Kapital Bank celebrates its 150th anniversary, marking a significant milestone that highlights the bank’s rich history, continuous growth, and modern-day projects. We discuss the recent successes and future goals of the country’s first bank, with Farid Huseynov, Chairman of the Board.

Mentioning "150 years” itself indicates that the bank has a successful history and experience. It requires the right strategy and teamwork to maintain the title of the country’s first bank for 150 years. What is your key to success ?

Being the first bank in a rapidly growing and developing country and maintaining customer trust over time requires great effort and motivation. Our biggest strategy and success formula at Kapital Bank is prioritizing customer-centric service.

Since the founding of the first savings bank in 1874, which we are the legal successor of, our bank has initiated significant projects. These projects serve not only the financial sector but also the overall welfare of our society. We continuously strive to understand our customers’ needs and demands, offering them the right solutions while adhering to the principles of accountability and transparency to achieve sustainable development. We remain at the forefront of the financial sector through correct technological investments and the implementation of fintech solutions.

As you know, we concluded the first half of 2024 with a net profit of 123.9 million manats, and our assets have exceeded 10 billion manats. I would like to emphasize that a significant part of our income has been returned to our customers as bonuses within the loyalty program. Since last year, these bonuses (cashback, miles, double VAT) have totaled 141 million manats. These investments are designed to ensure a more sustainable future inline with our strategic approach. Today, I can confidently say that at Kapital Bank, we pave the way for future innovations with 150 years of experience. 

 

Speaking of digitalization, Kapital Bank is one of the first banks to popularize digitalization in our country. What technological innovations are you implementing, and how do these digital technologies affect your banking services?

Yes, indeed, as a part of an ecosystem, we have achieved many firsts at every stage of our history and continue to develop and improve our services. Models built on various technologies play a significant role in achieving fast and effective results in different directions, and artificial intelligence is applied in many of these models.

We implement technological innovations such as facial recognition, segmentation, pre-approval of loans, risk management models, and converting customer inquiries from voice to text and vice versa. For instance, obtaining a loan entirely online or placing a deposit without visiting a branch are examples of this. I would also like to highlight our analytical models, where we analyze big data to optimize products and campaigns and better understand our customers’ needs.

The most important value that digital technologies have brought us is enabling our customers to receive services effectively without visiting branches. This also helps minimize the use of paper documents and supports preventing environmental pollution. For example, thanks to electronic documentation during banking transactions last year, we saved nearly 8 million A4 papers, equivalent to 800 trees being preserved.

We must also emphasize our support and contributions to entrepreneurship and business development. A significant part of our customer portfolio consists of SME and corporate clients. In this direction, our Birbank Biznes mobile app adds value and service to the business environment, especially small and medium-sized enterprises. By making significant investments in this direction, we create opportunities for SMEs to access their accounts and perform various financial transactions anytime and anywhere.

Proudly, as a result of all these digitalization initiatives, we are awarded numerous international awards annually in various categories. Being awarded the "Best Use of AI in Digital Transformation” by Global Finance magazine and Birbank’s mobile app being ranked 1st in the "2024 Azerbaijan Mobile Banking Ranking” by Markswebb consulting and research company is the best proof of this.

Of course, behind all the successes we discussed is a strong team motivation and the efforts of the large Kapital Bank family. Being the number one bank today and continuing to offer innovative solutions to our customers in the future requires being a part of sustainable development. I can confidently say that at Kapital Bank, we pave the way for future innovations with 150 years of experience.

Kapital Bank also undertakes significant work in the field of corporate social responsibility. What are the bank’s future plans regarding sustainability and environmental responsibility?

The direction of corporate social responsibility is one of our main priorities. The Red Hearts Foundation, created with the direct support of Kapital Bank, plays a significant role in these areas.

