The Bank continues to improve its performance by offering a wide range of cutting-edge banking services to small, medium and large-sized enterprises, taking into account each client group’s particular requirements and interests.
To date, Bank Saint Petersburg has 50 000 corporate customers. The Bank’s corporate banking business remains primarily focused on the regional market of St. Petersburg. In addition, the Bank strengthened its positions in Kaliningrad in 2015 through the creation of its Evropeisky Branch, which currently has over 4 000 corporate customers (Bank Saint Petersburg completed the integration of Bank Evropeisky in Kaliningrad, reorganizing it together with the Bank's Kaliningrad Branch into the new Evropeisky Branch). In 2016, Bank Saint Petersburg also strengthened its presence outside the home Northwest Region: the Bank opened a representative office in Novosibirsk, focused on working with corporate clients.
Loans to legal entities represent 78.8% of the total loan portfolio. The breakdown of the Bank’s corporate portfolio by sector reflects St. Petersburg’s economic structure, which has a high proportion of construction, real estate, trade and production, allowing the Bank to benefit from all the advantages of the region’s economic structure, as well as to contribute to its development.
One of the strategic priorities of the Bank’s deposit business is to gradually transfer conclusion of deposit agreements to digital channels. This substantially reduces the workload of branch network employees who will be able to focus instead on individually tailored deposits and devote more time to other products for corporate customers. More than 80% of deposits in the standard range are already placed through Internet Bank i2B. One of the Bank’s strategic goals is an increase in share of online deposits as well as full transfer of all standard range deposits (placed on standard terms and conditions) to Internet Bank i2B.
Bank Saint Petersburg is striving to become the main clearing bank for residents and enterprises in St. Petersburg that are engaged in payments and settlements with customers and suppliers.
The Bank issues Visa Business and MasterCard Business corporate cards to be used by company employees to cover their travel expenses and current expenses related to the company’s business. Payments for products and services can also be made online. The corporate card is a universal and safe tool for accessing company funds round-the-clock without the need to visit the Bank’s office: payments for goods and services are carried out by one touch thanks to modern payment services, cash deposits can be made and withdrawn in 24/7/365 in a wide network of ATMs.
Starting from December 2017, Bank Saint Petersburg is issuing a new premium card product: Visa Platinum Business. It is the first corporate Visa Platinum card in the Russian market offering both the convenience of a company credit card and a selection of premium business services. Conceived as a means of payment for business travel and official entertainment expenses, the card furnishes a range of related services: international concierge services by Aspire Lifestyles, access to LoungeKey business lounges, assistance and advice during business trips, worldwide Visa discounts and exclusive offers.
Since 2017, the Bank’s corporate cards of MasterCard Business and Visa Business support modern payment technology with the help of mobile devices – services Apple Pay, Samsung Pay and Android Pay. The new premium corporate card Visa Platinum Business is also equipped with all advanced payment technologies. In addition, the opening of the corporate card account and the order of the first card became available in Internet Bank i2B.
As part of strengthening its card payment infrastructure, the Bank offers to its corporate customers merchant and e-commerce acquiring services, enabling legal entities and sole proprietors to accept bank card payments for their goods and services, with the added benefit of contactless payments reducing the time required to serve their customers.
In 2017, Bank Saint Petersburg started processing instant payments of its corporate customers through the Instant Electronic Bank Payments System of the Central Bank of Russia (BESP) which enables instant crediting of funds to the payee’s account. BESP money transfers are offered to the Bank’s corporate customers through Internet Bank i2B.
A new service offered to legal entities and sole proprietors through www.bspb.ru website is the possibility to pre-book an account number. After completing the online request form with brief company profile and contacts, the customer will be emailed the allocated account number and will be able to use it in business contracts. The account number will stay reserved for 30 days, during which time the customer must deliver to the Bank’s office the required document package and sign the bank account agreement.
The Bank’s corporate customers who already have an account can open additional accounts without visiting the Bank’s office. Such additional RUB or foreign currency accounts, as well as card accounts, are available through Internet Bank i2B.
One of the traditional advantages of Bank Saint Petersburg is its wide network of correspondent banks across the globe: in the USA, Germany, Austria, UK, Switzerland, Sweden, Denmark, Norway, Australia, Japan, China, Hong Kong, Belarus, and Lithuania. In 2017, the Bank started negotiations to open new accounts in France.
