Moscow. September 19. The life of Russian national commercial Bank (MCB) for the last two years full of events: it became the largest Bank of the Crimea, fell under the sanctions and received shareholder-the state. On the growth plans of the credit portfolio, starting a new business and financial restructuring Krayinvestbank said in an interview with the head of the Board of Directors RNCB Mikhail Yakunin.
– Tell us how RNCB live in conditions of sanctions.
– We are successfully working in Russia with clients from Russia, emitiram payment card exclusively national payment systems, are actively developing services payments and transfers in national currency including in remote channels. We Finance most of the key enterprises of the Crimea is and airport in Simferopol, and factories for the production of wines and brandies, and the company implementing important social projects in the region, including on repair of roads and water supply of the Crimean people. It should be noted that all customers of the Bank operating on the territory of Crimea, it has refocused its business processes to work with domestic counterparts, so the demand for banking services in foreign currency is virtually absent.
However, sanctions always in the way. How do you provide funding?
– We have a good position on the funding, MCB – Bank with 100% state participation, trust us, both physical and legal persons. We now have the accounts placed about 33 billion rubles of means of the population and about 19 billion rubles in funds of companies.
– To diversify the structure of liabilities did not plan?
In my opinion, the most sustainable business when the Bank funds itself through its own resources. Therefore, at present about this question.
– When business relies on customers ‘ funds, it is also not always a good thing…
– If need be, we can always turn to the Central Bank, to pledge assets and get funding.
– You now need refinancing operations with the Central Bank?
– We have no need for it.
But because of the sanctions you can’t issue bonds…
– And we don’t need to. When you have a large amount of borrowing, or otherwise vulnerable. As for individuals, we have a total of more than a million customers with a positive balance of accounts, it is a stable base. In addition, we have opened accounts with about 50 thousand legal entities. We serve most of the residents, representatives of small and medium-sized businesses. Our primary mission is to provide a full range of affordable banking products.
– What are your plans to increase the Deposit base?
We are gradually growing. At year-end, corporate and business dynamics will remain stable, according to the retail plan to show an increase of over 30%.
– The market of Crimea is limited to whether there is growth potential from the point of view of attraction of means of physical persons?
– In General, we now occupy about 50% of the Deposit base in the Crimea. If necessary, we have room to grow. For example, the RNCB, on behalf of the DIA has provided the payment of insurance compensation to depositors of the banks, which the Central Bank revoked the license. With more than a third of investors immediately opened deposits in the MCB. In addition, we are licensed banks operating across the country. Therefore, in my opinion, it is possible in the future to talk about possible work in other regions.
– What are your plans to expand activities in other regions?
We are now working long-term development strategy, which will largely depend on the format and timing of the recapitalization of the Bank. Currently, there is detailed elaboration of the strategy, when completed, adopted and approved, then we are ready to tell.
– When the strategy will be approved by the Board of Directors?
– It also depends on the format and timing of the recapitalization of the Bank. However, we hope to complete the work no later than the second quarter of 2017.
– Amount of the capital increase in the amount of 21 billion rubles for three years to date?
– Now there is a workflow, relative to the numbers that called you, we have a clear plan of how to develop business with such capital, but as long as the shareholder does not approve, it is too early to say.
The capital you need for growth. This year plan on how to increase lending?
– If to speak about the retail business by the end of 2016, the loan portfolio should increase by more than half compared to last year. The increase is expected mainly due to mortgage lending, to us for advice on buying a home with mortgage programs of up to 700 clients per month. As for the segment of large and medium-sized businesses, are planning to increase the portfolio by about two times, the portfolio of small business – about three. We expect that income will grow by 50%, while costs are rising significantly less. The Bank for the first half of 2016, relative to the first half of 2015 will come out. Last year was a loss of 500 million rubles, now earned about 200 million rubles. At the end of the year we plan to show a profit of about 300 million rubles. The cost of risk is expected this year at 3.5%.
– The reserves formed this year under the new loans or old problems?
– Reserves are established under the current loan portfolio, while the portfolio quality is very good too.
– In the Crimea there are quality borrowers, which you are willing to lend?
– Of course. Here is a good base of individuals – we serve about 90% of the total economically active population of the Peninsula. The level of overdue loans in the retail portfolio of the Bank to date is minimal, indicating that we have chosen customer segments for credit. Currently, credits in MCB can obtain a salary card holders, pensioners, employees of state and law enforcement agencies. As for business, the period of formation and adaptation to new conditions has already passed, and now the Crimean entrepreneurs will actively develop your business. Over the next two years we expect growth of demand for lending in small and medium-sized businesses.
