The Bank continues to improve its performance, 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. Today, the Bank’s corporate clients number more than 56 000 companies. The total number of transactions performed by the Bank for its corporate customers in 2015 exceeded 7 900 000.
Bank Saint Petersburg’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 5 000 corporate customers (Bank Saint Petersburg completed the integration of Bank Evropeisky (Kaliningrad) during the reporting year, reorganizing it together with the Bank's Kaliningrad Branch into a new Evropeisky Branch).
Loans to legal entities represent 85.6% of the total loan portfolio. The sectoral breakdown of the Bank’s corporate portfolio 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. At the same time, significant attention is being focused on expanding business in Moscow. As of January 1, 2016, 27.6% of the Bank’s corporate loan portfolio is made up of loans originating in the Moscow branch.
During 2015, the corporate loan portfolio grew by 8.5% to RUB 316.8 bn. The Bank pays particular attention to developing a high-quality, well-balanced loan portfolio.
Corporate customer deposits remain a principal source of funding for the Bank, and represent 45.2% of total customer deposits. During the reporting year, corporate customer deposits decreased by 8.0% to RUB 155.3 bn.
Bank Saint Petersburg is striving to become the main clearing bank for St. Petersburg residents and enterprises engaged in payments and settlements with customers and suppliers. In particular, a number of special offers were made available to legal entities in 2015 to facilitate the opening of settlement accounts.
The Bank continues to advance its Enterprise Clearing Center product, which allows the holding company in the group to centrally manage corporate finance in companies with a geographical and organizational structure of any degree of complexity. 2015 saw two new network customer groups connected to the system.
As part of the recently introduced follow-through service for government contracts, the Bank opens and maintains subcontractor accounts and, as an added feature, supervises settlements with suppliers and contractors under the government contracts.
For employees of corporate customers and sole proprietors, the Bank issues corporate cards that allow settlement of the company’s business-related current expenses. Such cards can be used to withdraw funds for business-related settlements, including travel and hospitality expenses.
As part of strengthening its card payments infrastructure, the Bank offers its corporate customers merchant acquiring services, that enable legal entities and sole proprietors to accept plastic card payments for their goods and services, including contactless technologies, reducing the time required for servicing each customer.
Bank Saint Petersburg continues to expand the list of card types accepted by its POS-terminals. In 2015, the Bank started to accept cards of yet another international payment system: UnionPay International (China). Agreements were also made in 2015 to begin accepting cards of the Russian MIR National Payment System and of the international JCB system (Japan) in 2016.
The Bank's impeccable reputation and strong financial performance allowed it to maintain good business relations with major US and EU banks which have been its long-standing correspondents. The Bank processes uninterrupted customer payments in USD and EUR, and is increasing the volume of payments in Chinese Yuan. Following the acquisition of Bank Evropeisky, the correspondent network was optimized in 2015 through the addition of new correspondent accounts in Poland and Lithuania that are actively used by customers based in Kaliningrad.
The proficiency of the Bank’s staff in ensuring high quality processing of client payments was highlighted by the receipt in 2015 of the Straight-Through Processing Excellence Award for 2014 from Commerzbank AG (STP Excellent Quality Award 2014).
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, delivering cash wages to clients, and loading ATMs and payment kiosks. By the end of 2015, 1 903 stores were receiving the Bank’s collection services. The volume of cash transported in 2015 via the Bank’s collection service remained at the level of 2014 and amounted to RUB 540 bn.
CORPORATE LENDING AND INVESTMENT BANKING SERVICES
To reach its strategic goals, Bank Saint Petersburg is striving to create a product range that matches the interests of corporate clients as much as possible. In spite of the challenging economic environment, the Bank continues to offer loans to companies representing various industries and to strengthen its presence in this market segment.
In 2015, within its cooperation with the companies of the United Shipbuilding Corporation group, Bank Saint Petersburg set a credit limit of RUB 2.5 bn maturing in December 2017 for Baltic Shipyard LLC for the purposes of funding the factory overhead costs and costs associated with work commissioned by OJSC Rosenergoatom Consortium. Under the credit lines opened in November and December, the Bank has granted more than RUB 600 mln to the company.
Artis-Agro Export LLC, which specializes in international export of agricultural products, was assigned a credit limit of RUB 2.2 bn for up to 12 months and received loans totalling RUB 2.1 bn in order to buy agricultural commodities from domestic suppliers and also cover related transportation costs.
One of the landmarks of 2015 was the loan agreement with Global BUS LLC (authorized dealer of MAZ OJSC) for the purposes of delivery of 80 new large-capacity single-section low-deck buses to Passazhiravtotrans State Unitary Enterprise, which will enable Passazhiravtotrans to efficiently upgrade its entire fleet in time for the 2018 FIFA World Cup.
In 2015, the Bank’s investment banking offered major customers investment lending, project finance, syndicated loans, investment and corporate consulting services, M&A transactions support, and other types of structural finance.
Enjoying access to a wide range of financial instruments, Bank Saint Petersburg creates efficient products that allow its corporate customers to hedge their currency and interest rate risks, which becomes particularly important amid the high volatility in financial markets. The Bank’s variety of hedging strategies for the foreign exchange market allows customers to choose the solution that meets their appetite in terms of price-return.
The Quotation Board service gives customers the opportunity to receive transaction details (rates and yields) from the interbank market and remotely enter into forward FX transactions (fixing the rate for future currency conversion), thus ensuring protection against weakening or strengthening currency rates to achieve efficient planning of future cash flows and independence from political factors. The number of Quotation Board customers increased 3 times in 2015 compared with the previous reporting year.