In spite of the stricter compliance requirements imposed by foreign banks, the Bank continues to support non-stop foreign currency settlements. The Bank has installed Sanctions Screening, a SWIFT solution allowing to screen all outgoing payments against the OFAC, EU, and other sanctions lists before they are send.
The Bank provides a wide range of banking services connected with cash transactions in the regional markets of both St. Petersburg and the Leningrad Region, including receipt collection, cash re-counting, the delivery of cash wages to clients, and loading ATMs and payment kiosks.
2017 was a milestone year for improving customer service quality and saw an adjustment in response parameters. The Bank’s cash collection teams made a total of 187 000 location visits, 143 000 of them to customers, 28 000 to service and replenish the Bank’s ATMs and payment kiosks, and 16 000 to the Bank’s branch network. The amount of cash transported and processed by the Bank in 2017 totalled RUB 511 bn.
To reach its strategic goals, Bank Saint Petersburg is striving to create a product range that matches the interests of its corporate clients as much as possible. Despite the challenging macroeconomic situation, the Bank continues to provide corporate lending to companies from various industry sectors and is strengthening its positions in this market segment. In addition to granting new loans, the Bank is also improving the terms of already existing loans, which indicates general financial sector recovery.
In 2017, within the RUB 15 bn credit limit allocated to TAIF Group for a 5-year period, the Bank granted a USD 200 mln loan for working capital purposes. TAIF Group is a major Russian group of companies which controls 96% of the chemical and petrochemical, as well as 50% of the oil and gas processing industries of Tatarstan.
In the reporting year, Bank Saint Petersburg set a RUB 6.5 bn credit limit for Trading House Perekrestok JSC, one of Russia’s leading retail chains and member of the X5 Retail Group.
In 2017, Bank Saint Petersburg and TransFin-M PJSC, one of the leading players in the Russian finance lease market, signed an agreement for two 4.5-year credit lines of RUB 700 mln and 600 mln respectively. The intended use of the first facility is to purchase quarry equipment which will subsequently be leased out to coal mining enterprises. Proceeds from the second loan will be used by TransFin-M to buy special-purpose equipment for future leases and to finance the company’s working capital. The total amount of loans provided by the Bank to TransFin-M over the entire period of their business relationship approximates RUB 5 bn.
The Bank and LSR Group entered into a Master Agreement, establishing the general terms of lending in the total amount of RUB 2 bn for 3 years, to fund the operations of the borrower and LSR Group companies. LSR is an all-segment real estate developer with projects ranging from mass-market housing to luxury properties designed by leading Russian and international architects.
Bank Saint Petersburg extended to Leader-Invest JSC a 2-year credit line of RUB 2 bn. The company will use the loan to finance its working capital and investment projects. Leader-Invest is a Moscow-based developer involved in residential and commercial real estate and integrated urban development projects. The total area of its properties is nearly 3 mln sq. m.
During the reporting year the Bank also allocated a 2-year credit facility of RUB 500 mln in graduated tranches to BSS company. The loan will fund various projects of the pharmaceutical group related to the opening of new branches and logistics hub development. BSS primarily specializes in wholesale pharmaceutical trade.
The Bank’s representative office in Novosibirsk is focusing on corporate customers operating in the Siberian and Far Eastern Federal Districts.
The Bank’s wider presence in Siberia is evidenced by new partnership projects started in 2017 with such market leaders as Kuzbasskaya Toplivnaya Company PJSC, Siberian Business Union JSC, Sibeco JSC, ELSIB Research and Production Association PJSC, Katren Research and Production Company JSC, as well as other leading enterprises of the Siberian Federal District.
The Bank’s wider presence in the Far East is evidenced by new loan agreements signed with such leading Far Eastern companies as Solntsevsky Coal Mine LLC and Boshnyakovsky Coal Mine LLC.
INVESTMENT BANKING SERVICES
In 2017, the Bank continued its active involvement in private equity and venture capital investments using structured in 2016 tools – Closed-End Mutual Investment Fund and Direct Investment Fund. The Bank started direct investments in the share capital of portfolio companies: it invested in seven early-cycle companies, two of which raised subsequent rounds of financing and increased their evaluation in the Bank's portfolio.