In addition, we are seeing great interest in our credit products from large borrowers, including because in the Crimea will be implemented a number of projects of Federal significance.
– Can you name a major company in the Crimea, for which you become a payroll Bank?
– We have a number of payroll projects, more than 8 thousand leading companies in the region – both public and commercial, presenting different spheres of activity, including the wine industry. This is one of the key sectors in Crimea, moreover, from the point of view of the quality of land, according to some estimates, this is the best land in Russia for viticulture.
– You have big plans to increase the mortgage portfolio. How easy it would be to do given the fact that a lot of outstanding matters related to the registration of property rights?
– In MCB in two years accumulated experience in the framework of secondary market transactions of the Crimea. The Bank concluded more than 600 such deals, and at the moment no court proceedings to challenge the right of ownership. Insurance companies with which we cooperate, take on the insurance risk of loss title to the object purchased in the mortgage RNCB, while additional verification of the history of the object and the “purity” of transactions. Therefore, the purchase of real estate mortgage is more secure than a conventional transaction – deal with a mortgage is checked by experienced personnel, with the object insured.
– The people of Crimea take a mortgage to buy a property in this region?
– Yes, of course. About half of the customers who take out loans to buy housing in the Crimea, – the inhabitants of the Peninsula.
– And the potential of the building you assessed?
The potential is huge. We conducted research and found that the need of the Crimea in new residential areas is about 22 million square meters. Even if you do the calculations at the rate of 50 thousand roubles for square metre it turns out that the amount required to meet this need is no less than a trillion rubles. We hope that will be rebuilt most of the old housing and built new housing, including apartments. We are seeing a large demand from customers from the mainland and offer them various options of mortgage programs, including the mortgage with state support.
– If the borrower buys an apartment and information about it are in the registry in the Ukraine, how do you solve this conflict?
– We use only Russian registry.
And had no problems?
– Of course, on the Peninsula there are objects which can be any claims of third parties. However, we are specialists in the field of mortgage lending and if the Bank decides to grant a mortgage loan, this means that possible risks are minimized.
Next year, what are your plans to increase the mortgage portfolio?
– This year we plan to increase the mortgage portfolio tripled to 2.2 billion rubles by the end of 2016. Our goal is to maintain this trend and by the end of 2017 to increase the volume of the loan portfolio significantly. In the future, the dynamics of growth may vary, it is necessary to solve a number of issues related to the application of 214-FZ”On participation in shared construction of apartment buildings…”). But our goal is to remain a major player in the mortgage market in the region.
– If to speak about corporate business, called a few major infrastructure projects on the territory of Crimea, which was planned to sell on credit RNCB. In what stage the issuance of funds for the construction of power plants in the Crimea?
– It is too early to comment on it. We have many projects in the works, and they speak better when everything is signed and issued.
– But the Minister of energy said that MCB China will Finance this project.
– For this project we are already working with contractors, provide them with guarantees and other products.
– What is the volume of the assurances you gave them?
In this project we work with a number of contractors, the total amount of issued guarantees is about 5 billion rubles.
For this project, the Bank has a capital?
– We can do it.
– Is the financing of other projects will depend on how much money you give?
Deal deal alike, there are many other parameters in addition to capital. We are ready to examine every particular transaction, to see how it is structured.
– The Bank needs to invest in the IT infrastructure. You can estimate how much money you will need for this purpose?
– When ready the long-term development strategy, we will place the full amount. Next year we plan to invest 250 million rubles. But in General the figures will be significantly more, we plan to build a high-tech Bank.
– A branch?
– We have the largest network of branches in the Crimea, we will work on rebranding, to bring offices to a single standard. In addition to investing in the network, we understand the need to provide quality services through telesales. We launched a new Internet Bank, have already applied to the input biometrics. Surprisingly, modern technology, especially with a very friendly interface, even seniors are embracing an order of magnitude faster than a computer. Internet-banking and self-service terminals every day, our customers make about 55 thousand payments for the sum more than 100 million rubles.
– And you are using a foreign technology or Russian?
– We are actively working with Russian companies, most of our suppliers are Russian companies.
For remaining foreign technologies did not find analogues in our market or just have not had time to replace them with Russian products?
We are now actively working in this area, study what is on the market, and implement their own solutions. The basic system of the Bank is completely based on Russian design, we have all the key system developed in Russia. The issue is not something that is solved completely, but largely closed. And we will continue to work, especially since there are a lot of interesting developments. There are quite unique items that open up new opportunities for business development.
