Integrated Report 2020

Product offer for the Agro subsegment

BNP Paribas Bank Polska has a comprehensive offer for the food and agro segment, including accounts, deposits, loans and farmers insurance (both voluntary and obligatory).

As regards loans, the Bank offers a wide variety of working capital and investment loans to farmers and Agro enterprises. Such products as the Agro Ekspres overdrafts collateralised with mortgage, and the Agro Progres investment loan for financing agricultural holdings as well as preferential loans. Preferential loans are mostly utilised for the purchase of agricultural land, for the construction and modernisation of buildings, as well as the purchase of machinery and equipment and the establishment of perennial crops. This offer is dedicated not only to farmers, but also to companies from the agri-food processing sector.

Apart from its own offering, the Bank provides additional services addressed to farmers, developed in cooperation with third parties.

In 2020, the Bank sold obligatory crop insurance under the Agreement with Concordia Polska Towarzystwo Ubezpieczeń S.A. amounting to PLN 27.1 million, which means a decrease by 15% compared to the previous year. The weaker result in 2020 was mainly due to reduced sales in the autumn season, resulting from a reduction in the budget for crop insurance subsidies. In 2020, the premium subsidy for farmers from the state budget amounted to 65% of the premium.

In connection with the merger of Concordia Polska TU S.A. with Generali Group, at the end of December 2020 an agreement was signed between the Bank and Concordia/Generali, guaranteeing further development of cooperation in terms of insurance offered by the Bank.

Pursuant to the agreement concluded between BNP Paribas Bank Polska and Bank Gospodarstwa Krajowego (BGK), the offer for farmers and Customers of the Agro segment (agri-food processors) was extended by a new form of collateral – a guarantee granted by BGK from the Agricultural Guarantee Fund (FGR), which is completely cost-free for the Customer.

The guarantee will apply to the investment loan granted to farmers in the form of the Agro Progres product, an investment loan granted to Agro Customers and a non-revolving working capital loan linked to the investment made by these Customers.

Benefits of new collateral for the Customer:

  • can be the sole collateral for: an investment loan intended e.g. for the purchase and installation of photovoltaic sets or the financing of irrigation installations on farms, or a working capital loan to finance the first production cycle, as well as loans of up to PLN 250,000 for micro-farmers and PLN 300,000 for farmers and companies from the SME and corporate banking segments;
  • in circumstances where the FGR guarantee provides additional security for the repayment of a loan, an extension of the duration of the loan or a lower own contribution;
  • the possibility of applying an interest rate subsidy to loans secured by a FGR guarantee. This solution has been implemented in the Bank for revolving and non-revolving working capital loans for farmers and agri-food processors intended to finance current operations. In the first year from disbursement, BGK finances part of the interest (the surcharge is no more than 2% of the loan amount). The maximum loan amount is EUR 200 thousand in PLN;
  • lower margin than in commercial financing.

BNP Paribas Bank Polska actively undertakes initiatives supporting sustainable development and protection of natural resources, therefore it has established cooperation with the European Investment Bank (EIB) with respect to the use of PF4EE (Private Financing for Energy Efficiency). According to this agreement, the Bank may offer Customers, including farmers, financing of photovoltaic installations on attractive terms.

The benefits of the cooperation are: no commission on the EIB guarantee, no own contribution required, interest rate reduced by 0.20 p.p. compared to the annual interest rate the Bank would charge on this loan without EIB financial support.

In October 2020, the Agency for Restructuring and Modernization of Agriculture (ARiMR) launched a line of investment loans with partial repayment of capital for the purchase of agricultural land by young farmers, i.e. persons who are under 40 years of age on the date of application for the loan, have professional qualifications in agriculture, or will commit to complete them within three years of signing the loan agreement. The product is dedicated to farmers who are beginning their agricultural activity or who have been running their farms for no longer than 24 months.

The ARIMR applies aid to loans up to a maximum of EUR 20,000 and no more than 60% of the loan granted, payable in two instalments: 80% of the aid immediately after realization of the investment, and 20% after 5 years from the date of granting the loan. The loan may not exceed PLN 5 million, own contribution – minimum 10%, interest rate – commercial, commission – up to 2% of the loan amount.

In 2020, members of Agro Expert Teams engaged in a number of pro-sales tasks and tasks aimed to improve the quality of the existing portfolio. They held 600 meetings with current and potential Customers of the Bank, over 380 expert opinions were prepared for new transactions and as part of reviews of the functioning Agro portfolio (verification of the condition of farms and recommendations as to optimal paths of cooperation).