The Bank's investment policy in the reporting year characterized a greater focus on well-established, less risky businesses, suggesting a stable return on investment. Such investments are aimed at further development of portfolio companies and expansion of their presence in the markets. The investment focus of the Bank was primarily hi-tech companies in the field of IT services: a travel online service and a company providing logistics solutions. As the IT industry is now very dynamic, companies in the industry in the Bank's portfolio are currently raising new rounds of financing at higher level than the Bank's initial evaluation. Also, in the Bank’s portfolio there is a company of a classical children's retailer and an industrial player in the market of cargo handling.
The Bank is considering new opportunities regarding investment tools – developing a product such as combined financing (MBO / LBO). It will allow to follow the principle of one window for the Bank’s corporate customers.
One of the priority areas for Bank Saint Petersburg is to devise efficient solutions that allow its customers to expertly manage their currency, commodity, and interest rate risks while maintaining and increasing the profitability of their businesses. Our extensive product range of speculative and hedging strategies for various market segments enables the Bank’s clients to select a solution that aligns with their price/earnings rate.
The Bank is actively developing for its corporate customers a comprehensive platform for hedging their market risks while constantly broadening its product line. For instance, the Bank entered into several oil and coal price hedging transactions in 2017. Among other highlights was a commodity swap transaction executed with one of the leading coal mining companies of Russia to hedge the power-generating coal price. The Bank successfully competes with the world’s leading investment and brokerage companies in terms of quality and price of its services.
In addition, the Bank is expanding its liquidity management product line intended for its corporate clients. The comprehensive range of new liquidity raising and placement solutions improves the efficiency of the customers’ money market transactions and enables the Bank to achieve a higher level of service quality and client loyalty.
The year 2017 saw the first currency swap transactions with corporate customers, resulting in RUB and USD placements at above average market rates. Such transactions now became a regular feature with a consistently growing number of clients involved. By the end of the year, the Bank launched a new product: foreign exchange swaps intended to raise RUB liquidity with foreign currency pledged as security. This instrument is particularly popular among export companies and other entities holding foreign currency account balances.
PROGRAMS TARGETED AT SMALL AND MEDIUM ENTERPRISES
Loans to small and medium enterprises are strategically important for Bank Saint Petersburg and allow SMEs to finance their working capital, purchase equipment, vehicles, real estate and other property required to develop their business, as well as to start new lines of business.
To grant financing to small and medium-sized businesses on preferential terms, the Bank actively interacts with specialized organizations within the framework of state support programs, including with MSP Corporation. Within its Program for stimulating lending to small and medium-sized businesses (Program 6.5) Bank Saint Petersburg offers attractive loans to customers at a rate of up to 10.6% for small and medium-sized enterprises operating in priority sectors of the economy.
Under the Program 6.5 and with security provided by MSP Corporation, Bank Saint Petersburg opened a RUB 40 mln credit line to KUZNECHNOYE Trout Farm. The farm is located in the offshore zone of Lake Ladoga and specializes in aquaculture of rainbow trout, ciscoes and sturgeons. Another example of successful realization of the Program is the RUB 30 mln loan to PTK BIK LLC, one of the leading manufacturers of full-color cardboard packaging in the Northwestern Region. In total, under the Program 6.5 the Bank entered into loan agreements totalling RUB 1.2 bn in 2017.
Boasting extensive experience of providing loans to agricultural enterprises, in 2017 the Bank was granted the status of authorized bank for the purposes of the agroindustry concessional lending program: the Bank’s customers can now apply for loans with a 5% interest rate.
The volume of the Bank’s loans granted to SMEs in 2017 amounted to RUB 96 bn.
As part of government support programs for small and medium enterprises and efforts to increase availability of investment and other loans, the Bank actively participates in the three-tier National Guarantee System (NGS) for guarantor institutions, comprising MSP Corporation JSC, MSP Bank JSC, and regional guarantor institutions (RGI). NGS participants through their joint efforts provide important and efficient support to SMEs, issuing guarantees and sureties to secure their loan obligations.
Bank Saint Petersburg signed agreements with MSP Corporation, the Small and Medium Enterprises Credit Support Fund Non-Profit Microcredit Company (St. Petersburg), JSC Small and Medium Enterprises Support Agency, the Regional Microlender of the Leningrad Region and the Guarantee Fund of the Kaliningrad Region. In 2017, Bank Saint Petersburg entered into NGS framework cooperation agreement with MSP Bank JSC, allowing its customers to take advantage of the full range of support schemes offered through the National Guarantee System.
