As one of the key players in St. Petersburg’s retail banking services, Bank Saint Petersburg aims to become the first bank of choice for the city's residents. The Bank currently has 1 600 000 retail customers, forming a solid base for the future successful growth of its retail business. The total number of transactions performed by the Bank for its retail customers in 2015 reached 8 850 000.
During 2015, the retail loan portfolio increased by 10.1% to RUB 48.7 bn. While mortgage loans gained 20.4%, consumer and car loans showed a 2.6% and 31.9% decline respectively. The share of loans to individuals amounted to 14.4% of the total loan portfolio.
The Bank maintains a constant retail deposit growth rate. In 2015, the total amount of retail deposits increased by 20.5%, reaching RUB 188.1 bn. The share of retail deposits amounts to 54.8% of total customer deposits.
The Bank was ranked among the top 5 retail banks in terms of customer service quality, according to Retail Finance Awards 2015.
RETAIL DEPOSIT SERVICES
An extensive sales network, opportunity to place deposits through the remote banking system, a high quality of services, reliability, a wide range of deposit options and competitive interest rates provide the Bank with a continuously increasing number of loyal customers and a steadily broadening deposit base.
According to Interfax agency, as at January 1, 2016 the Bank ranks 14th among Russian banks by total retail deposits.
In order to increase its customer base and attract additional deposits inflow, the Bank offered its customers a choice of several seasonal deposits with historically high interest rates in 2015.
The Bank’s customers also have the opportunity of placing deposits online. Online deposits accounted for 51% of retail deposits placed in 2015. As an example, one of the new offers launched in 2015 was the Online Pension Deposit.
One of the priority areas for the Bank's retail business is the issuance of bank cards and the provision of related services. As at January 2016, the total number of all types of issued plastic cards reached 1 036 000. The Bank has seen an annual increase in the number of its payroll customers: as at January 1, 2016, the Bank had 10 870 payroll programs with a total of 549 000 active payroll cards.
A large-scale project was completed by Bank Saint Petersburg in early 2015, after successfully winning a contract for the relevant open tender: St. Petersburg Metro fares can now be paid using bank cards. All ticket counters in the city’s Metro system were equipped with payment terminals accepting MasterCard and Visa. In addition, fares can be paid directly at the turnstile using either a MasterCard PayPass or Visa PayWave proximity cards. At present, each of St. Petersburg’s Metro stations is equipped with at least one card reading device. The Bank and the Metro intend to raise the number of such turnstiles to two per each station in 2016.
In the reporting year, the Bank took part in a project which had previously had no precedent in Russia: the introduction of an innovative online financial service MasterCard® mobile NFC card. This virtual debit card, which is tied to the customer's account, is downloaded on the mobile phone, enabling contactless payments. The mobile MasterCard® NFC cards provide an opportunity to leave the wallet at home, making shopping possible by simply tapping the smartphone to make payments. Bank Saint Petersburg started issuing such cards through the NFC-Wallet application developed by CardsMobile. Customers using the NFC card to pay their metro fare also enjoy a cashback option with a percentage of the funds spent returned to the account.
BSPB's YARKO (ALL BRIGHT) rewards program was distinguished as the best plastic card loyalty program in Russia by Loyalty Awards Russia 2015.
Starting from May 2015, the Bank has started issuing the MasterCard World Black Edition intended for its premium segment clients. The premium program includes: monthly accrual of interest on the account balance, YARKO bonus points earned for each purchase using the card, an insurance program, a higher cash withdrawal limit, access to airport VIP lounges, the issue of additional Platinum MasterCard cards, concierge service support and the services of a personal account manager.
In October 2015, the Bank started issuing Mastercard World Pension cards for customers whose pensions are paid through an account with the Bank, and for customers who also wish to enjoy all the benefits of the premium services program. Card holders have the benefit of interest accrued on the account balance, rewards earned through purchases, increased rewards for payments at pharmacies as well as insurance in case of emergencies.
Another plastic card product launched in the reporting year is the MasterCard Prepaid branded gift card. The card is a full-featured payment instrument, which can be purchased as a gift alternative to the traditional "envelope of cash". The card is issued in denominations of RUB 1 000, RUB 3 000, RUB 5 000 and RUB 15 000. It is designed as a greeting card with space to write a personal message.
The Bank ranks 3rd among all local banks and 1st among private banks in St. Petersburg’s mortgage lending market. Throughout 2015, the Bank provided a total of RUB 13.2 bn in the form of 7 261 loans, compared to RUB 15.6 bn and 8 355 loans in the previous year. 90% of the total mortgage loan portfolio consisted of mortgage loans for newly constructed buildings.
The key driver of growth in 2015 was the State Mortgage Subsidy Program in which the Bank has been participating since its very inception. The program established the following eligibility requirements: 1) a loan amount of up to RUB 8 mln for Moscow, the Moscow Region and St. Petersburg, and up to RUB 3 mln for other regions of the Russian Federation; 2) the initial down payment: at least 20% of the property cost; 3) a fixed rate of 12% for the entire life of the loan; 4) maturity up to 25 years. Loan applications are reviewed within 5 business days after the complete package of documents is submitted to the Bank.
