CEO of KredoBank Jakub Karnowski:

First, as a Pole, I'm proud of how Poles responded after 24 February 2022. What happened in Poland was unprecedented. But if something is very unusual on the positive side, then it naturally evolves over time. That's normal.

What I see now is that the historical discussion is back again. As a Pole who manages a Ukrainian bank, I believe it's based on a misunderstanding and an insufficient level of knowledge on both sides. Also, this situation is being masterfully exploited by our common enemy, the Russian Federation. This must be obvious because they are “masters of the universe” when it comes to playing us against each other.

As for me, I believe the future is more important than the past. So, nowadays Ukraine’s European integration is in the interest of Poland and of Europe as a whole. It’s to the same extent that Poland's, for example, European integration 20–30 years ago was in the interest of German companies, because they benefited from the European Union enlargement. It was a win-win – German companies have benefited from Poland’s European integration and Poland has benefited greatly from this process as well. Germany is, of course, the largest economic partner of Poland.

But when you look at Polish–German relations in a historical dimension, they were much worse compared to those between Poland and Ukraine. Everything can be fixed if you think in terms of business interests and future development.

And it's not about being sentimental. Quite the opposite, I'm trying to think in terms of our common interests, the economic future and the economic well-being of both countries. It is all about business in Europe and Poland needs Ukraine as a part of Europe. If we want to develop, we need a large new member like Ukraine in the future.

Poland's interest is to have Ukraine in the European Union, but I would also say that it's more important for Ukraine to have a firm perspective to join the EU in the future than to have a quick integration. I don't believe in quick integration. But from the economic perspective, from the catching up effects, from allowing Ukraine to repeat Poland's economic success from the last 30 years, it’s important that Ukraine integrates. Moving towards Europe is more important than integrating in 3–5 years.

I do believe in the economic success of Ukraine, but of course, it won't come without pain, it won't come without reforms. In my opinion, a lot has happened in Ukraine after 2015-2016 in terms of institutional reforms. Institutionally, Ukraine is in a totally different stage than it was 10 years ago. Changes are happening even despite the war.

When you speak about the current political and financial support, it's obvious Ukraine has received a lot of support, and this is happening right now because Ukraine is defending Europe from Russia. It's also clear that Putin wants to harm Poland and Europe, as Russia is actively working against Poland’s and Europe’s interests.

Given this fact, supporting Ukraine is quite literally in the interests of Ukraine’s European partners. This includes economic interests as well.

We continue to provide business loans, combining traditional banking products with international guarantee schemes and risk-sharing instruments. A significant proportion of the financing is provided in cooperation with EIB, EBRD and Poland’s BGK (Bank Gospodarstwa Krajowego) through a partnership with the European Commission, as well as under the Ukraine Facility. This enables us to work with a wider range of companies, particularly in the SME (small and medium-sized enterprises) segment, where risk levels are usually the key constraint. Currently, the bank’s loan portfolio focuses on small and medium-sized enterprises which create half of the jobs in Ukraine. The largest share of loans is allocated to sectors such as agriculture, the food industry, manufacturing, trade and logistics. Companies operating in frontline and ‘red/orange’ zones account for a significant share, receiving around 38 per cent of funding under international programmes. In total, under the Ukraine Facility and related guarantee instruments, the bank has provided financing to 773 clients totalling over €300 million, of which 75 per cent comes through EBRD programmes and around 25 per cent is provided by BGK.

The largest volumes of financing are directed towards working capital, the agricultural sector and the food industry, as well as investment projects by SMEs. A separate, rapidly growing segment is energy projects: solar power stations, generators and energy-efficient solutions. Overall, the bank has provided financing to dozens of clients in this sector, totalling hundreds of millions of hryvnias.

Solar power stations are the priority targets for funding. Thanks to the introduction of a separate strand under the ‘Affordable Loans 5-7-9’ programme, there has been an increase in customer enquiries regarding financing for equipment such as generators. Over the past year, we have provided UAH 300 million in loans for a variety of energy projects. Part of this was financed through guarantees from the European Bank for Reconstruction and Development, and part through grant programmes from EBRD, with whom we have been working since the start of the full-scale war. During the Ukraine Recovery Conference in Gdańsk, we signed another agreement, and a new grant programme from the EBRD will launch in July.

As you know, around 70% of the Ukrainian banking sector is state-owned. Based on experience, history, and economic theory, we know that this is not an optimal structure.

We don't want political considerations to influence economic decisions on a major scale. Lending decisions should be based on economic factors, not political influence. Therefore, it is important for the Ukrainian economy to have a diverse banking sector with banks from different countries, not only state-owned institutions.

I remember that around 15 years ago, the World Bank described the Polish banking sector as one of the best-practice models. At that time, we had PKO Bank Polski, which is the owner of KredoBank, and which had a significant share of the banking sector in Poland. Meanwhile, there was a wide presence of banks from different countries: Italy, Portugal, Spain, the USA, France, etc.

I believe that, for the sake of competition and efficiency, the Ukrainian banking sector should move in a similar direction. Of course, it is impossible to simply copy the Polish model, but the principles can be comparable. Foreign capital is important for supporting Ukraine’s economic growth, and competition from international investors and banks from different countries can play a key role in this process.

We need competition. We need a healthy balance between state-owned and private players.