To Avoid the Watch List a Client Should Come to an Understanding with a Bank

Sharp ups-and-downs on the currency market make banks’ borrowers wax indignant. And that is quite reasonable, since in view of the soared USD exchange rate they have to pay almost doubled installments on their loans. Sergiy Naumov, Chairman of the Management Board of JSCIB “UkrSibbank”, shares his views on what is the best way to survive and preserve previous relationships with the bank.

- What should UkrSibbank clients do if they faced some difficulties with loan repayment?

- First of all, they should notify the bank on the difficulties with their loan repayment in time. We are interested in having the loan repaid and not in repossessing collateral. That’s why, reaching a compromise is the best strategy both for the bank and a client.

- And what does the compromise imply?

- Actually, it implies debt restructuring, i.e. restructuring terms (e.g. prolongation of loan agreement) or monthly installments (transferring payment schedule to annuity or paying interest only without principal).

Certainly, in order to decrease interest burden we recommend to repay principal as soon as possible. This will result in debt burden decline, thus making the borrower less dependant on exchange rate fluctuations, if the loan is foreign currency denominated.

- What are the advantages of debt restructuring for a client?

- Using various options installments can be reduced by 30-40% in amount and even reach UAH equivalent as effective long before crisis fluctuations.

If we take repayment term prolongation, in case of it being doubled, monthly installment will be decreased by 20-25%. I would rather say this program is similar to annuity payment. In this case loan installments can be sliced almost in half.

- Could you please describe how UkrSibbank negotiates with an “in-trouble” client?

- We build up relationships with our clients on a partnership basis. And it is very important for us to preserve this partnership in future. We account for each our client and this is the very secret of our success on the market.

Certainly, UkrSibbank is interested that the borrowers repay their debts on loans. That’s why, we currently make steps forward to our clients and do everything we can to help people repay their loans despite financial difficulties.

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