Outstanding Crisis Leadership 2020: Finance and Business

The Covid pandemic has had less severe effects in Kenya than other countries, enabling Absa Bank Kenya to safeguard employees while allowing retail and corporate customers to continue transacting safely. The bank reached out to small to medium-sized enterprises, restructuring over 50,000 client loans valued at more than KEs57 billion and providing up to KEs19 million in unsecured overdrafts and short-term loans for recurring expenses and salaries.

For retail customers, the bank has waived fees across digital banking transactions and given up to 3% cash back on Absa card transactions. Absa has also been active helping the larger community weather the crisis. It has donated masks and KEs59 million in funds to the Covid-19 Emergency Response Fund; financed new e-learning infrastructure for education, capital management advisory services and training for small businesses; and, on a different but popular note, contributed to marathoner Eliud Kipchoge’s foundation to support up-and-coming athletes.

As borders closed in the early days of Covid, supply chains and international trade suffered. Asian Development Bank helped soften the blow by providing additional funds and flexibility to its $2.4 billion Trade and Supply Chain Finance Program (TSCFP), including a $200 million facility to support over $400 million in financing and $800 million with 50-50 risk sharing over the next year. Since April, TSCFP has supported some 5,000 transactions worth approximately $3.4 billion, including about 1,100 deals for supplies used to fight the coronavirus.

ADB also shifted toward digitization, including launching a tool that maps end-to-end supply chains for seven critical products used to fight Covid. “The pandemic exposed the need for faster acceptance of digital standards and the need for more digital initiatives to move trade finance from its heavy reliance on paper-based, face-to-face delivery of documents,” says Steven Beck, head of the TSCFP.

Jordan’s Arab Bank operates throughout the Middle East; as each country in its geographic reach responded to the pandemic, the bank has followed up with relief provisions, including more than $25 million in donations to national Covid relief funds in Jordan, the Palestine Authority and Egypt. For consumers in those countries as well as Bahrain and the United Arab Emirates, the bank is extending grace periods and lower interest rates on loans, lower fees or higher limits on certain transactions, extended expiration dates on credit cards and cash back on Covid tests. In Jordan, Arab Bank supports SMEs through the Central Bank’s preferential loan facilities, helping businesses stay afloat through the crisis.

Along with participating in national programs that extend financing to help companies make payroll, Banco de Bogotá has embraced digital channels that facilitate banking for customers living with quarantine restrictions and implemented QR codes for contactless payment via its app. The bank also redesigned how savings accounts are opened and is delivering debit cards to homes at no cost; 47,000 pensioners and 20,000 working-age adults opened accounts through these programs thus far.

More than 1.5 million customers who potentially faced financial difficulties are also receiving relief from Banco de Bogotá through an online program that reduces minimum payments and extends grace periods while generating no negative credit reports. To further help customers, the bank has lowered interest rates and lowered or eliminated fees for bank accounts and ATM usage.

“At Banco de Chile, we believe that entrepreneurs, micro, small and medium-sized enterprises are the driving force behind the country’s economy,” says María Victoria Martabit, head of Corporate Affairs and Sustainable Development. “Yet, it was the segment hardest hit by the pandemic.”

This year was the bank’s fourth annual National Entrepreneur Challenge competition in partnership with Desafío Levantemos Chile, a national charity, attracting 56,000 participants. Applicants received training and the opportunity to exhibit and sell their products at regional fairs; with finalists able to advertise on Banco de Chile’s communications platforms and for one competition, Ch$150 million in prizes were awarded. The bank also launched a free virtual marketplace for entrepreneurs to exhibit products.

“At Banco de Chile, we believe that entrepreneurs, micro, small and medium-sized enterprises are the driving force behind the country’s economy,” says María Victoria Martabit, head of Corporate Affairs and Sustainable Development. “Yet, it was the segment hardest hit by the pandemic.”

This year was the bank’s fourth annual National Entrepreneur Challenge competition in partnership with Desafío Levantemos Chile, a national charity, attracting 56,000 participants. Applicants received training and the opportunity to exhibit and sell their products at regional fairs; with finalists able to advertise on Banco de Chile’s communications platforms and for one competition, Ch$150 million in prizes were awarded. The bank also launched a free virtual marketplace for entrepreneurs to exhibit products.

