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 customer 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 10 000 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, focusing on working with corporate customers.
Loans to legal entities represent 76.1% 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 90% of deposits in the standard range are already placed through Internet Bank i2B.
Implementation of the Agreements of General Terms for Attraction of Corporate Customer Funds to Deposits (hereinafter — the “Agreements”) to Internet Bank i2B allowed to eliminate written confirmation exchange between the Bank and its customers. In 2018, up to 90% of deposits opened under the agreements were placed online.
In April 2018, the Bank introduced a separate line of deposits. Sole entrepreneurs place deposits at rates different from those of legal entities including through Internet Bank i2B. A separate line of deposits allows for a flexible approach to deposit pricing for legal entities at the same time retaining necessary product margin.
In 2018, the Bank developed and offered customers a seasonal deposit Petersburg Seasons that could be opened in Spring and Fall 2018. 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. A 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 through the wide network of ATMs. All corporate cards issued by Bank Saint Petersburg support the cutting-edge mobile payment technology offered by Apple Pay, Samsung Pay and Android Pay. Moreover, customers may open a corporate card account and order their first card via Internet Bank i2B.
Starting from July 2018, MasterCard Business corporate cards are connected to the new Mastercard Business Bonus program. The cardholders may benefit from sales and special offers allowing to cut spending in categories useful for business. Nowadays, the program provides access to offers from 20 partners in five categories: services, office, transport, accounting, travelling. The partner base will be expending.
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.
In 2018, Bank Saint Petersburg actively cooperated with international payment systems MasterCard Worldwide and Visa International for the purpose of expanding the card portfolio and increasing transaction activity of corporate cards. For instance, in April 2018 the Bank held an event for active users of Visa Platinum Business cards, while in November 2018 representatives of MasterCard and the 1C: BukhObsluzhivanie company told business representatives about specifics of bookkeeping and tax accounting of corporate card transactions.
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.
The year 2018 saw introduction of a new online-service for corporate customers — now they may enter into acquiring agreements online. Now, customers of our Bank may execute merchant and e-commerce acquiring agreements without physical presence at the Bank’s office. They just need to fill in the application in the Internet Bank.
In the reporting year, Bank Saint Petersburg has doubled the number of turnstiles accepting bank cards for St. Petersburg metro fare payments. Metro fare can be paid at the first and the last turnstiles of all St. Petersburg metro stations by any bank card supporting PayPass or PayWave. Nowadays, more than 500 thousand trips are paid by contactless cards on a monthly basis. This made it easier for tourists to enter the metro, thus making their stay in the city more comfortable, including during the FIFA World Cup. Today, Bank Saint Petersburg provides acquiring services to St. Petersburg metro and makes it possible to pay by card at all ticket counters, turnstiles, travel pass machines and token machines. St. Petersburg metro has become the first in Russia to introduce contactless bank card payment.
In line with market conditions, in September 2018 the Bank introduced a new pricing principle for opening and managing corporate accounts — Packages of Cash and Settlement Services. As of January 1, 2019, the service had 611 users.
In 2018, the Bank launched Online Account for business enabling customers to reserve an account and receive its number in five minutes. In addition, users may reserve special bidder accounts.
To reserve an account a customer needs to fill in just 3 application fields. To open an account in the fastest and most convenient way, a customer may answer questions of a company and read the list of documents necessary to open an account in his Online Account.
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.
In 2018, the Bank was included in the list of banks that are entitled to open bidder accounts according to 44-FZ. Since September 2018, the Bank’s customers can open such accounts in Internet Bank i2B as well as at the Bank’s office. New customers of the Bank can reserve such accounts in their Online Account at the Bank’s website. As of January 1, 2019, special accounts were opened by over 1.5 thousand customers.
Bank Saint Petersburg in cooperation with its strategic partner VBC LLC has launched its new online service, where corporate customers can arrange a bank guarantee within one business day. In March 2018, the Bank issued its first online guarantee securing the performance of contract within 44-FZ with the help of the new service. Innovative technological solutions for the online service and automated scoring system allow to reduce the application review period and decision making to one hour. A customer doesn’t have to manage and open a settlement account. The Bank issues online guarantees for the amount of RUB 200 thousand to RUB 20 mln to secure participation in a tender as well as repayment of advance and fulfilment of contracts (as per 44-FZ and 223-FZ).
In 2018, the Bank offered a new service to customers from the construction sector — banking services to manage settlement accounts of developers. All developers must have such accounts pursuant to amendments to 214-FZ effective since July of the current year. An account is opened to arrange the developer’s activity within one construction permit issued in accordance with the procedure stipulated by current legislation of the Russian Federation.
Still 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, Lithuania and Poland. In 2018, the Bank’s correspondent network was replenished with a new euro account with Societe Generale (France) — the major European clearing bank.
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 sent.
