When did you first come to Kyiv, and what brought you here?
The answer to that is a little convoluted. I lived in Moscow for eight years, and I was the head of the corporate bank for Citibank for Russia, Ukraine and Kazakhstan. That position involved travelling to Ukraine and Kazakhstan as well, and all around them. So I had been to Ukraine many times before I moved here and visited all the major cities. But I finally moved here eleven months ago, and living here is obviously different from visiting for a two or three day business trip. I of course already had a good feel for the country, but the big difference is that when you live here you get to really know the people. One of the great things about being in Kyiv and part of the local community is that it gives you a whole different perspective and a true sense of what this country and its people are really all about. That’s been a great pleasure.
What are your impressions of the country and its people?
I like Kyiv, and I always cite five reasons for this. Firstly, Kyiv is a much smaller city than Moscow. As an ex-pat in the business community you spend about ninety percent of your time on the right bank so when you look at the actual area in which you spend almost all your time it only covers about ten square kilometres. This gives you the chance to really get to know the place very quickly, and it becomes much more like a village. Secondly, compared to Moscow there’s much less traffic, and that’s really a pleasure. I was just mentioning to my wife Lucille last week that weekends here seem like three days long compared to life in Moscow because in Moscow the traffic is always so heavy you basically get the chance to do one thing in the morning, one in the afternoon, and if you have the energy left you might feel like going out in the evening. But here in Kyiv the traffic is so much lighter you can do three things in the morning, three things in the afternoon and still go do two or three things in the evening, so you feel like you have a lot more free time. When you think about it, that’s a real qualitative improvement in life. Thirdly, the people here are really wonderful – they’re much more open to foreigners and their level of English is much better. Generally the people are much more open and friendly, and when I say that I mean everyone – the foreigners, the locals, and my clients with Citibank. Fourthly, I like the fact prices here don’t scare me. It’s much cheaper here compared to Moscow where things can be so ridiculously expensive it makes you wonder if you even want to walk into a place. And finally, in summer Kyiv is a wonderful place. I moved here in April, and we already had an early summer. What amazed me is that within twenty minutes I could be in a beach club relaxing on a sandy beach with a cold beer (or two). A different world in only twenty minutes. So for all these reasons, I like Kyiv. A lot!
You’re the country head for Citibank in Ukraine. How is that going?
It’s going great. We have a great team here of about 110 people. Fabulous, efficient teamwork. Perhaps it is because our team is young, and sixty percent women. Our balance sheet isn’t that large compared to some other major banks in Ukraine, but it’s not saddled with a lot of problems like some other European banks that invested into Ukraine before the crisis. We have a very lean, fit balance sheet which gives us a strong business proposition where we’re actively engaging with a lot of new customers. There were certain sectors in which we felt we were underrepresented so in the last nine months we’ve been adding a lot of clients. We have an incredibly broad menu of products such as cash management, trade, FX and treasury services, the underwriting of Euro bonds and equity transactions, local and foreign currency lending, export agency financing, and the long term financing of capital investment. So compared to all the other banks I think we’ve got the broadest and best menu of banking products and that’s exciting because our customers need this. Every meeting I attend we find new things to do with our clients so that gives me a lot of optimism. Despite the existing challenges in the macro economic and political situation in the country, and the fact 2011 has projected economic growth of only four percent, we’re finding a lot of things to do and we’re growing quite rapidly.
Being in the heart of banking you must be well exposed to how business and the general economy is doing right now, post crisis. What’s your impressions of where we are and where we’re heading?
I think it’s getting better in several regards. I say that because I’m noticing that in meetings with our clients a lot of them are reinstituting capital investment projects which they’d postponed during the crisis, and that’s a good sign. A lot of them are seeking to further internationalise and are looking at acquisitions either within or outside Ukraine, which is also positive. A lot of our clients are looking for new and innovative ways to do business and become more efficient. One thing the crisis taught everyone is that you have to be more efficient, cut out the fat and the unnecessary expenditures, and you have to have better systems that give you better real-time reporting of your cash flows and different account balances. So those are positive things. The challenge of course is that the level of foreign direct investment in this country is still extremely low mostly due to the fact that there’s still too many bureaucratic obstacles, a lot of corruption, and simply a very low level of facilitation of foreign investment. That’s a real shame because the country needs it to accelerate the upgrade of its industrial base, provide more employment, and more skills to, and diversification of, the labour force. This is something that needs to be thoroughly addressed, and to be very honest there’s still a good way to go.