Soon after the Dominican government declared a state of emergency in response to the pandemic, Banreservas, the island nation’s largest bank, put streamlined systems in place to assist its consumer and corporate clients. The bank worked with the government to design processes to pay SMEs that supply the state during the pandemic and provide them with liquidity to cover fixed costs.

To accelerate money flow and ease cash strains on households, Banreservas created a faster process to confirm the validity of National Treasurer checks; in two weeks, it conceived, developed and implemented a payment method allowing people to use their National Identity Card Document (NID) as a virtual credit card on the Visa network. In partnership with Visa and ADESS, the bank developed an electronic wallet for households and informal workers, integrating 10,356 merchants from two different networks.

BBVA USA’s first priority post-outbreak was the health and safety of its employees, clients and customers; one of its first actions was to assist consumer and small-business customers by reducing or eliminating fees, deferring payments and providing grace periods. The bank also participated in the CARES Act and created a digital business portal in days that can process and deliver $3.3 billion in loans through the Payroll Protection Program (PPP) in less than 60 days.

“From a business perspective, we’ve always recognized that small businesses are the backbone of the US economy,” says J. Reymundo Ocanas, director of communications and responsible business. “They are drivers of success and stability across this country, so the work that we do to help establish and sustain those businesses across our footprint is really done in support of the communities we serve.”

To further help the community in early days of the Covid crisis, BBVA USA also provided rent relief to third-party tenants in buildings they own.

Since 2014, Commercial International Bank has maintained a comprehensive Pandemic Response Plan; so when Covid hit Egypt, the bank was able to respond quickly with protective measures for staff and customers. Along with instituting regular sanitation at its branches and offices, the bank promoted its digital portal to customers and encouraged them to use online channels like mobile banking, internet banking, CIB Smart Wallet and CIB Business Banking accounts from their homes.

CIB also expanded its learning and development programs to help employees develop skills, help client businesses attain their goals and support the community, particularly university students and new talents. It developed a plan to train 21 African delegates to help with banking development in East Africa as CIB looks to expand outside Egypt’s borders.

As banks lowered their risk appetite and the business climate deteriorated following the pandemic outbreak, the availability of trade finance shrunk. More than 80 issuing banks across 31 economies, along with more than 120 confirming banks across 40 countries, requested support from the European Bank for Reconstruction and Development’s Trade Facilitation Program (TFP).

“Risk perceptions about non-payment in international trade are at the highest levels in a decade,” said Maria Mogilnaya, principal banker, TFP. “Banks are increasingly reluctant to take on payment risks in many countries where economic conditions are deteriorating.”

As part of the EBRD’s Covid response, the bank supported clients by increasing its TFP headroom limit for 18 issuing banks from €2 billion to €3 billion and assisted with the import of critical goods into 30 economies, including 63 transactions involving trade in critical medicines, medical supplies and equipment and personal protection products.

Headquartered in Togo, Ecobank Group operates in 33 countries across sub-Saharan Africa and has more than 23 million customers. Since the pandemic hit, Ecobank has provided debt relief on forbearance requests amounting to 26% of outstanding loans or $2.4 billion, including moratoriums and restructured debt solutions. Much of this relief went to customers in Nigeria, where lockdowns and border closures impacted trade flows.

Ecobank further supported customers by leveraging government stimulus packages for SMEs, waiving or reducing fees on interbank transfers, increasing daily transaction limits and onboarding business customers to digital payment modes. The bank also collaborated with the African Union Development Agency’s AUDA-NEPAD 100,000 MSMEs by 2021 program, which support micro, small and medium-sized enterprises across Africa and provided education and financial support to help them weather the pandemic.

The Latin American and the Caribbean economies have endured a triple sudden stop, says IDB Group’s chief economist, Eric Parrado: a halt to human activity, reduction of trade and foreign investment outflows, and lower remittances. IDB Invest, a unit of the Inter-American Development Bank, regards infrastructure, corporate and financial-sector clients as key to creating jobs and reigniting the regional economy. It supports them in part by providing real-time economic data though its Coronavirus Impact Dashboard.

