and expects
the same from all third parties inter-
acting with it.
FOR THE VERY FIRST TIME, CREDIT AGRICOLE GROUP HAS SET UP A GROUP-WIDE ETHICS CHARTER TO COVER ALL THE GROUP ENTITIES. THIS CHARTER SIGNED BY THE GROUP’S TOP MANAGEMENT SETS OUT THE CREDIT AGRICOLE’S CORE VALUES OF ACTING RESPONSIBLY, LOCALLY, AND WITH SOLIDARITY, FORCEFULLY RESTATING THESE VALUES FOR CREDIT AGRICOLE GROUP, WHICH IS OPERATING ITS BUSINESS LINES ACROSS 50 COUNTRIES, OFTEN IN COMPLEX ENVIRONMENTS.
GUNTHER KOLLER / MEMBER OF THE MANAGEMENT BOARD
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 6564 Translation from Ukrainian original Translation from Ukrainian original
RELATIONSWITH SHAREHOLDERSAND RELATED PARTIES
The priorities of the bank’s cor-
porate conduct are transparency,
financial stability and profitability,
and respect for the rights and le-
gitimate interests of shareholders
and other stakeholders of the
bank. As of December 31, 2018,
the sole shareholder of the bank is
CREDIT AGRICOLE S.A., located at
12, Place des Etats Unis, Montrouge
Cedex, France 92127 and owning
100 % of the bank’s shares (herein-
after the shareholder).
The relations with the sharehold-
er are built in compliance with the
Corporate Governance Principles
(Code) of the bank. The revised ver-
sion of the Principles was adopted
by Resolution of the Sole Sharehold-
er of the bank No. 5 dated Decem-
ber 4, 2018. The bank provides the
shareholder with a real possibility to
exercise its rights stipulated by the
Charter and the Ukrainian law, as well
as with effective remedy in the case
of rights violation. The shareholder
is entitled to manage the shares at
its own discretion, and take any ac-
tions in respect of them unless they
are in breach of the law or infringe
on the rights and interests of others.
In its turn, the bank guarantees the
shareholder’s right to prompt receipt
of full and reliable information on the
financial and economic position of
the bank. The relations between the
bank and the shareholder are based
on the principles of cooperation,
transparency, effective management
and control, social responsibility and
compliance with the laws, which
allows the shareholder to make in-
formed decisions.
To ensure stable operations of
JSC “CREDIT AGRICOLE BANK”
and to avoid risks of non-compli-
ance with the NBU requirements to
credit risk concentration standards,
an effective credit risk concentration
control system was implemented in
the bank, including with respect to
related parties transactions (in ac-
cordance with the Resolution of the
Board of Directors of NBU No. 315).
In view of the above,
Internal bylaws on defining
the related parties of the
bank, keeping and using
their list and performing as-
set transactions with them
were drafted and adopted.
Separate modules for the
registration and processing
of the obtained information
on related parties of the
bank were developed in the
bank’s software for correct
grouping of related parties.
An automated control sys-
tem providing for related
parties identification and
control over their transac-
tions was implemented.
Data analysis and control of
compliance with the max-
imum level of credit risk
arising from transactions
with related parties of the
bank (N9) are carried out
on a daily basis.
The bank complies with the Law
of Ukraine “On Banks and Banking
Activity” and the regulations of the
National Bank of Ukraine concern-
ing control over transactions with
related parties. In 2018, there were
no violations of the N9 ratio.
The list of related parties includes
about 4.2 thousand entities, includ-
ing 3.5 thousand (83 %) companies
of Credit Agricole Group and their
managers who are non-residents,
not customers of the bank and do
not reside in Ukraine. Only about
700 persons (17 %) are related par-
ties of the bank located in Ukraine;
about 100 of them are the bank’s
employees, and 550 its associates.
Asset transactions are run with 2 %
of the total number of related parties.
The bank was not involved in high-
risk asset transactions with related
parties, namely in the amount ex-
ceeding 1 % of the regulatory cap-
ital of the bank (for individuals) or
3 % of the regulatory capital of the
bank (for legal entities).
As of December 31, 2018, the maxi-
mum credit risk arising from transac-
tions with related parties represents
0.74 % of the regulatory capital of
the bank, while the total amount of
liabilities under the related parties’
transactions is 35.2 mn UAH.
Interest rates on loans granted to
related parties and funds attracted
from related parties match the stan-
dard interest rates for respective
loan/deposit product for the respec-
tive client segment (individuals or
legal entities).
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 6766 Translation from Ukrainian original Translation from Ukrainian original
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 6968 Translation from Ukrainian original Translation from Ukrainian original
RESULTS OF ACTIVITYAND PROSPECTSFOR FURTHERDEVELOPMENT
RESULTS OF ACTIVITY
Credit Agricole Bank finished 2018
with a record net result of 1,463 mn
UAH due to strong commercial mo-
mentum and the increasing contri-
bution of all business lines into net
banking income.
Performing loan portfolio (net of pro-
visions) showed a steady growth of
+12 %, or +2.3 bn UAH in compari-
son with the previous year. The qual-
ity of the loan portfolio is maintained
at a high level, while loan provision
increased by 11 %, or 0.2 bn UAH in
comparison with 2017.
The bank’s NPL ratio is one of the
lowest among banks in Ukraine. At
the end of December 2018, the NPL
coverage ratio grew by +1 % and
reached 97.0 % in comparison with
the end of December 2017.
As of the end of December 2018,
the bank’s RWA increased by 28 %
up to 24.5 bn UAH in comparison
with December 2017 (RWA were
19.2 bn UAH). The bank continues
to demonstrate a strong capital po-
sition with a capital adequacy ratio
(N2) of 19.4 % as of the end of De-
cember 2018 (minimum regulatory
level is 10 %).
Credit Agricole Bank’s depos-
its portfolio amounted to 27.1 bn
UAH at the end of December 2018,
having increased by +4 %, or by
+1.0 bn UAH in comparison with the
end of 2017. The deposits increased
on all business lines, but mainly on
the corporate side. Customer de-
posits provide a comfortable level of
liquidity to the bank, both in hryvnia
and in foreign currency. Credit Ag-
ricole Bank’s liquidity excess in FC
represents the equivalent of 41 % of
its customer deposits at the end of
2018. The available liquidity buffer
in hryvnia is placed in liquid instru-
ments of the NBU and the Ministry of
Finance of Ukraine (CDs and T bills).
Net Banking Income
The increasing trend of net bank-
ing income persists. In 2018, NBI
amounted to 3,426 mn UAH, which is
+23 % or +635 mn UAH more than in
2017. The bank demonstrated growth
in all components of net banking in-
come, which confirms the efficiency
of its business model and consisten-
cy of strategy implementation.