The Red Hearts Foundation supports three different directions: society, the environment, and animals, creating positive impacts in environmental and social areas. Last year alone, within the framework of the "Vətən bağı” project, nearly 1,000 trees were planted in 5 regions, including Lerik, Dashkasan, Agstafa, Gazakh, and Shabran. Through the "Təmiz mühit, Təmiz gələcək” campaign, 15 hectares of land were cleared of more than 4 tons of waste. The "Kitabgəzər Kitabxanası” project donated nearly 3,000 books to 55 rural schools in 29 districts and cities of our country. Through the "Batareyaları təhvil ver, təbiəti qoru” project, nearly 780 kg of batteries were collected and handed over to the Ministry of Ecology and Natural Resources. Educational scholarship programs, initiatives for the protection of animals, and other social projects are also part of the foundation’s activities.

The financing of green projects, significant discounts on eco-friendly car loans, efficient use of eco-resources, and implementation of projects aimed at reducing waste are among Kapital Bank’s main strategic directions. One of the key outcomes of these projects in 2023 was the increase in digital transactions, an approach that helps Kapital Bank contribute to both environmental protection and social welfare.

I would also like to highlight initiatives for the development of science and education. Within the framework of our cooperation with the Ministry of Education, we are one of the main partners of the National Subject Olympiads.

Regarding the second part of your question, Kapital Bank’s 2024-2026 strategic plan is already prepared, and ESG (environmental, social, and governance) is one of our main strategic directions. At Kapital Bank, we consider sustainability as an integral part of our strategic goals. In line with the roadmap prepared by the Central Bank and the new strategy, we have many initiatives, and these are reflected in our 2024-2026 development strategy. First of all, I would like to emphasize our projects in the "Sustainable Finance Initiatives” and "Digital Finance Initiatives” directions. We have been taking steps to increase financial inclusion through the development of digital financial solutions and the promotion of innovations since 2021, and we are receiving positive impacts from our initiatives to date.

As our ESG activities expand, the responsibilities of our leaders and employees in this direction continue to grow. This includes commitments to the ecological nature of office supplies, optimization of energy use, and aiming for further development in these areas.

As a result, by placing ESG principles at the center of our strategic planning and activities, we ensure that both our leadership and employees take more initiatives in this direction.

Mr. Huseynov, you mentioned that there is a team spirit behind all your great successes. As we know, your bank has over 5 000 employees. How do you ensure their motivation and productivity?

I can answer this question by mentioning that we have been awarded the "Great Place to Work” certification by the international research and consulting company for the last two years. What makes this award even more valuable is that it is based on the feedback of our employees and confirms the quality of our corporate culture and work environment.

We offer continuous training and development programs to support the professional and personal development of our employees. Additionally, through special educational scholarship programs, the education expenses of several of our employees are covered by the bank.

Our primary commitment is to create the right work environment for our employees, who elevate us to the top in customer-centric service, and to keep them constantly motivated.

How do you predict future economic trends will affect Kapital Bank, and what steps are being taken to prepare for these changes?

Future economic trends, especially digitalization, regulatory changes, and economic fluctuations, can certainly impact us as well, but as I mentioned earlier, both the roadmap prepared by the Central Bank of Azerbaijan Republic and the country’s future economic development plan prepare us more for the future. To prepare for these changes, Kapital Bank is taking several important steps. First of all, we are making significant investments in technology to expand our digital services, which is crucial to maintaining the bank’s competitiveness and providing better services to our customers.

I can also mention the improvements in risk management. By using risk assessment tools and methodologies within the regulations, our bank can better manage potential risks. This is essential to ensure the financial stability of the bank and increase its resilience to economic fluctuations.

Our bank also focuses on various sources of income. By diversifying product ranges and introducing new financial products, we reduce reliance on traditional banking services. This approach ensures the bank is more resilient to economic changes and offers a broader spectrum of services to its customers.

Finally, what would you like to say to young people who want to build a career in the banking sector and your customers?

My advice to young people, especially our future colleagues, is to remain open to learning and innovation. The financial sector is rapidly changing and evolving. To succeed, you must develop your adaptability, closely follow technological innovations, and create solutions that can simultaneously address various needs. Leadership is not just about managing a team but also about inspiring, motivating, and achieving success together. At Kapital Bank, we constantly support young talents and create the necessary conditions for their development.