Special tasks necessary to make decisions in a crisis situation in the Agro segment were executed, including:

  • preparation of materials on the current and prospective impact of the COVID-19 epidemic on the Agro sector and consumers of this sector; preparation of an expert ranking of the condition of selected types of Agro production in the context of the threat posed to the market by COVID-19, in order to indicate potentially safe (or not recommended) directions of financing in the SME segment,
  • monitoring and reporting of the hydrological situation in the country – determining the causes and current effects of water shortage on crops, forecasting crops in 2020 and its impact on the portfolio of Agro Customers,
  • periodical reports on the current weather situation and its impact on the schedule of field works, harvest and preparation for the next season, as well as forecasts of demand for financing; a report on the systemic review of greenhouse producers (the entire portfolio of SME Clients above PLN 1 million),
  • analysis of the situation of the Bank’s Customers in the context of rising feed prices and the outbreak of avian influenza (HPAI),
  • Participation in meetings and webinars on sustainable agriculture,
  • Participation in the organization of the 15th Agroconference – Food & Agro Conference 2020.

As part of activities in the area of risk management, the following have been developed:

  • support tools for Customer assessment within the improvement of the industry matrix, using benchmarks and vectors determining advantages and weaknesses affecting business profitability for poultry producers (to be used in credit assessment),
  • the principles of the review for all poultry producers (over 850 credit Customers in the portfolio with assigned to PKD 01.47.Z).

As part of the ongoing work for the Sales Network, following guidelines have been prepared: 1. concerning the use of information databases on potential Customers and 2. for advisors in the field of matching credit products depending on the type and needs to the Customer as well as the unified rules of using external documents in the credit process in the Microenterprises segment.

From 15 January to 31 May 2020, the annual Agro Offensive sales campaign – this year under the motto „Financing increases the role” („Finansowanie zwiększa rolę”) – dedicated to Agro farmers and entrepreneurs was conducted. The campaign was dedicated to both Micro-enterprises and SME Customers. The goal of the campaign was to attract new Customers and increase the sales of loan and leasing products in the segment.

The special offer concerned the following loans: Agro Ekspres, Agro Rzeczówka light, Unia+ and Preferential catastrophe loan K02 Line. A special offer for new Clients has been prepared for a current account under the Konto Otwarte na Agrobiznes account – PLN 0 fee, effective for 6 months from the date of signing the agreement. Within the cooperation with BNP Paribas Leasing Solutions, attractive price terms and conditions for a lease and leasing loan were offered.

This year’s Agro Offensive was supported by dedicated marketing materials, a campaign in traditional media (e.g. newspapers, ATMs) as well as online and in social media.

Agronomist is a comprehensive and modern internet portal created with the cooperation and for the needs of entities from the agri-food sector. It is a unique platform in the agri-food sector which gathers in one place sector knowledge and provides access to a wide range of professional IT tools useful for farmers and processing companies. Every day it provides several thousand registered users with information on the situation in the agri-food sector, both on a local and global level.

In 2020, new functionality was implemented that is unique in the marketplace while meeting the needs of the Customers:

  • section „Green Changes” – a series of expert articles on sustainable development issues, including climate protection, renewable energy sources and corporate social responsibility,
  • a section for women „Agro na Obcasach” – strengthening the educational function of the portal in the area of female entrepreneurship in rural areas,
  • a tool for comparing prices on marketplaces and buying stations,
  • organic nitrogen production and consumption calculator,
  • agricultural real estate module issued by the Bank’s Customers.

At the end of December 2020, there were 3,700 registered users on the platform, and in 2020 over 397 thausand entries were recorded.

  • the possibility of using credit moratoria:
    • for non-renewable products, deferral of repayment for a maximum of 6 months – for capital instalments and 3 months – for interest and capital payments,
    • for renewable products (overdraft, credit card) – renewal in a simplified procedure for up to 6 months,
  • simplifying the credit process and the credit application;
  • simplified rules of signing credit documentation – possibility to remotely apply for a deferral of repayment via the Internet form available on the Bank’s website, without any additional fees and without the need to provide additional documents;
  • replacing information obtained during visits to Customers' farms with data gathered via telephone conversations.

In October 2020, BNP Paribas Bank Polska S.A. joined the Cool Farm Alliance, an international business and science consortium that produces metric tools for estimating GHG emissions from agricultural production.

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