Net Interest Income
Net interest income came to
2,330 mn UAH, essentially in-
creased by +20 % or 383 mn UAH.
This performance was mainly due to
higher loans and higher short-term
UAH interest rates.
Net Fee
and Commission Income
Net fee and commission income,
which accounted for 21 % of net
banking income (23 % in 2017),
came to 703.4 mn UAH, significantly
increasing vs. the previous year (up
by 9 %) on loan-related fees (linked
with higher activity and higher vola-
tility on the FX market).
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 7170 Translation from Ukrainian original Translation from Ukrainian original
Net Income
from Other Banking Activities
Other NBI increased by +99 %, or
196 mn UAH on higher trading vol-
umes as well.
Operating Expenses
Operating expenses came to
1,382 mn UAH, increasing by
223 mn UAH, or +19 % vs. 2017:
Personnel expenses increased by
129 mn UAH, or +19 % vs. 2017
(806 mn UAH vs. 677 mn UAH) as a
result of pressure on the labor market.
Other administrative expenses in-
creased by 59 mn UAH, or 16 % vs.
2017 due to an increase in the cost of
advertising & other external services.
Depreciation and amortization:
growth by 35 mn UAH, or 33 %
was mainly due to an increase in
depreciation, evidencing visible in-
vestments into the bank’s transfor-
mation (including processes and
digital development). The amount
of investments in 2018 increased by
40 % up to 256 mn UAH vs. 2017.
The cost-to-income ratio of Credit
Agricole Bank remains one of the
lowest among Ukrainian universal
banks; it did not deteriorate in the
context of pressure on general ex-
penses and investments.
Net Provisions
for Risks and Charges
The cost of risk is maintained at
a low level following the improve-
ment of economic environment and
successful management of bad
debts, and it is by 13 % better than
in 2017: –236 mn UAH in 2018 vs.
–270 mn UAH in 2017. Positive chang-
es are due to active work on non-per-
forming loans, prudent risk policy and
efficient collection of debts.
Net Result
The Net Result for the financial year
came to 1,463 mn UAH, increasing
by 32 % vs. 2017, with a 55 % return
on equity. Such a result confirms the
adequacy of the chosen business
strategy and sustainability of its im-
plementation.
PROSPECTS FOR FURTHER DEVELOPMENT
growth. The bank also keeps a cau-
tious view on the influence of po-
tential volatility in global commodity
markets regarding the performance
of domestic economic sectors.
This year could be the hardest for
the government in terms of exter-
nal debt repayments in the medium
term. First, the election year and the
corresponding reluctance to deal
with social issues may postpone
the provision of new IMF tranches
(scheduled at 2.6 bn USD). Second,
considering the moderate chances
of refinancing redemption of local
bonds in foreign currency (FC), the
government would still have no oth-
er way than to enter external capital
markets with new Eurobond issues
of around 3.0 bn USD. Therefore,
the potential turmoil in global finan-
cial markets as well as elevated do-
mestic risks due to elections may
raise the cost of issuing new debt
on global financial markets.
The bank foresees the preservation
of growth in the majority of econo-
mic sectors this year. In particular, it
expects a higher upturn in the indus-
trial sector for the restoration of pro-
duction in its core segments, while
strong demand and investments
would preserve a positive dynamic
in both trade and construction. At
the same time, the grain harvest
may be slightly lower this year, thus
undermining agriculture’s slight con-
tribution to the general economic
MAJOR EXTERNAL PUBLIC DEBT PAYMENTS IN 2015 – 2021, USD BN
Sources: Credit Agricole
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 7372 Translation from Ukrainian original Translation from Ukrainian original
ANALYSIS OF KEYPERFORMANCEINDICATORS
ANALYSISOF KEYPERFORMANCEINDICATORS
The management of Credit Agricole Bank regularly assesses the bank’s performance in accordance with
the established objectives. Particular attention is paid to the following indicators:
Key Performance Indicators 2017 2018 2018 vs. 2017
Net banking income, mn UAH 2,787 3,426 639 23%
Cost to Income Ratio (CIR) 42% 40% -1% -
Cost of risk, mn UAH -270 -236 34 -13%
Risk Weighted Assets, mn UAH EoY 19,496 24,952 5,455 28%
OPEX, mn UAH -1,159 -1,382 -223 19%
Return On Net Equity (RONE) 47% 55% 8% -
Synergies Result, mn UAH 592 655 63 11%
Net result, mn UAH 1,110 1,463 353 32%
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 7574 Translation from Ukrainian original Translation from Ukrainian original
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 7776 Translation from Ukrainian original Translation from Ukrainian original
HR POLICY
IN 2018, THE HR MANAGEMENT POLICY OF CREDIT AGRI-COLE BANK WAS DEVELOPED IN LINE WITH THE BANK’S STRATEGY. AS OF DECEMBER 31, 2018, THE NUMBER OF ACTIVE EMPLOYEES WAS 2,315, 71 % OF THEM WOMEN AND 29 % MEN. THE AVERAGE AGE OF THE BANK’S EM-PLOYEES IS 39 YEARS OLD, AND THE AVERAGE DURATION OF EMPLOYMENT AT CREDIT AGRICOLE BANK IS 5 YEARS 9 MONTHS.
HUMAN RIGHTS
In terms of human rights, Credit Ag-
ricole Bank is governed by the Uni-
versal Declaration of Human Rights
adopted by the United Nations
General Assembly, the Internatio-
nal Covenant on Civil and Political
Rights, the International Convention
on Elimination of All Forms of Racial
Discrimination, the Constitution of
Ukraine and other international and
Ukrainian legislative and internal
regulatory documents.
As people have to provide their
personal data in electronic form
more and more often, the bank
complies with the law on personal
data protection based on five prin-
ciples – integrity and reliability, eth-
ics, transparency and education,
safety, and client control of data us-
age – and guarantees the security of
personal data of its employees and
respects their privacy.
The bank improves the awareness
of discrimination prevention among
its executives, managers and em-
ployees. To work towards gender
equality and diversity means to
make the employees feel they are
treated fairly from the very first day
and throughout their whole career at
the bank. Working conditions where
each and every one feels respect-
ed improve performance and make
people more motivated.
Apart from its legal obligations, the
bank believes that diversity improves
efficiency and attractiveness. Facili-
tating gender diversity means devel-
oping a transparent and responsible
corporate culture that contributes to
internal unity and progress.
The bank ensures prevention, de-
tection and resolution of illegal acts.
No employee, trainee or apprentice
can be punished, fired or discrimi-
nated against for suffering from or
refusal to tolerate sexual or moral
harassment, as well as for claiming
or disclosing such actions.