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, payments, foreign exchange, cash re-counting, the delivery of cash wages to customers, and loading ATMs and payment kiosks.
2018 was a milestone year for improving customer service quality. The Bank’s cash collection teams made a total of 227 000 location visits, 181 000 of them to customers, 31 000 to service and replenish the Bank’s ATMs and payment kiosks, and 15 000 to the Bank’s branch network. The amount of cash transported and processed by the Bank in 2018 totaled RUB 588 bn.
To reach its strategic goals, Bank Saint Petersburg is striving to create a product range that matches the interests of its corporate customers 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.
The Bank has opened a credit line to Intellect Drilling Services LLC, a member of IDS Group. The credit limit within the revolving credit line amounted to RUB 2 bn. Intellect Drilling Services LLC specializes in construction and renovation of oil and gas wells and in related science and technical developments.
In 2018, the Bank continued its long-term cooperation with PJSC Kuzbass Fuel Company. From December 2017 to August 2018, the Bank executed several loan agreements according to which it issued loans with a total limit of RUB 500 mln and EUR 15 mln to the coal company. Credit lines are opened for a term of two years. The funds will be used to finance the company’s working capital. PJSC Kuzbass Fuel Company is one of the largest producers and exporters of power generating coal in Russia. The company is a retail network operator in four regions of Western Siberia that provides coal to 400 thousand households and more than 1 thousand public and private boiler houses.
In the reporting year, the Bank offered JSC UK Kuzbassrazrezugol a credit line with a limit of up to RUB 4 bn. The facility agreement is effective for two years to finance the company’s working capital. Being the second largest coal company in Russia, JSC UK Kuzbassrazrezugol is included in the raw division of Ural Mining and Metallurgical Company.
Bank Saint Petersburg offered JSC Novosibirskenergosbit a credit line in the amount of RUB 500 mln. The borrower is planning to use the funds to replenish its working capital. JSC Novosibirskenergosbit is the largest distributor in the Novosibirsk Region. It is the only guaranteeing supplier of energy there. The company has more than 30 thousand corporate and more than a million individual customers. JSC Novosibirskenergosbit has been the top-ranked energy supplier in Russia since 2012.
At the end of 2018, the Bank opened a credit line with a limit of RUB 1.5 bn to Abinsk Electric Steel Works Ltd. The two-year facility agreement will be used to finance the company’s working capital. Abinsk Electric Steel Works Ltd produces quality steel billet and rebar. Working since 2006, it is now the leading iron and steel manufacturer in the south of Russia with advanced equipment.
In 2018, the Bank joined a project finance initiative launched by Vneshekonombank. A relevant bilateral agreement was signed at St. Petersburg International Economic Forum. This initiative implies issuance of loans to borrowers on the basis of syndicated loan agreements that are partly funded by the state. The cooperation agreement between Vneshekonombank and member-banks provides for search and review of investment projects as well as consideration of their funding within the initiative.
In 2018, the Bank in cooperation with GAMBIT Agent Company LLC offered a new service to its corporate customers allowing to search for collateralized property insurance quotes and offers among leaders of the insurance market. Using this service, the Bank’s customers may choose the most beneficial offer for each pledge unit as early as at the stage of consideration of loan application by the Bank.
INVESTMENT BANKING SERVICES
In 2018, the Bank focused on the existing portfolio of private equity and venture capital investments. Thus, since 2H 2018 the Bank has been preparing to sell its shares in one of the fund’s Russian project companies. The sale is to be completed in 2019. As for the venture capital investments, at the end of 2018 the Bank sold its shares in a hi-tech company (SaaS platform) with IRR 28%.
The Bank acted as a leading investor in a subsequent round of internal financing of its portfolio company (tourist online service) together with Goldman Sachs and Vostok New Ventures (VNV).
In 2018, two out of six early cycle companies raised further rounds of financing with participation of external investors. Based on the estimation of new rounds the Bank’s return on investment amounted to 25% (biotech project) and 23% (security systems) in dollars.
One of the priorities in the activities of Bank Saint Petersburg is the creation of effective solutions allowing customers to competently manage currency, commodity and interest risks, while maintaining and increasing the profitability of their business.
The Bank is actively establishing a relevant product line for corporate customers, including tools for hedging market risks, creating additional opportunities for increasing profits and managing liquidity.
In the interests of customers, strategies based on an individual approach and thorough analysis of business specifics are constantly developing for various market segments. They allow the Bank's customers to choose a solution that meets their expectations.
The level of service and awareness of products increases regularly. In terms of the quality of services and price parameters, the Bank competes with the world's largest investment and brokerage companies.
Highlights of 2018:
• As a result of the development of an option strategy, the largest transaction for the Bank to hedge the company's currency revenues was structured;
• A series of hedging deals on oil prices were concluded;
• Commodity swap with a Russian coal mining company to hedge the cost of thermal coal took place.