– On how many percent you have already switched to Russian technology? Is it possible to move the opportunity to 100%?
– If I say I switched to 100% will probably not quite match reality. It is clear that hypothetically there is always something better, impossible all the best to release in the same country.
– It is impossible, but in principle in a normal situation it’s okay when you buy overseas technology. But MCB is under sanctions, and not the fact that it will sell.
– This is why we invest in domestic producers.
– You have not answered the question. Then there are problems with the purchase of foreign technology, you now do not feel?
We do not purchase.
– You work on what’s left? Or buys someone else for you?
– You ask the questions that I’m not ready to answer.
– The Bank needs to convert 180 offices. Is there a cost estimate?
– We need more than 150 million rubles. Some offices were opened in haste, so we need to upgrade and bring everything to a single style to the client coming into any branch, received the same level of service.
– What about the ATMs you purchase Russian companies or foreign?
– We have the largest network of ATMs on the Peninsula – over 700 devices, so we now buy mainly the terminal from Russian producers.
– The main project of import substitution in the banking sector – the payment system “World”. How is the cooperation with the NPS, what are your plans for the issue of cards for the next year?
– We were one of the first banks who issued the card payment system, now MCB has released 400 thousand cards. Until the end of the year will be issued 500 thousand, and by the end of next year – more than one million cards. Currently, we are leaders in card issuance “Peace” not only in Crimea but in Russia as a whole and hope that this trend will continue until the end of the year.
– Any special projects with the “World” you are planning?
– We have now launched a credit card “the World” and actively building up the portfolio. At year end the credit card portfolio should be around 350 million.
– And that was the beginning of the year?
– It actually was not a credit card “the World” we launched in may of this year. Was consumer loans.
– You are considering to expand the MCB group and start a pension Fund and insurance company. How realistic are these plans?
“Our goal is to provide clients with a full range of quality financial services, so of course we see niches. Including do not exclude that we will provide these services. But first and foremost, we plan to launch leasing and factoring. It is quite understandable, familiar to the customers, which in the Crimea there is a serious demand. This requires some financial investment, organizational issues, however, we expect to expand our range of services.
– You have someone to buy or create a leasing and factoring company from scratch?
– To create something new is much easier than to rebuild the old one.
– In terms of what you want to create a company?
– I think within a year, even less. This is a fairly unique business, you need to build the right processes, and negotiate with clients and partners and to make a quality product.
– Are you planning the purchase transaction, other banks may be operating in the country?
We are present in almost all large towns and even small, therefore, from the point of view of the network and customer base, we are quite self-sufficient. But to say “no” we will not, the question conditions. If you have any interesting suggestions, will consider them.
Is there a problem?
– While no specific agreements.
– Tell, how is the readjustment Krayinvestbank.
– Krayinvestbank in the midst of choosing the nursing home came under the sanctions. And this is partly the reason for the fact that the turnaround was chosen RNCB. It is clear that it took some time to understand what this asset and to agree on the quality and quantity of funding that you want for this object. You know, rehabilitation implies a return of allocated funds.
– That is 18 billion roubles does not suit you, you want more?
– We are discussing this issue with stakeholders.
– What do you see as the problems in Krayinvestbank now?
– He has a specific set of assets which is the coordination of fair value.
And when you expect to close the issue of harmonization?
– Once we reach all agreements.
– And with whom you agree?
The question of rehabilitation is engaged in ASV, there is the usual workflow.
– Why MCB in may bought an additional issue Krayinvestbank?
– Because it was not completed the approval process the fair value of the assets Krayinvestbank.
– So you are ready to redeem additional shares only when you agree on the full amount of money for the rehabilitation? Only in this case?
– I think if you offer to buy for 100 rubles that is minus a billion, you probably still think, because in this case you will undertake at its own expense a billion close.
– And how, in your view, you need to reorganize to stay in minus a billion?
– We are discussing it.
But some estimates do you have? Was the sum of 30 billion rubles.
– I am not prepared to argue, is the negotiation process. We will complete this process and then talk.
Up to the end of the year, complete all the corporate procedures?
– The process goes on, the interim administration in the Bank works. No rush in this.
– But if you do not agree, will abandon rehabilitation?
– I think we agree. We say that every asset has its price.
And if you say, “We gave you 18 billion roubles, here and live with them.” What will you do?
– We will negotiate and make a decision. We are working on sanitation, the only question is to confirm the actual cost of the assets.