Corporate foreign language cours-
es. The bank helps its staff reach
the required level of language skills
by organizing regular lessons with
professional teachers and maintain
and improve the skills through par-
ticipation in weekly speaking clubs.
About 190 employees attend such
corporate courses.
In 2018, training and development
expenses constituted 1.21 % of the
overall staff expenses. On average,
an employee takes 7 or 8 training
courses for professional knowledge
improvement per year.
Credit Agricole Bank systemically
invests into staff training and de-
velopment and actively uses its
internal succession pool to fill man-
agerial positions. For this purpose,
the bank runs the TOP Talents de-
velopment program aimed at pre-
paring potential senior managers
able to occupy managerial positions
at the bank as well as to take part in
the international mobility programs
within Credit Agricole Group.
COMPENSATION POLICY
The general principles of remu-
neration management are set out
in the Compensation Policy of
Credit Agricole Bank. The Policy is
approved by Credit Agricole Group
and meets the European standards.
The level of salary of employees is
established according to the posi-
tion, qualification and complexity
of the job. The bank refers to labor
market indicators to define the level
of remuneration for the staff. In par-
ticular, an overview of salaries in the
Ukrainian banking sector was made
together with EY and KornFerry in
2018. For Credit Agricole Bank, the
target level of salary shall not be
lower than the market midpoint.
Salaries are revised on an annual ba-
sis. The annual revision approach is
based on the level of inflation, bud-
get indicators and market forecasts.
In 2018, the revision was made in
April, and the increase was 11 %.
To raise the staff’s motivation, bo-
nuses are paid on an annual, quar-
terly or monthly basis depending on
the position and organizational unit.
The conditions of bonus payment
are set out in the respective internal
regulations that are updated on a
regular basis to expand the range of
staff incentives.
PROFESSIONAL DEVELOPMENT
Credit Agricole Bank provides op-
portunities for professional and
personal development for its em-
ployees by ensuring access to a
comprehensive educational envi-
ronment that consists of:
Internal training programs. Inter-
nal training includes more than
15 programs for the development of
key competencies and profession-
al skills of the staff. In 2018, about
130 internal training sessions were or-
ganized for almost 2,530 participants.
E-learning courses. Employees
can learn the standards, internal
rules and procedures of the bank
through distant electronic cours-
es. Useful skills and professional
expertise training and courses are
also available for the staff in the
e-learning format. The total number
of electronic courses participants is
20,000 per year.
Internal workshops and conferences.
Such events involve the experts of
Credit Agricole Bank and Credit Ag-
ricole Group and provide new knowl-
edge and practical experience in an
easy and interactive format.
External educational programs and
events. The bank encourages its em-
ployees to develop their field-specific
skills and knowledge, and thus gives
them the opportunity to attend exter-
nal training events at the expense of
the bank. As a result, 260 employees
took part in 150 external events.
SOCIAL SECURITY
Credit Agricole Bank cares about
the health of its employees and their
families: in 2018, over 2,800 em-
ployees of the bank and their family
members were covered by health
insurance programs free of charge
all over Ukraine.
The bank covers 100 % of the health
insurance policy cost for employees
and for children of employees who
have the confirmed status of single
parents, for employees’ children un-
der custody and for children from
multi-child families.
There is also a life and critical dis-
ease insurance program that covers
the risks of critical diseases, disabil-
ity and fatality for whatever reason
for all employees and their children.
The program is developed in ac-
cordance with the norms of Credit
Agricole Group and in compliance
with the European standards, and
is effective since an employee’s first
working day at the bank.
The share of expenses for social
programs for the staff amounted to
3.6 % in the total staff costs in 2018,
which according to non-public re-
search is one of the highest indica-
tors in the Ukrainian banking sector.
Social security for the staff is guar-
anteed by the Collective Agreement
in Credit Agricole Bank. Its perfor-
mance is monitored at the level of
staff representatives and Adminis-
tration of the bank.
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 7978 Translation from Ukrainian original Translation from Ukrainian original
CARING ABOUT STAFF
Credit Agricole Bank values its em-
ployees and makes all efforts to
make each of them feel that they are
cared for, supported by the team
and contribute to the future. This is
confirmed by a number of personnel
oriented programs implemented by
the bank in 2018.
Maintaining the image of a socially
responsible employer, the bank co-
operates with universities in various
areas.
3 projects involving students and
graduates were implemented in 2018:
CASERS. Digital case solution com-
petition for university students with
more than 200 participants from
all over Ukraine, 25 selected case
solutions. 11 shortlisted teams (17
participants) presented their solu-
tions, and 3 winning teams (4 par-
ticipants) were determined. Two
students-winners were employed.
Code of Cooperation Rules is a
set of internal cooperation rules for
compliance with six key corporate
values on a daily, weekly and month-
ly basis. The Code was supplement-
ed with the rules of email exchange,
conducting meetings and business
courtesy. The purpose of the rules
is to make cooperation within the
company more effective, simpler
and nicer. They were formulated by
working groups from different units
of the bank with the support and as-
sistance of the management.
In 2018, a set of cooperation rules
was developed for each corporate
value (printed booklet Code of Co-
operation).
Together With a Colleague. This
project allows the employees to get
an insight into the work of their col-
leagues from other organizational
units, obtain new knowledge and
meet interesting people. It also en-
courages them to adopt effective
business practices and to make
their personal contribution to resolv-
ing work issues and improving com-
mon processes. Result: 69 visits,
33 organizational units. The pro-
gram will be continued in 2019.
Together With Branch. The project
allows employees to plunge into the
life of a bank branch, work shoulder
to shoulder with managers, learn
special aspects of banking prod-
ucts sale, and to personally take
part in the process of customer ser-
vice. Head Office employees spend
several days in a branch working
together with their colleagues from
the network. This is the way to see
the real work with customers, feel
all the processes and better under-
stand the needs of clients and col-
leagues.
Results: 100 % participation of
HO employees (according to the
project concept), 22 HO repre-
sentatives, more than 100 recom-
mendations, 30 of which will be
implemented in 2019.
Make It Smart. Competition of inno-
vative ideas for bank employees. The
core idea is to engage as many em-
ployees as possible in the process
of changes and innovations through
encouraging idea generation for the
improvement of the bank’s work.
New ideas will help the bank be-
come more modern and dynamic.
Result: 190 ideas, 67 employees,
2 winning ideas. 59 ideas were
shortlisted for introducing innova-
tions into business processes and
improvement of the atmosphere and
working conditions in the bank.
Shared Missions and Values. The
project is aimed at raising aware-
ness of and developing missions
by each organizational unit. The
project will help the employees
know and understand the missions
of their units, refer to them in their
daily work, understand the position
of the unit in the company, and the
unique contribution of each unit to
the general strategy of the bank. In
the course of workshops, 38 mis-
sion statements were made by the
organizational units of the bank, and
an information campaign was devel-
oped and scheduled.
