"Speed of response is a key requirement in a crisis," FUIB's Chairman of the Board Serhiy Chernenko says
How is the current crisis different from the previous ones in terms of bank's management specifics?
In our country, crises occur every five years. However, the current crisis is unique in the sense that, first of all, it is a military-political crisis and only then an economic one. Economic problems certainly exist, they have accumulated over quite long period of time. However, these problems on their own would not be so painful if they were not accompanied by events related to military activities, annexation of a large part of the territory of Ukraine, and accordingly, the stopping of business and of the banking system in these regions.
How do you assess your readiness for these events?
To begin with, we were absolutely unprepared for military actions. Although we have developed the bank's program of "business continuity" on a regular basis. For example, we simulated the work of the bank in the event of terrorist attacks or mining. I remember when before all the tragic events, many of us took it not quite seriously, laughed how artificial and not real all that looked. But our attitude gradually changed as events unfolded on the Maidan, and everything that followed it.
How have these events influenced the specificity of management decision-making?
Events of the last year forced us to completely revise the approaches to management. Crisis management seriously differs from the ordinary course of business, primarily by the fact that the time to react to an event after the instance of this event is very short and decisions must be made quickly. Therefore, speed of reaction was a key requirement in the crisis. We have restructured all of our actions and the scheme of work in such a way that we meet this major requirement. It was necessary to speed up the exchange of information; for this reason we have simplified and lowered communication barriers within the bank. For example, we began to hold daily crisis meetings, which gathered not only top management but also the managers of the lower level. We have also adapted management reporting to the requirements of the time: actually, a new package of reports was created for such meetings. These reports dealt with the main areas of activity, i.e. the liquidity, the situation with customers, the situation in the regions, operational risks or safety. Among us, we called such meetings "productive paranoia" - in fact, at these meetings, we tried to come up with the most improbable scenarios that could still happen and how to prepare for this.
In stressful situations, the behavior of people changes drastically. How did you cope with the mood within the team?
Work with the mood is the basis of crisis management. There were a lot of events; they had been negative, and this has seriously undermined the psychological atmosphere in the team. It was important to let people know that they are not left alone with their problems. We have tried to create an overall picture for all staff in terms of perception of the commonality of challenges. It was important for us that people leave behind generic perception of the situation and from evaluation of their work exclusively from the point of view of the KPI or their own interests in one direction of the business. By the way, thanks to our daily meetings, we pretty quickly found a category of people who turned out to be effective specially in stressful situations and those who created the general mood in the team. We pushed forward such specialists by giving them more authority.
Let us analyze a particular case: the annexation of the Crimea happened. How has the Bank responded to this event?
To begin with, we had to operate in conditions of complete uncertainty - we have encountered such phenomenon as annexation of the territory for the first time. We began to study the relevant documents, found out what "annexation" means, analyzed similar situations in Abkhazia and Ossetia. We have developed several scenarios of how events could develop - preservation of the economic status quo of the peninsula or separation from Ukraine. In general, when it was announced about the departure from the Crimea, we were ready. By that time, we had managed to take out all the values and to conduct work with clients.
In general, we devided the problem into components: for example, work with clients - we gave instructions to call all and find out who is going to move to the mainland Ukraine. We announced the planned closure of the bank and gave customers time to pick up the money. In addition, it was decided to take away all the documents from the peninsula. So we closed the operating risks and we were ready for judicial proceedings. At the same time, we have tried to simulate what would happen to bank's liquidity in the event of a total loss of the Crimean assets, and developed a restructuring program for borrowers. Of course, this is a very simplified scheme of our work.
How do you currently assess the effectiveness of the work done?
At that time, what had happened seemed to be a tragedy. But amid the following events associated with the Donbas, we realized that the Crimea was just a nasty slap in the face, but not a serious blow. In the Crimea, the bank did not lose any property, or valuables, or money. We managed to take everything out. All our losses were limited by the loan portfolio, the share of which in the total portfolio made only 2-5%. Therefore, I evaluate our work in the Crimea as positive in general.
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