Also in cooperation with MSP Bank JSC, in 2017 the Bank joined a targeted project to promote the businesses’ awareness of the available state support through MSP Business Navigator web portal.
Furthermore, in working with small and medium enterprises the Bank focuses on offering its customers an ever-increasing range of related services: legal, accounting, insurance, etc.
FOR EXIM COMPANIES
The Bank continues to develop new services targeted at ExIm companies: starting from 2017, corporate customers can automatically send SWIFT МТ 940, МТ 941 and МТ 942 statement messages through Internet Bank i2B. Russian representative offices of foreign companies and other organizations founded by non-resident entities must regularly provide to them financial reports according to the established international reporting standards. Internet Bank i2b has an in-built functionality which, once enabled, will automatically send out such reports with the required (daily/monthly) frequency. Financial information is transmitted via protected SWIFT channels directly to the parent entity’s bank. Foreign bank's consent to receive such statements must be obtained to enable the service.
In 2017, many efforts were directed at developing and implementing projects and services targeted at ExIm companies. The ExIm Office page of Internet Bank i2B was enhanced by the following new services:
- transaction report directory: a service allowing not only to view any transaction report managed by the Bank, but also to view the balance of payments for each transaction online;
- credits by non-resident entities: a service allowing to monitor proceeds credited by foreign partners either in Russian rubles or foreign currencies;
- online request for the bank control record with the option of receiving it through Internet Bank i2B.
PayHD Customs Card, a new product introduced in April 2017, is the essential instrument for fast, easy and safe customs payments.
Increasing the customers’ ExIm business expertise remains one of the most important tasks in supporting cross-border trade. The range of events held in 2017 spanned a total of 11 webinars dedicated to various aspects of foreign trade, 2 business seminars under the common title ExIm Dialogues organized for the Bank’s customers, and an open conference Foreign Currency Contracts in the New Economic Environment featuring guest speakers from the Bank of Russia and customs authorities.
The number of new ExIm contracts serviced by the Bank grew by 10% in 2017.
TRADE FINANCE OPERATIONS
Bank Saint Petersburg offers its customers a wide range of high-quality services related to documentary operations and international trade finance. The Bank continues to maintain and strengthen its positions in this market segment by supporting and expanding the list of its foreign contractor banks.
In 2017, Bank Saint Petersburg became one of the approved banks under the government-sponsored Russian export support program, allowing the Bank to offer low-interest loans to the exporters of manufactured goods, agricultural products, services, and intellectual deliverables of the telecommunications, computer and information industries. For these purposes, Bank Saint Petersburg and Russian Export Center JSC entered into an Agreement concerning federal budget subsidies for interest rates on export loans. Low-interest loans are offered to the Russian exporters as accounts receivable financing as well as to foreign companies and/or their banks for purchasing Russian goods.
The portfolio of transactions with JSC EXIAR (insurance company within the Russian Export Center) saw new additions, including the Bank’s first loan agreement with a foreign company with insurance coverage provided by EXIAR. The total loan amount is USD 100 mln.
Bank Saint Petersburg and AKA Ausfuhrkredit Gesellschaft have entered into an updated master agreement to finance import contracts of the Bank’s customers. The agreement sets the framework for long-term financing in the form of tied buyer’s credit with insurance coverage provided by Euler Hermes and other export credit agencies.
Promoting active trade finance relations with counterparty banks, Bank Saint Petersburg issued 7 guarantees against counter-guarantees of its correspondent banks with a total amount exceeding RUB 545 mln.
In addition, Bank Saint Petersburg and the European Bank for Reconstruction and Development have signed a new agreement stipulating general terms of guarantees issued in favor of the Bank under the EBRD’s Trade Facilitation Program (TFP). The new agreement will minimize the Bank’s payment risks related to accepting and honoring letters of credit issued by foreign banks in favor of exporter customers.
The Bank's trade finance and documentary operations in the reporting year were characterized by the growing number of foreign trade transactions: 351 in 2017 when compared to 267 transactions arranged in 2016 whose total volume nearly doubled (from USD 113 to 238 mln). At the same time, portfolio structure saw a shift towards a greater share of import letters of credit (114 transactions with a total of USD 57 mln compared to 70 transactions for USD 18 mln in 2016) as opposed to 2016, which was characterized by a more pronounced growth in the number and volume of bank guarantees.