Collaboration Survey. A survey
aimed to evaluate the level of inter-
action between the units of the bank
in terms of compliance with corpo-
rate values: customer orientation,
professional competence, sustain-
able responsibility. The methodolo-
gy and the toolkit were developed in
2018, and the survey will be carried
out in early 2019.
Let’s Start Here two-month trainee
program for 3–5 year students of
economic and financial departments
of Kyiv universities. The program
lets them obtain basic knowledge of
banking products and services, sale
and customer service skills, and get
soft skills of effective communica-
tion and negotiations.
Results of 2018: pilot program
launched, 4 students employed.
Standing undergraduate program
for 4–5 year students. Over 2018,
the bank hosted 72 students from
23 universities.
As part of staff search and selection,
the bank takes an active part in job
fairs and uses social networks, such
as its corporate page on Facebook.
KEY PROJECTS
CODE OF COOPERATION
(2016–2018)
2016 saw the beginning of a new
stage of the bank’s HR strategy
reflected in the motto “Everything
starts here!” The strategy was sup-
ported by the development of new
corporate values: customer orienta-
tion, team spirit, professional com-
petence, dynamism, and ethical and
long-term responsibility. To animate
these values and make them a part
of daily lives of our employees, the
HR team together with the Man-
agement Board Members and rep-
resentatives of all head Office and
Network business lines developed
the Code of Cooperation.
Code of Cooperation is a compre-
hensive program for the support of
corporate values implementation in
daily work through certain rules and
projects.
Idea and concept: setting certain
benchmarks (rules) of behavior and
encouraging and involving employ-
ees to implement values in daily ac-
tivities. The objective is to support
corporate values implementation in
daily work by establishing certain
rules and implementing projects.
Two concurrent vectors were im-
plemented as part of program
realization: development and com-
munication of cooperation rules,
and implementation of five unique
projects to support specific corpo-
rate values.
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 8180 Translation from Ukrainian original Translation from Ukrainian original
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 8382 Translation from Ukrainian original Translation from Ukrainian original
CORPORATESOCIALRESPONSIBILITY
GREEN INITIATIVES
Credit Agricole Bank donated
12,000 pine seedlings to the Holo-
siivskyi National Park. The initiative
was dedicated to the global Earth
Hour campaign. More than 15 bank
employees accompanied by their
families planted several hundred of
pine seedlings, and the rest of the
seedlings were planted by the em-
ployees of the Holosiivskyi NNP in
the problem areas of the park. The
April tree planting was the first wave
of the bank’s traditional Trees for
Car Loans initiative.
The second initiative under the Trees
for Car Loans project was held in
the Pozniaky park in Kyiv. A team
of Credit Agricole Bank employees
planted 50 hawthorns, mountain
ashes, pea shrubs, larches and ap-
ple trees. Aware of its responsibility
for the growing number of cars on
the Ukrainian roads, Credit Agricole
seeks to contribute to the protec-
tion of the environment. The bank
continuously expands the scope of
the green initiatives and increases
the number of planted areas in the
Before the New Year, the team
of Credit Agricole Bank raised
70 k UAH for M. Amosov National
Institute of Cardiovascular Surgery.
The money was used to purchase
Custodiol medicament used for
heart surgery. This medicine makes
it possible to preserve a heart for
2 hours during hypothermic storage.
The project was delivered with the
support of the Tvoya Opora chari-
ty fund, a consistent partner of the
bank’s charitable initiatives.
11 Donor’s Days. During 2018, the
bank has held 11 traditional month-
ly Donor’s Days. Over this period,
more than 70 employees visited the
Pediatric Cardiology and Cardiac
Surgery Center and donated blood
for its little patients who regularly re-
quire blood components.
Insurance for Charity. A charity ini-
tiative that was held at the bank in
July and August. Thanks to the pur-
chased insurance policies, the bank
transferred 300 k UAH to buy medi-
cal equipment, namely 5 blood pres-
sure sensors and 85 consumable
items, for the Pediatric Cardiology
and Cardiac Surgery Center (Kyiv)
last September. This equipment is
necessary for the effective treatment
of young patients of the Center.
Credit Agricole supports Ukrainian
healthcare and contributes to its de-
velopment and improvement. The
project is implemented with the as-
sistance of Tvoya Opora.
Another incredibly important project
implemented in 2018 was the recon-
struction of the children’s swimming
pool of the Sportium sports center
in Mykolaiv Region at the expense of
the bank. The opening of the swim-
ming pool was devoted to the Chil-
dren’s Day and the beginning of the
summer season. From June 2 to 4,
CHARITY
Credit Agricole Bank donated three
complete monitor sets for the Cen-
ter for Pediatric Cardiology and Car-
diac Surgery, which needed them
to provide quality treatment of chil-
dren’s hearts. These high-quality
devices allow monitoring the heart
rate, blood oxygen levels, blood
pressure, mechanics, respiratory
rate, body temperature, and many
other important indicators.
Employees of Credit Agricole Bank
also purchased medical equipment
for the M. Amosov National Institute
of Cardiovascular Surgery. During
the corporate cycle race on June 16,
the bank staff raised 35 k UAH,
which was used for the purchase
of a fetal monitor necessary for pre-
natal care as it enables monitoring
the cardiac contractions of the fetus
and mother, blood pressure, and
blood saturation. It was transferred
to the institute on July 3.
CREDIT AGRICOLE BANK CONTINUES DOING GOOD DEEDS AS PART OF THE CORPORATE SOCIAL RESPONSIBILITY PRO-GRAM WE CARE! BY IDENTIFYING NEW AREAS OF CHARITY AND EXPANDING THE SCOPE OF EXISTING PROJECTS. IN 2018, THE BANK DOUBLED THE BUDGET FOR SOCIAL PRO- JECTS AND INCREASED THE EMPLOYEES’ INVOLVEMENT IN THE INITIATIVES, THUS RAISING 100 K UAH FOR CHARITY.
capital. The event was arranged and
held through the active assistance
of Kyivzelenbud Utility Company
and personnel of Municipal Green
Planting Enterprise of the Darnytskyi
District of Kyiv.
The bank joined the Clean My City
Challenge, a clean-up initiative tar-
geting streets and parks of our city.
25 bank employees together with
their families took part in the initia-
tive and cleaned the Dorohozhychi
Park in Kyiv.
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 8584 Translation from Ukrainian original Translation from Ukrainian original
CARING ABOUT EMPLOYEES
On April 22, the team of Credit Agri-
cole Bank covered the individual, re-
lay and charity distances of the 8th
Nova Poshta Kyiv Half Marathon.