In order to increase customers' awareness of the opportunities and advantages of various financial products, the Bank organized several large-scale events jointly with the Moscow Exchange and such partner companies as Bloomberg, Thomson Reuters, EY, SPIBA, KPMG, and others. These events were attended by more than 500 representatives of Russian and foreign companies during 2015.
REMOTE CUSTOMER SERVICE FOR CORPORATES
The Internet Bank i2b, launched in October 2014, became the principal remote banking channel for most of the Bank's corporate customers during 2015. The number of its users grew sixfold from 7 000 to 42 000, with more than 90% customers providing highly positive feedback and commenting on the system's functionality and convenience, and 99% of corporates transactions being made through digital channels.
This was achieved through large-scale system development and fine-tuning of functional features. i2b Internet Bank can now be used to remotely perform all standard banking operations, such as making ruble and foreign currently transfers, managing corporate cards, converting currency, placing deposits, performing full foreign exchange control cycles, and consulting the Bank's experts.
In addition, the system now boasts several unique features. The Holding-Bank service is designed for large companies with subsidiaries and facilitates work with all subsidiary accounts through a single interface to control and distribute financial flows. The Quotation Board service can be used for clients’ currency conversions. A complete range of necessary functions has been offered to the Bank's payroll project customers, from payroll card account reservation to payroll record download and automatic generation of security payments. Finally, a service unique in the market is the option of signing documents using an individual's electronic signature, facilitating the work of executives who manage the accounts of several companies.
The principal area of focus in developing the Bank's deposit products in 2015 was the promotion of remote deposit placement through electronic sales channels. i2B Internet Bank now has a function that allows deposits to be placed with an early withdrawal option. This type of deposit became the second most popular deposit product in the Bank's remote banking system, with the share of such deposits reaching 23% by the end of the year.
Moreover, from August 1 until October 31, 2015, the Golden Age Deposit, a special offer timed to coincide with the Bank's 25th Anniversary, was available to corporate Internet Bank users. The key feature of this deposit was the higher interest rate as compared with other fixed deposits. This deposit was only available through the Internet Bank.
By the end of 2015 the Bank had reached its target and 61% of all corporate deposits with the Bank had been placed online. This significantly reduced the workload of the customer service staff who were able to focus instead on individually tailored deposits.
PROGRAMS TARGETED AT SMALL AND MEDIUM ENTERPRISES
Loans to small and medium enterprises are strategically important for the Bank and allow SMEs to finance their working capital, purchase equipment, vehicles, real estate and other property required for their business development, as well as to start new lines of business.
The volume of the Bank’s loans granted to SMEs in 2015 amounted to RUB 78.1 bn.
The Bank remains an active participant in government programs for SME support. In particular, the Bank has entered into agreements with the St. Petersburg Small and Medium Enterprises Credit Support Fund and OJSC Credit Support Agency of the Leningrad Region. Such funds act as sureties for the borrower's obligations in cases where available liquid collateral is insufficient. The surety processing procedure is fast and simple, with the relevant decision made within 3 business days after the Bank's application is submitted. During 2015, the volume of loans disbursed with one of these two funds acting as surety multiplied by 4.3 from RUB 121 mln to RUB 526 mln.
Additionally, in 2015 the Bank entered into an Agreement with OJSC Russian Bank for Support of Small and Medium Enterprises (MSP Bank OJSC) concerning the opening of two lines of credit of RUB 300 mln each for:
- funding to promote innovation, modernization and improve energy efficiency of small and medium enterprises;
- funding of SMEs producing goods and services for large-scale enterprises.
In cooperation with MSP Bank OJSC, the Bank also opened credit lines for a number of companies, such as EnergoGazMontazh LLC (for the purposes of construction of self-contained water-heating gas boiler houses), VVK-Stroykorporatsiya LLC (for the purposes of funding the construction of a railway section under a contract with Russian Railways OJSC), and some others.
As a result of the Bank's cooperation with Korporatsiya MSP OJSC, the Bank's customers also have the opportunity (subject to certain requirements) to receive a loan in the case of unavailable or insufficient own collateral. Korporatsiya MSP issues guarantees of up to RUB 1 bn for up to 15 years which can cover up to 70% of the required loan collateral amount.
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, supporting and expanding the list of its foreign contractor banks.
The first transactions were executed in 2015 under the Cooperation Agreement with AO EXIAR concerning loans to export-oriented enterprises. The Agreement enables the Bank to lend funds to small and medium enterprises with EXIAR's insurance coverage as collateral.
The Bank joined the program being implemented by the Government of the Republic of Belarus that is designed to partially compensate interest on loans offered to Russian companies for the purpose of purchasing goods in the Republic of Belarus. The Bank's first transaction within this program has been completed. The agent bank under the relevant Agreement with the Ministry of Finance of the Republic of Belarus is OJSC BPS-Sberbank (Republic of Belarus).
Bank Saint Petersburg signed a General Loan Facility Agreement for Long-Term ECA-Covered Credits with Landesbank Hessen-Thüringen Girozentrale (Helaba) with the intention of promoting trade between Russia and Germany.
The Bank has also broadened the range of its services for correspondent banks. For instance, 4 guarantees were issued in 2015 against counter-guarantees issued according to instructions of Russian and foreign banks.
The Bank's trade finance and documentary operations in the reporting year were characterized by a growing number of foreign trade transactions, with 235 arranged in 2015 as compared with 210 transactions arranged in 2014. The overall volume of documentary operations in 2015 saw an increase in 2014. Meanwhile the total volume of documentary operations in 2015 increased from USD 106 mln in 2014 to USD 118 mln in 2015. The most evident growth in the reporting year was observed in the number of export operations.
Geography of trade and structured finance arranged by the Bank