IDB Invest lent US$100 million to Peruvian natural gas distributor Caliddá to expand access to natural gas for low-income households, increasing its lending capacity from $4.5 billion to $7 billion, and raised $2 billion through Covid-19 response bonds. It has also partnered with Banco Davivienda in Colombia to structure and issue the region’s first gender-focused and performance-based social bond. The US$100 million in proceeds will finance women-led SMEs and provide social-interest housing for women in Colombia.

Responding to the pandemic, Qatar Islamic Bank redoubled its efforts to create a seamless digital experience for customers. New features launched on its QIB Mobile app help customers complete all their banking from home, including payments, other transactions and tax declarations.

The bank also launched QIB Corporate, an app designed for corporate and SME customers. Users can access a liquidity management tool and a feature to manage funds between accounts to meet payment obligations. Qatar Stock Exchange-listed clients can review dividend payment status online.

In February, QIB became the first Qatari bank to launch a P2P local payments option, enabling instant transfers via mobile numbers, eliminating the need for international bank account numbers.

It also launched a contactless credit card for consumers and introduced Remote Deposit Cheque (RDC), which enables corporate clients to deposit bulk checks without bringing them physically to a branch.

Soon after Covid-19 struck, Rockland Trust Company’s executive leadership team began meeting daily, with a focus on employee safety and operational stability. High on the agenda was the legal, regulatory and accounting and finance challenges associated with implementing government programs to help businesses.

On top of their customary responsibilities, 436 of Rockland Trust’s employees mobilized to process over 13,000 PPP businesses loans. These helped 6,200 businesses in Massachusetts and Rhode Island while the bank hosted more than 7,000 participants on webinars and fielded over 2,000 questions about PPP loan forgiveness.

“The funding we provided has been used to increase access to vital programs, pivot programming and services from in-person to virtual, and to continue to employ staff during periods of uncertainty,” says CEO Christopher Oddleifson. To help bolster local economies, Rockland Trust has also given $80,000 to small businesses demonstrating a positive impact on their community and supported 54 local small businesses with digital billboard advertising.

Responding to the Covid-19-period mandate for isolation, Saudi-based Samba Financial reengineered processes and modernized operations. It also introduced new products designed to enable more flexible banking, such as mobile-based soft tokens with two-factor authentication that are delivered through email.

Samba’s Islamic Banking Division has automated some operational aspects of murabaha transactions, in which the bank purchases commodities on behalf of a customer that can’t finance the purchase directly, sharing the risk of ownership. Samba obtained Shariah dispensation to sign on behalf of customers, so they would not need to go its offices.

The bank has also streamlined processes for buying and selling commodities on international markets, allowing Samba to act on their behalf to reduce paperwork and processing time. Trade finance is also affected by closed borders and lockdowns, so Samba moved from paper-heavy processes to email communications and callbacks with recorded landlines, transaction checklists and quality-control staff monitoring.

TDB Group, parent of Kenya’s Trade and Development Bank, provides development finance for Eastern and Southern Africa and has worked to scale up efforts to fight Covid-19 in this region. As the pandemic started, TDB mitigated the health and economic shocks by ensuring business continuity and repositioning itself to strongly respond to the pandemic.

To ensure liquidity for corporate finance and short- and long-term trade, TDB designed and implemented solutions for its sovereign and corporate clients to keep their developmental objectives on track.

The bank also leveraged blockchain technology to facilitate access to trade finance and counter any disruptions to supply chains and it has completed end-to-end trade finance transactions using this technology. Executives credit blockchain with several advantages over paper-heavy processes, including speed of transaction and cost efficiencies.

Selection was limited to entities that submitted entries. After an initial review by a panel of three independent judges, those whose efforts were on par with peers (rather than above the average) were eliminated. The remaining entrants were evaluated, scored in each category and ranked separately by each of the judges as well as two Global Finance editors. Scoring took into consideration local conditions and the capacity of the entrant, and awarded points for speed, innovation and cross-border reach.