This time, the bank was represent-
ed by about 130 employees, which
is twice as much as last year. The
scale of our intentions was appreci-
ated by the organizers of the mar-
athon, and the bank got an award
in the Largest Corporate Team cate-
gory at the grand closing event.
The sixth traditional corporate cycle
race of Credit Agricole Bank start-
ed in 2018 in seven cities: Kyiv, Lviv,
Dnipro, Kharkiv, Poltava, Vinnytsia,
and Odessa. The main objective
is to promote environmentally sus-
tainable transport. Driving down the
main streets of the largest Ukrainian
cities, the employees of the bank in-
spire people to follow their example.
Sporting and team spirit joined to-
gether in the traditional summer
football tournament. It is a good tra-
dition and a large-scale event aimed
at enhancing corporate culture,
mutual support between the em-
ployees, and promotion of a healthy
lifestyle. This year’s tournament was
held in two phases and hosted in
two cities, gathering 700 employees
of the bank from all over Ukraine.
an All-Ukrainian open swimming
competition took place at Spor-
tium, and the renovated swimming
pool was tested by little sportsmen
for the first time. Galyna Nechaie-
va, HR Director, represented
Credit Agricole Bank at the event and
gave the well-deserved rewards to
the winners of various age categories.
On July 11, a renovated football
ground was opened at 142 Trakto-
robudivnykiv St. in Kharkiv. The field
was restored jointly by Credit Agricole
Bank and Mastercard under the Pass
the ball all-Ukrainian social initiative.
The field has an area of 924 m2 and
is open to everyone. During the re-
construction work, the foundation of
the field was replaced, artificial grass
was put on the field, and new fences
were installed as well as the sports
equipment that meets the interna-
tional requirements to minifootball.
On October 7, a team of
Credit Agricole Bank employees
joined a large-scale running event,
the 9th Wizz Air Kyiv City Marathon.
The anniversary Fundraising mar-
athon was held to raise funds to
support the projects of 15 charita-
ble foundations on the platform of
Ukrainian philanthropic marketplace
and the Tabletochki fund. The mar-
athon was attended by 90 of our
employees, among which 18 are
fundraisers.
Credit Agricole supported the Char-
ity Weekend. Healthy Day charity
festival as a partner, and donated
50 k UAH. The purpose of the event
was to raise funds for the purchase
of an innovative X-ray machine re-
quired by the Institute of Pediat-
rics, Obstetrics and Gynecology
of Ukraine. The equipment costs
approximately 4 mn UAH. Thanks
to the X-ray machine, thousands of
newborns can be diagnosed faster
and more accurately. This equip-
ment is a chance to save little lives.
The bank is taking care of children’s
homes for the 2nd year in a row. In
2017, it launched a large-scale ini-
tiative called Supporting Children’s
Homes and took six orphanages
from different regions of Ukraine
under its wing. In 2018, the bank
expanded the scope of the initia-
tive and included Luhansk Oblast
Children’s Home No. 2. There are
seven institutions under the bank’s
wing today.
11«DONOR’S DAYS»
DURING THE YEAR
5GREEN
INITIATIVES
8PROJECTS
FOR EMPLOYEES
12CHARITY PROJECTS
TWOFOLD INCREASEOF CHARITABLE
INITIATIVE BUDGET
OVER UAH
100,000EMPLOYEES DONATIONS
FOR CHARITY
12,000PINE SEEDLINGS AND
50TREES
WERE PLANTEDWITHIN THE «TREE FORCAR LOAN» CAMPAIGN
7ORPHANAGES
UNDER THE WINGOF CREDIT
AGRICOLE BANK
OVER
75EMPLOYEES DONATED
BLOOD WITHINTHE «DONOR’S DAY»
PROJECT
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 8786 Translation from Ukrainian original Translation from Ukrainian original
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 8988 Translation from Ukrainian original Translation from Ukrainian original
1) REFERENCE TO THE CORPORATE GOVERNANCE CODE
STATEMENTOF CORPORATEGOVERNANCE
The bank has implemented the sys-
tem of corporate governance and
approved the internal document
governing this area of the bank’s ac-
tivity, namely Corporate Governance
Principles (Code) of JSC Credit
Agricole Bank adopted by Resolu-
tion of the Shareholder No. 5 dated
December 4, 2018. The document is
available online at https://credit-agri-
cole.ua/o-banke/dokumenti-ta-zviti.
The Corporate Governance practice
is carried out in strict compliance
with the regulatory requirements.
2) DEVIATIONS FROM/NON-APPLICATION OF THE PROVISIONS
OF THE CORPORATE GOVERNANCE CODE
In its activity, the bank does not de-
viate from and fully complies with all
provisions of the internal Corporate
3) INFORMATION ON GENERAL SHAREHOLDERS’ (PARTICIPANTS’) MEETING
Type of General Meeting ordinary extraordinary
Х
Date of the meeting 30.04.2018
Quorum of the meeting 99.9961 %
Description 1. Consideration and approval of statements and annual performance of the bank for 2017. 2. Decisions on the approval and distribution of profit and loss of the bank for 2017. 3. Decisions on the amendments to the number of Supervisory Board members of the bank. 4. Decisions on the approval of regulatory documents of the bank, etc.
Type of General Meeting ordinary extraordinary
Х
Date of the meeting 07.06.2018
Quorum of the meeting 100.00 %
Description 1. Decisions on the allocation of a part of the retained earnings of the bank for 2017. 2. Decisions on the approval of regulatory documents of the bank.
Type of General Meeting ordinary extraordinary
Х
Date of the meeting 18.10.2018
Quorum of the meeting 100.00 %
Description 1. Decisions on endorsement of resolutions of the Supervisory Board and confirmation of powers of Supervisory Board members.
Type of General Meeting ordinary extraordinary
Х
Date of the meeting 03.12.2018
Quorum of the meeting 100.00 %
Description 1. Decisions on the amendments to the number of Supervisory Board members of the bank. 2. Decisions on the approval of the terms of civil contracts entered into with the Supervisory Board members of the bank.
Type of General Meeting ordinary extraordinary
Х
Date of the meeting 04.12.2018
Quorum of the meeting 100.00 %
Description 1. Decisions on the change of the type of the Joint-Stock Company. 2. Decisions on the change of the name of the Joint-Stock Company. 3. Decisions on the amendments of regulatory documents of the bank. 4. Decisions on the approval of regulatory documents of the bank, etc.
Governance Principles (Code) of
JSC Credit Agricole Bank.