In addition, the Bank is developing a liquidity management product line for corporate customers. The bundle of instruments for attracting and placing liquidity allows customers to increase the efficiency of transactions in the money market, and the Bank to improve service and increase the loyalty of its customers. In relation to that, a number of dual currency deposits were issued in 2018.
Interaction with corporate customers is based on an integrated approach to the implementation of hedging and liquidity management. This refers to the definition of objectives, the planning, the selection of tools, the monitoring and evaluation of its effectiveness.
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. 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 9.6% for small and medium-sized enterprises operating in priority sectors of the economy and a rate of up to 10.6% for enterprises operating in other sectors of the economy.
Under the Program 6.5 Bank Saint Petersburg opened two credit lines to the company AMI-Pribor that specializes in manufacturing gas-analyzing equipment. In total, under the Program 6.5 the Bank entered into loan agreements amounting to RUB 1.4 bn in 2018.
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). NGS participants provide important and efficient support to SMEs through their joint efforts, issuing guarantees and sureties to secure their loan obligations.
Bank Saint Petersburg signed agreements with 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, the Guarantee Fund of the Kaliningrad Region and other companies.
During more than a 10-year cooperation with the Small and Medium Enterprises Credit Support Fund companies of various industries have taken out loans under its surety — manufacturing, logistics, transport, construction, consulting and trade. In 2018, the Bank implemented several projects with the fund’s surety such as financing of Nevskaya Silovaya Kompaniya LLC. The company has been operating in the power engineering industry for more than 10 years, producing and supplying replacement parts for steam turbines as well as ancillary equipment for power plants.
In addition, the Bank’s work with small and medium-sized business is based on ecosphere for business concept that implies a number of profitable special offers from the Bank’s partners. For example, an entrepreneur may order the following products and services at a discount: software, promotion of its company in the Internet, recruitment services, accounting, telecommunication and printing services.
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 them with 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.
The year 2018 saw the development and implementation of programs and services for foreign trade participants in accordance with amendments to foreign exchange law: CFT, Online Account of foreign trade participant. Both Internet Bank i2B and the Automated System of Foreign Exchange Control were fine-tuned.
- Elimination of transaction certificate and forex transaction report form that is submitted to the Bank by a customer;
- Reduction of terms for acceptance of contracts for record at the Bank, for introduction of changes to the recorded contract, and for taking it off record;
- The term of correcting statement is no longer applied to confirming documents.
The range of events held in 2018 spanned a total of 9 webinars dedicated to various aspects of foreign trade, the ExIm Dialogues business breakfast, the ExIm Theory and Practice. Amendments to Foreign Exchange Law workshop, as well as an open conference Foreign Currency Contracts in the New Economic Environment. The Latest Update featuring guest speakers from HERMES Guild and customs authorities. Moreover, the Bank acted as a partner of Legal Gates. Export/ Import International Conference.
September 2018 saw launch of a new campaign ExIm. The Right Course that granted concessional ExIm services. As a result, in 3 months 125 new customers — participants of foreign trade —opened accounts with the Bank, which is 20% more than last year.
These measures resulted in a 20% ExIm income increase compared to 2017.
Due to employees’ experience, extensive expertise of ExIm managers and individual approach to each customer, the Bank is able to settle matters of various complexity levels.
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.
The year 2018 brought about execution of financing agreements including foreign trade transactions with largest banks of the Republic of Belarus. Transactions worth more than USD 115 mln were financed within the said agreements.
In 2018, the Bank issued guarantees and standby letters of credit within 3 large transactions for customers from aerospace and machine building industries in the amount of USD 32 mln as well as provided payment guarantee for foreign trade transaction with coverage from the European Bank for Reconstruction and Development.
The Bank's trade finance and documentary operations in the reporting year were characterized by the growing number of foreign trade transactions: 565 in 2018 when compared to 351 transactions arranged in 2017, and a significate increase from USD 238 to 399 mln. At the same time, the portfolio structure saw a shift towards a greater share of documentary collections and guarantees issued (283 transactions for a total amount of USD 44 mln were realized on documentary collection, versus 101 transactions in the amount of USD 6 mln in 2017).
TARGETED PROGRAM FOR AGRICULTURERS
Boasting extensive experience of providing loans to agricultural enterprises, in 2017 the Bank was granted the status of authorized bank of the Ministry of Agriculture of the Russian Federation for the purposes of the agrobusiness concessional lending program: The Bank’s customers can now apply for loans with up to a 5% interest rate.
In 2018, the Bank continued active lending of agriculture, for instance, it provided financing in the amount of RUB 765 mln to Detskoselski Concern — a large agricultural company ranked among 300 best agricultural enterprises in Russia and one of the leaders in milk production in the North-West Region.
In the reporting year, the Bank executed concessional facility agreements with a total value of RUB 1.75 bn with agricultural enterprises.