At the year’s end in 2015, Bank Saint Petersburg was ranked 3rd in Russia within the State Mortgage Subsidy Program and 8th in terms of new mortgages issued, up from 9th place in the previous year. The Bank’s share in new mortgage lending in St. Petersburg reached 18% in 2015.
The Bank opened 7 Mortgage Lending Centres where customers can get detailed advice on all mortgage lending programs available and obtain an estimated calculation of the amount and maturity, as well as apply for a mortgage loan. A dedicated loan officer supports each customer throughout the entire process. As an additional convenience for the customers and a way to ensure confidentiality, each Centre has a separate meeting room; the Bank's outlets also have depository areas for transactions using safe deposit boxes.
The Bank is continuing its productive cooperation with construction companies and real estate agencies. By the end of 2015, more than 150 developers and over 600 construction projects received the Bank’s accreditation. Customers can receive mortgage related advice and apply for a mortgage loan at the Bank's representative desks located in the offices of its partner companies.
In the Bank's 3 Car Lending Centres, 2 adjacent to the Bank's outlet offices and 1 located in a car showroom, the customers can get detailed advice on all car lending programs and apply for a loan.
In 2015, the Bank started to participated in the state program for concessional car loans. According to the program's requirements, loans are intended for purchasing new passenger cars and commercial vehicles manufactured in the Russian Federation in 2015 for under RUB 1 mln, with initial payment of at least 20% and maturity up to 3 years.
The Bank continues to cooperate with all major auto sales centres in St. Petersburg. The number of partners has grown in 2015, reaching up to 250.
According to the year-end results, the Bank continues to maintain a high-quality car loan portfolio.
Bank Saint Petersburg takes a conservative approach to risk and offers consumer loans only to the existing customer base. The target segment for the unsecured lending program is represented by: the holders of the Bank's payroll cards, customers whose financial position is well-known to the Bank, as well as clients who have a verifiable record of using the Bank's services. Payroll card holders account for 80% of the Bank’s unsecured loan portfolio.
This approach has proved to be the most efficient one. Firstly, targeted work with customers and the forecasting of their needs guarantees a more sizeable response. The second advantage is that the Bank does not have to "go out in the street" and take the risks of the outside unsecured lending market, since the Bank already has over one million customers whose financial position can be assessed very efficiently.
Bank Saint Petersburg has introduced a fully remote loan origination, which is a brand new consumer lending process that allows the customer to save a significant their time. The Internet Bank users can independently submit loan applications, monitor their review progress, sign loan agreements and have funds disbursed to their accounts.
The share of consumer loans fully originating through the Internet Bank reached 70% in 2015.
The principal area of focus in 2015 was the enhancement of anti-fraud and operational risk management systems within the lending process. The fine-tuning of processes will ensure the stability of unsecured lending business during its subsequent scaling.
In order to secure its positions in the St. Petersburg consumer lending market, the Bank intends to put its existing customer base to maximum use through cross-selling and other methods, focusing on its continual growth, while furthering our efforts to improve customer services and optimizing the lending procedure.
REMOTE CUSTOMER SERVICES FOR INDIVIDUALS
The Bank's customers enjoy the benefits of maintaining their accounts and executing most banking transactions remotely, either through the Internet Bank or through the extensive network of ATMs and payment kiosks. Electronic payments (through the Internet Bank, ATMs and kiosks) account for 96% of the total payments made by the Bank's individual customers.
The Bank's current Strategy highlights the advancement of electronic services as one of its top priorities and designates the Internet Bank as the Bank's remote banking flagship. As at January 1, 2016 the Internet Bank had 600 000 users, which is 1/5 of the economically active population of St. Petersburg.
One in three of the Bank's individual customers are using the online services of the Internet Bank, with this ratio being one of the best in Russia. The major innovations achieved in 2015 include: WikiPay solution, which allows the customer to pay paper bills without the need to manually input the payment recipient’s extensive payment details; insurance service for travellers and apartment owners; and an option to subscribe to the online payment of taxes and fines. The database of service providers who can receive payments through the Internet Bank contains 1 000 entities.
At the Retail Finance Awards 2015 ceremony, Bank Saint Petersburg was distinguished for having the best retail finance product, the latter being the above-mentioned WikiPay self-training payment details database. The Bank also implemented WikiPay for mobile banking, taking an important innovative step towards the alignment of the mobile and desktop versions of the Internet Bank.
The Bank's digital team also justified its status of the spearhead of national innovations at the Customer eXperience Awards Russia 2015, receiving a total of three awards: for the unique paper-free Mobile Bank Credit Limit mobile banking service, for the nation's best multichannel and omni-channel customer service practices, as well as the Grand Prix for best implementation of the customer experience concept in Russia.
According to Markswebb Rank & Report analytical agency, Bank Saint Petersburg’s Internet Bank of ranked 1st in Internet Banking Rank 2015, the annual survey of the efficiency of online services provided by the Russian banks to individual customers.
Throughout 2015, 70 new ATMs and payment kiosks and 394 additional POS-terminals were installed, raising the total number of ATMs and kiosks to 728, and the total number of POS-terminals to 6 865.