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 9190 Translation from Ukrainian original Translation from Ukrainian original
Yes No
Reorganization Х
Additional share issue Х
Amendments to the Charter Х
Decision on increase the share capital of the company Х
Decision on decrease the share capital of the company Х
Election or termination of powers of the Chairman and members of the Supervisory Board Х
Election or termination of powers of the executive body members Х
Election or termination of powers of Revision Commission members (Inspector) Х
Delegation of additional powers to the Supervisory Board Х
Other (specify) –
Information on the General Shareholders’ Meeting held in the form of absentee vote in the reporting year – no.
Information on calling the extraordinary General Meeting and its initiators:
Yes No
Supervisory Board Х
Executive body Х
Revision commission (Inspector) Х
Shareholder(s) that at the day of demand submission hold(s) in total 10 and more per cent of ordinary shares of the company Х
Other (specify) –
Information on calling but not holding ordinary General Meeting – not applicable.
Information on calling but not holding extraordinary General Meeting – not applicable.
Yes No
National Commission for Securities and Stock Market Х
Shareholders owning in total more than 10 per cent Х
The issues submitted for consideration by the General Meeting or the Share-
holder were approved unanimously. The issues of the agenda were consid-
ered by the General Meeting upon the presentation of the Chairman of the
Supervisory Board and/or Corporate Secretary.
Information on the authority that registered shareholders for participation in
the latest General Shareholders’ Meeting
Information on the main reasons for calling the latest extraordinary meeting
Yes No
Registration Commission appointed by the person who called the General Meeting Х
Shareholders Х
Depositary institution Х
Other (specify) Most recently, issues in the scope of the General Meeting were considered in the form of sole shareholder’s decision (according to art. 49 of the Law of Ukraine «On Joint-Stock Companies», decisions of the shareholder have the status of the General Meeting minutes).
Information on the authority that exercised control (if any) over the status
of shareholders’ or their representatives’ registration for participation in the
latest General Meeting
Information on the way of voting on the issues of the agenda at the latest
General Meeting
Yes No
By raising cards Х
By ballots (ballot voting) Х
By raising hands Х
Other (specify) Most recently, issues in the scope of the General Meeting were considered in the form of sole shareholder’s decision (according to art. 49 of the Law of Ukraine «On Joint-Stock Companies», decisions of the shareholder have the status of the General Meeting minutes).
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 9392 Translation from Ukrainian original Translation from Ukrainian original
Composition of the Supervisory Board as of December 31, 2018
Full name Position Independent Member
Yes No
Ribes Stanislas Gerard Marie Georges Chairman of the Supervisory Board Х
Marchand Gerard Marcel Lucien Member of the Supervisory Board Х
Hepp Karl Marcus Sitticus Louis Member of the Supervisory Board Х
Feofilov Sergii Leonidovych Member of the Supervisory Board Х
Pavelko Volodymyr Anatoliiovych Member of the Supervisory Board Х
Schonherr Frank Member of the Supervisory Board Х
Brillaud (en.Maire) Veronique Francoise Member of the Supervisory Board Х
Bennet Laurent Pierre Henri Member of the Supervisory Board Х
Composition of the Supervisory Board before December 3, 2018
Full name Position Independent Member
Yes No
Pinchon Francois Alfred Marie Chairman of the Supervisory Board Х
Guidez Philippe Etienne Henry Member of the Supervisory Board Х
Marchand Gerard Marcel Lucien Member of the Supervisory Board Х
Leonnard Philippe Alain Member of the Supervisory Board Х
Bennet Laurent Pierre Henri Member of the Supervisory Board Х
4) INFORMATION ON THE SUPERVISORY BOARD
AND EXECUTIVE BODY OF THE ISSUER
Composition of the Supervisory Board on December 31, 2018
Number of persons
Supervisory Board members – shareholders 0
Supervisory Board members – shareholders’ representatives 5
Supervisory Board members – independent directors 3
Committees of the Supervisory Board (if available)
Yes No
For audit Х
For nomination Х
For remuneration Х
Other (specify) –
Board was evaluated based on the
outcome of responses of the Super-
visory Board members.
Each independent member of the
Supervisory Board meets the re-
quirements for independent mem-
bers of the Supervisory Board set by
the effective legislation of Ukraine.
Information on assessment of
work of the committees (the in-
formation on their competence
and performance should be
specified, as well as the informa-
tion on the number of meetings
of particular committees of the
Supervisory Board): the Remu-
neration Committee operates as a
standing committee of the Supervi-
sory Board of the bank. It ensures
that compensation practices and
motivation programs are in line with
the strategy of the bank and create
value for the bank, allowing it to en-
gage and attract the best qualified
professionals and to ensure the pro-
motion of smart and effective risk
management. In 2018, there were
9 meetings of the Remuneration
Committee. As of December 31,
2018, the Remuneration Commit-
tee of the bank consisted of three
members – Ribes Stanislas Gerard
Marie Georges, Bennet Laurent
Pierre Henri, Schonherr Frank –
and the secretary Nechaieva Ga-
lyna Mykhailivna. Until October 3,
2018, the Remuneration Commit-
tee included Pinchon Francois Al-
fred Marie, Bennet Laurent Pierre
Henri, Leonnard Philippe Alain, and
the secretary Nechaieva Galyna
Mykhailivna. Over the reporting pe-
riod, decisions were taken on issues
of bonus payment to the members
of the executive body and Internal
Audit employees.
The Supervisory Board of the bank
carries out its activities in accor-
dance with the effective legislation of
Ukraine, Charter of the bank and the
Bylaws on the Supervisory Board.
The decisions of the Supervisory
Board shall be taken by a majority
of votes of the Supervisory Board
members present at the meetings
and having the right to vote. One
member of the Supervisory Board
shall have one vote. If the votes are
equally divided, the Chairman of the
Supervisory Board shall give the
casting vote. The decisions of the
Supervisory Board may be taken by
polling (absentee voting), according
to the procedure stipulated by the
Bylaws on the Supervisory Board.
In 2018, the members of the Super-
visory Board exercised their duties
by devoting enough time and at-
tention to their work notwithstand-
ing their participation in other legal
entities and other activities. The
performance of the Supervisory
Major goals achieved by the Super-
visory Board of the bank in 2018
were control over the financial and
economic performance of the bank
and the bank’s compliance with the
legal requirements and its internal
documents of the bank in process
of conducting financial and eco-
nomic activity. At year-end 2018, net
profit of the bank amounted to UAH
1,462,649 thousand versus UAH
1,109,501 thousand of net profit re-
ceived in 2017, which proves the ef-
ficiency of the strategy and reliable
performance of the bank’s govern-
ing and control bodies in a complex
environment.
