Agribusiness in Serbia displays deficiencies in certain segments, primarily due to a lack of investment. The further advancement of Serbian agriculture will depend to the greatest extent on support for financing agricultural production, as well as investments related to improving the mechanisation and merging of farms.
Agriculture requires constant financial and credit support, due to the specificities of the production cycle, slow capital turnover, low profitability of production and a lack of producers’ own sources of financing. Financing is the most important and most complex problem of domestic agriculture. Here we discuss this and other topics with Jelena Galić, President of the Executive Board of AIK Banka, which is recognised for its contribution to the development of agribusiness.
Our agriculture would develop much faster if there was more money. You are a bank that helps and invests in agriculture. What conditions are required in order for farms and agricultural companies to be able to receive loans from AIK? Can they expect lower interest rates and longer repayment periods?
All farmers can find something for their farm at AIK Banka. Alongside standard loans for working capital and fixed assets, AIK Banka has also introduced revolving credit, intended for farms for a period up to three years.
The main benefit of revolving credit is actually managing the use of funds, where farmers can themselves withdraw the amounts they need, according to the limits of their revolving credit, and to later return the funds in accordance with available cash inflows, i.e. at a moment when they have surplus funds on their account. With these advantages, farmers mostly receive the required flexibility, and they only part interest in the part they have used.
Apart from commercial offers, there is an existing loan offer in cooperation with the Guarantee Fund of AP Vojvodina, as well as the Fund for revolving credit of the Republic of Serbia, where lending conditions in cooperation with these institutions are somewhat more favourable for farmers.
According to the latest statistics, in the first nine months of this year, AIK Banka recorded growth in gross profit of 5.2 billion dinars. What contributed the most to this good performance of the bank?
As a universal type bank, we are committed to doing business with all customer segments, placing an emphasis on efficiency and innovation in providing banking services to our clients. We are one of the leaders in mobile and electronic banking, which is a trend that all banks have turned towards, and those who head in that way earlier have a greater chance of better positioning themselves. Digital banking enables us to have a good and efficient approach to citizens and small businesses, while cooperation with the economy has remained our specificity, which we consider as being our comparative advantage.
Our goal is to form an offer that will enable every client to find a product that suits their specific needs and in that way, we can continuously enlarge our customer base. In Serbia, we are among the top five banks in terms of balance sheet totals. Compared with current business trends in the banking industry and results achieved in this sector in the previous period, AIK Banka has achieved better results than the industry average. In the first three quarters of this year, the yield on equity of about 10 per cent has been achieved, with the return on assets exceeding three per cent.
The Bank’s aim is to continue this trend, in order for us to be able, in a relatively short period of time, to position ourselves among the top three banks on the domestic market, not only in terms of financial considerations but also on the basis of the quality of operations.
Interest on savings has been very modest in the last few years, but AIK Banka has nevertheless prepared several attractive savings offers. What is this about and have savers accepted that?
Over 600 million euros of citizens’ savings is a sign that citizens have recognised AIK Banka as a bank that can be entrusted with their savings. The terms of savings at AIK Bank have been among the lowest available on the market for years. As a sign of gratitude for the trust placed in us by our clients, in addition to attractive interest rates, we also offer a range of other benefits. This primarily relates to the complete flexibility of savings deposits, in which we enable customers to always have their money available.
Term deposits of 14 months with interest payments in advance are the first innovation in the offer of AIK Bank when it comes to savings. The benefits of this product are simplicity, flexibility and interest payments in advance. AIK Banka has also prepared an offer of term savings at 36 months, with an attractive interest rate. In the case that a client decides to prematurely withdraw their deposited savings, AIK Banka goes out of its way to meet the needs of customers by providing them with the payment of interest on the realised maturity.
AIK Banka has achieved better results than the industry average. In the first three quarters of this year, the yield on equity of about 10 per cent has been achieved, with the return on assets exceeding three per cent. The Bank’s aim is to continue this trend, in order for us to be able, in a relatively short period of time, to position ourselves among the top three banks on the domestic market, not only in terms of financial considerations but also on the basis of the quality of operations
AIK Banka enables its customers to have a quick and permanent connection with the bank thanks to mobile banking. What does your offer include and how have clients accepted that?
In the last few years, AIK Banka has been devoted to optimising business processes and increasing the efficiency of service to customers, primarily through the development of contemporary digital channels, or our e-banking and m-banking service platforms. In the trend of decreasing interest rates, which is in the focus of every bank, including AIK Bank, services will more than ever be tailored to the client.
The task of banks is to be efficient and available to clients at any time, while the products offered to the clients must be innovative, adapted to clients’ needs and accessible to every individual. Ever more clients will increasingly perform an entire range of jobs from home, so we will move towards a banking system that will operate 24-hours-a-day, seven-days-a-week, thus banks will adapt their offer to this trend.
As one of the leaders in the area of mobile and electronic banking, we will continue to invest further in the development of our digital platform, in order for us to offer new products to a wide range of clients, and all in the direction of strengthening our client base.
And you also have good news for the oldest clients – at your bank pensions are paid seven days prior to their formal payment. How much do pensioners appreciate that, and do you have some other enticing offers for the elderly?
AIK Bank pays special attention to pensioners, as an important category of clients, and strives to create an environment in which this category of clients will have a full service in one place and under favourable conditions. AIK Banka has included in its offer active credit for pensioners with life insurance included, where the cost of insurance is covered by the bank for the entire loan repayment period.
There is also the well-known offer of advanced pension payments, which implies that funds are paid onto accounts up to seven days prior to the actual payment of pensions or pension contributions from the PIO Fund. With these and other advantages, we want to retain this segment of clients and offer them conditions that will be in accordance with their financial capabilities.