Citibank was very badly hit by the crisis, and there’s a lot of talk about a second wave. Do you think that’s likely?
No, not directly. I think we’re out of this crisis, and thank God we got out of it because at its height it was very scary. We weren’t far from a collapse of the global banking system and that would have been catastrophic. We’re past that now. Citibank, like many other banks, has very strongly recapitalised and now we have a very strong financial structure so we’re on an excellent footing. The challenge for us is to regain the earning power we had before the crisis, but in terms of financial strength and capital we’re fine. One thing we learned from the crisis is that every five-to-ten years particularly in the emerging markets you’re going to get hit by challenges that come from somewhere you’re not expecting. It’s going to be large, and whatever and wherever it happens it’s going to have an effect on the rest of the world. So you have to be very careful about what you choose to propose to your clients and how you engage your own balance sheet, knowing that we live in a much more volatile and correlated world. What caused the crisis is gone, but the amount of sovereign debt outstanding is now very scary, and that takes a long time to work through. It’s still not completely certain whether that question is going to be adequately addressed. So that’s one reason for concern.
Do you think the new tax code will help or hinder inward investment?
I think it could very well be neutral. The key is whether or not it will be transparently and consistently implemented. That is the most important thing. It’s one thing to promulgate a law, and it’s another thing to efficiently and transparently enforce it. The jury is still out. If you talk to Ukrainian businesses, they’re very concerned over selective application of the law, and having to deal with the tax authorities on an individual basis.
You came to Ukraine with Yanukovych already in power, and he’s brought back a lot of concerns over protectionism benefiting local oligarchs. Is this something you come across?
We work with the top Ukrainian companies in virtually every sector, so that gives us a broad perspective of what the Ukrainian corporate base thinks about things. I don’t really think protectionism is the real issue. We also work with more than 350 multinationals, and I don’t hear about protectionism as the key issue. I hear more about VAT refund timeliness, import and export quotas, customs efficiency, and inefficiencies or non-transparency in the courtroom. I think what most multinationals and even a lot of local companies have issue with is standard treatment for everyone. It’s really all about treating everyone the same, and that comes down to the word transparency. No special deals, nothing done under the table, no arrangements that can’t be explained.
Citibank has focused so far in Ukraine on the business sector. Do you have plans to implement retail banking?
We’re currently deciding when to initiate retail banking. If we do decide to implement then it could be operational some time next year. We would focus on the latest technology, and there would be a very special feel to our branch compared to what you see around town. We would also be focusing on exceptional customer service and innovative products. That would be very exciting.
What are your hopes for the future of Ukraine?
Despite what everyone says about the country’s challenges, there are great opportunities here. It’s very worthwhile being here. If you have the right vision, the right customers and the right capabilities, you have a great match. Everyone can win through this kind of cooperation. That’s why I am very positive. You know, eyes wide open: there are a lot of obstacles here, but there are a lot of opportunities. Even just twelve months after the close of the crisis, we’re finding more things to do now than we would have imagined a year ago. As a matter of fact, this month for the first time I am feeling it is really getting very very busy around here.
Finally, what do you like to do in Kyiv and where do you like to do it?
I enjoy meeting all the wonderful people in this city, in all different contexts both business and social. I’m on the board of the American Chamber of Commerce and the Forum For Leading International Financial Institutions, and I like to be involved a lot. I like to be out a lot, to share my experience, and to work with people either on increasing international cooperation or simply trying to address some issues that are important to all of us. Kyiv really gives you the opportunity to do all that much more than I ever imagined. On the social side, I’m a big music fan so I’m always looking for interesting local acts and international artists that come here, so you’ll often find me in some of the more popular live music clubs. I like modern art so I’m starting to hit some of the museums and galleries. My favourite restaurants are Pantagruel, Stefano’s, and my favourite Chinese restaurant, Harbin. I’m a great fan of Asian cuisine, so the San Tori restaurant in Podil is also one of my favourites as it has a Thai chef who, if you know him, will make a one hundred percent Thai meal for you. Enough to make your eyes water.