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 9594 Translation from Ukrainian original Translation from Ukrainian original
Information on determination of the Supervisory Board members’ remuneration
Yes No
Remuneration is a fixed amount Х
Remuneration is the percentage of the net profit or increase in the market value of shares Х
Remuneration is paid in the form of the company’s securities Х
Supervisory Board members get no remuneration Х
Other (specify) Only Independent Supervisory Board members get remuneration
Information on the requirements to the Supervisory Board members and the
internal documents where such requirements are specified
Yes No
Industry knowledge and job experience in the industry Х
Knowledge of finance and management Х
Personal qualities (integrity, responsibility) Х
No conflict of interests Х
Min/max age Х
No requirements Х
Other (specify) –
Information on the way of familiarization of newly elected Supervisory Board
members with their rights and responsibilities
Yes No
New Supervisory Board member studied internal documents of the Joint-Stock Company on his/her own Х
There was a meeting of the Supervisory Board where the new member was informed on his/her rights and responsibilities Х
A special training was organized for the new Supervisory Board member (on corporate governance or financial management) Х
All Supervisory Board members were reelected or no new members were elected Х
Other (specify) –
General description of the decisions made by the Supervisory Board
Over 2018, the Supervisory Board
held 16 meetings where issues in
the scope of the Supervisory Board
were considered. Inter alia, these is-
sues concerned:
changes in the composition of
the Management Board of the
bank, approval of the number of
Management Board members;
assessment of performance
of the bank’s strategy and ap-
proval of amendments thereto;
changes in the organizatio-
nal chart of the bank;
consideration and approval
of the statements and per-
formance of the bank and
its separate units;
definition of the date of listing
persons entitled to dividends
within the maximum term
set out by the effective law;
approval of the Remunera-
tion Committee of the bank;
approval of new internal
documents and amend-
ments to the existing ones,
including in terms of risk
management, etc.
Information on the executive body of December 31, 2018
The bank’s collegial executive body
is the Management Board, which
manages the current activity of the
bank and is responsible for its per-
formance in line with the principles
and procedure stipulated by the
Charter of the bank, decisions of the
General Shareholders’ Meeting, and
the Supervisory Board of the bank.
In the course of 2018, the Manage-
ment Board adopted 56 decisions
on issues that fall within its compe-
tence as determined by the Charter
of the bank and the Bylaws on the
Management Board. The issues
concerned the current activities of
the bank.
Composition of the executive body Functional duties
Piotrowski Jean-Paul Chairman of the Management Board
Bondarieva Larysa Valeriivna Deputy Chairman of the Management Board in charge of Corporate and Capital Markets
Zhukova Galyna Valentynivna Deputy Chairman of the Management Board in charge of Retail and Network
Pallard Jean-Pierre Deputy Chairman of the Management Board in charge of Operations
Ferm Hans Management Board Member, Chief Risk Officer
Koller Hunther Management Board Member, Chief Compliance Officer
Sopranzi Giorgio* Management Board Member, Chief Financial Officer
Fallick Stephane* Management Board Member, Head of Development and Innovations
Description Over 2018, the Management Board made 56 decisions on the issues in its scope as defined by the Charter of the bank and the Bylaws on the Management Board. The issues concerned current operations of the bank.
* Decision on the appointment was made on December 28, 2018, assumed office upon obtaining the employment permit (January 9, 2019).
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 9796 Translation from Ukrainian original Translation from Ukrainian original
Over 2018, Lefevre Regis Christian
Maurice and Ganah Vadym were re-
moved from the Management Board
of the bank; the decision №13. on
the appointment of three Deputy
Chairmen of the Management Board
from among the above persons was
made on October 11, 2018.
The Chairman of the Management
Board exercises the function of the
head of the collegial executive body
of the bank and manages its activ-
ities. The Management Board con-
sists of the following positions: the
Chairman of the Management Board
and Members of the Management
Board (including Deputy Chairman
of the Management Board if the lat-
ter is appointed by the Supervisory
Board). Members of the Supervisory
Board or the Revision Commission
may not be appointed Members
of the Management Board. The
rights, duties and responsibility of
the Chairman and members of the
Management Board are determined
by the provisions of the law, Charter,
Bylaws on the Management Board
and also by civil contracts, labor
agreements (contracts) concluded
with each of them.
At the end of 2018, the bank’s net pro-
fit amounted to UAH 1,462,649 thou-
sand vs. UAH 1,109,501 thousand
in 2017, which proves the efficiency
of the strategy and reliable perfor-
mance of the bank’s management
and control bodies in a complex en-
vironment.
5) KEY CHARACTERISTICS OF INTERNAL CONTROL
AND ISSUER RISK MANAGEMENT SYSTEMS
Information on the establishment of the revision Commission or introduction
of Inspector position:
Yes, the Revision Commission was established, the number of its members
is 3 persons and it met on average 4 times per year over the last three years.
Information on the responsibilities of management bodies
General Supervisory Executive Not Shareholders’ Board Body in the scope Meeting of any body
Definition of the key activity areas (strategy) Yes No No No
Approval of action plans (business plans) No No Yes No
Approval of annual financial statements, or balance sheet, or budget Yes Yes No No
Election and termination of powers of the Chairman and members of Executive Body No Yes No No
Election and termination of powers of the Chairman and members of Supervisory Board Yes No No No
Election and termination of powers of the Chairman and members of the Revision Commission Yes No No No
Definition of the amount of remuneration for the Chairman and members of the Executive Body No Yes No No
Definition of the amount of remuneration for the Chairman and members of the Supervisory Board Yes No No No
Decision on imposing liability on the members of the Executive Body No Yes No No
Decision on additional share issue Yes No No No
Decision on buying back, selling and placing of own shares Yes No No No
Approval of external auditor No Yes No No
Approval of agreements involving a conflict of interests No Yes No No
Information on the existence of
a clause that limits the Executive
Body’s powers to make decisions on
entering into agreements, given their
amount, on behalf of the Joint-Stock
Company in the Charter: YES.
Information on the existence of a
clause on the conflict of interests,
i.e. a controversy between personal
interests of an officer or their relat-
ed parties and the obligation to act
in the interests of the Joint-Stock
Company, in the Charter or internal
documents of the Joint-Stock Com-
pany: YES.
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 9998 Translation from Ukrainian original Translation from Ukrainian original
Information on average frequency of audits carried out by an independent auditor over the reporting period
Yes No
Never Х
Less than once a year Х
Once a year Х
More than once a year Х
Information on the authority that made the decision on the approval of an independent auditor
Yes No
General Shareholders’ Meeting Х
Supervisory Board Х
Executive Body Х
Other (specify) –
Information on the initiator of the latest inspection by the Revision Commission
Yes No
Own initiative Х
Upon instruction of the General Meeting Х
Upon instruction of Supervisory Board Х
Upon request of the executive body Х
Upon demand of shareholders owning in total more than 10 per cent of votes Х
Other (specify) –
Information on documents available in the bank
Yes No
Bylaws on the General Shareholders’ Meeting Х
Bylaws on the Supervisory Board Х
Bylaws on the Executive Body Х
Bylaws on the Officers of Joint-Stock Company Х
Bylaws on the Revision Commission (or Inspector) Х
Bylaws on the Shares of Joint-Stock Company Х
Bylaws on the Profit Distribution Procedure Х
Other (specify) –
Information on the ways of shareholders’ access to information on the bank’s activities
Information Information Information is disclosed Documents Copies Informationon the activities is communicated in the public database of are provided of documents is posted onof the Joint-Stock at General the National Commission for directly in are available the web pageCompany Meetings Securities and Stock Market the Joint-Stock upon request of the Joint- on the market of securities Company of shareholder Stock or through a person in charge Company of disclosing settled information on behalf of stock market participants
Financialstatements, P&L Yes Yes Yes Yes Yes
Informationon shareholdersowning 10 andmore percentof the share capital Yes Yes Yes Yes Yes
Information onthe compositionof managementbodiesof the company Yes Yes Yes Yes Yes
Charterand internaldocuments Yes No Yes Yes Yes
Minutesof the GeneralShareholders’Meetings upontheir holding Yes No Yes Yes No
Amountof remunerationfor officersof the Joint-StockCompany Yes No Yes Yes No
Information on preparing financial statements under International Financial Reporting Standards: YES.
ANNUAL REPORT 2018 / JSC “CREDIT AGRICOLE BANK”JSC “CREDIT AGRICOLE BANK” / ANNUAL REPORT 2018 101100 Translation from Ukrainian original Translation from Ukrainian original
According to the Group’s standards,
the system of internal control of JSC
“Credit Agricole Bank” relies upon
three lines of defense: the first line
is operational business lines, the
second line is risk management and
compliance business lines, and the
third line is audit.
A permanent control system is rolled
out in the Credit Agricole Bank to
organize the second line of defense
and to keep the first one under
observation. The permanent con-
trol system covers the main bank
activities such as credit activity,
operational activity, financial risk,
accounting transactions, operational
risks, compliance, information secu-
rity and business continuity, physical
security, OES activity, recovery pro-
cesses, etc.
In the case of negative control re-
sults, an action plan is launched in
order to correct the deviations and
improve process controls.
Like Credit Agricole Group, Credit
Agricole Bank’s anti-corruption
system is ISO 37001 certified by
an independent external company.
This highlights the Group’s and the
bank’s determination and the quali-
ty of its program for preventing cor-
ruption (identification and analysis of
corruption risks, and mitigation mea-
sures to reduce them).
The risk management system of
Credit Agricole Bank is character-
ized by the bank’s medium-term
development strategy. Together with
the bank’s budget, its risk manage-
ment policy is structured to align with
the Strategy. In line with the Strategy,
the Risk Appetite Statement sets the
level and types of risks that the bank
is willing to accept or avoid in order to
achieve its business objectives. It in-
cludes qualitative statements as well
as quantitative measures expressed
relative to capital, risk measures, li-
quidity and other relevant measures
as appropriate. The Risk Appetite
Statement covers the whole scope
of risk types, such as credit, liquidity,
market, operational and compliance
risks, and sets out the key risk indi-
cators (with an essential impact on
the bank’s activity) and other limits
and thresholds (minor impact). The
Risk Appetite Statement is reviewed
and approved once a year (or more
frequently if there are any changes)
and is subject to the Supervisory
Board’s approval.
The Risk Strategy sets out the ap-
proved CRG (Group Risk Com-
mittee) limits, caps, operational
limits and other constraints set up by
CRG, based on the CRG presenta-
tion made by the CA-Ukraine Lines
of Business and ALM/Treasury, in an
operational context. It also describes
an overview of the risk management
& monitoring mechanism, dele-
gations as well as the current risk
profile of credit portfolios of Credit
Agricole Bank.
The high-level principles of risk man-
agement are implemented through
bylaws, procedures, instructions
and other internal methodology in
reference to the risk type.
6) LIST OF PERSONS WHO HAVE A SUBSTANTIAL HOLDING OF ISSUER’S SHARES,
WHETHER DIRECTLY OR INDIRECTLY
No. Full name of a legal entity, Identification number according to the Unified Amount or surname, name State Register of Legal Entities, Individual of shareholder’s and patronymic (if any) Entrepreneurs and Public Organizations (owner’s) share of an individual that is (are) (for resident legal entities), registration (percentage the owner (owners) code/number with trade, banking or court to the authorized of a substantial shareholding register, legal entity registration certificate capital ratio) of a foreign local authority (for non-resident legal entities)
1 CREDIT AGRICOLE S.A. (France), Nanterre Commerce and Companies Registry 100 % Place des Etats-Unis, 12, registration number: 784608416 Montrouge Сedex, France, 92127
7) INFORMATION ON ANY RESTRICTIONS OF PARTICIPATION OR VOTING RIGHTS
OF SHAREHOLDERS (PARTICIPANTS) IN THE ISSUER’S GENERAL MEETING
Total number of shares Number Grounds for Date of restriction of restricted shares restriction origination
– – – –
Information on the restriction of participation or voting rights of shareholders (participants) in the issuer’s General
Meeting: not applicable.
8) PROCEDURE FOR APPOINTMENT AND DISMISSAL OF ISSUER OFFICERS.
INFORMATION ON ANY REMUNERATIONS OR COMPENSATIONS DUE TO ISSUER
OFFICERS IN CASE OF THEIR DISMISSAL:
The procedure for appointment, dis-
missal, remunerations or compen-
sations to the officers of collegial
management and control bodies of
banks is implemented in compliance
with the requirements of the law of
Ukraine “On Joint Stock Companies”,
the Law of Ukraine “On Banks and
Banking”, Charter of the bank and the
Bylaws on the Supervisory Board and
Management Board, contracts (if any).
The composition of the Supervisory
Board is determined by the Gen-
eral Shareholders’ Meeting. The
members of the Supervisory Board
are elected from among the bank’s
shareholders or their representatives
and/or independent members in the
number determined by the general
Shareholders’ Meeting, however, not
less than 5 (five) persons.
The members of the Management
Board of the bank are appointed
by the decision of the Supervisory
Board of the bank in the number of at
least 3 persons for a five-year term.
Other officers of the bank are ap-
pointed and dismissed by order of
the Chairman of the Management
Board.
9) AUTHORITY FOR ISSUER OFFICERS
The authorities for the officers of the issuer are determined by the Law of
Ukraine “On Joint Stock Companies” , the Law of Ukraine “On Banks and
Banking”, the Bank’s Charter, Bylaws on the Supervisory Board, Bylaws on
the Management Board and their job descriptions.