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 1 770 000 retail customers, forming a solid base for the future successful growth of its retail business.
Throughout 2016, the retail loan portfolio increased by 11.7% to RUB 54.4 bn. While mortgage loans gained 20.0%, consumer and car loans showed a 4.3% and 35.3% decline respectively. The share of loans to individuals reached 17.0% of the total loan portfolio.
In 2016, the total amount of retail deposits decreased by 0.3%, totalling RUB 187.4 bn. The share of retail deposits amounted to 52.4% of total customer deposits.
The Bank was ranked among the top 5 retail banks in terms of customer service quality, according to the Retail Finance Awards 2016.
RETAIL DEPOSIT SERVICES
An extensive sales network, the opportunity to make deposits online, 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 the Interfax agency, as of January 1, 2017, the Bank ranks 14th among Russian banks by total retail deposits.
In order to increase its customer base and attract additional deposit inflow, the Bank offered its customers a choice of several seasonal deposits with historically high interest rates in 2016.
The Bank’s customers also have the opportunity to make deposits online. Online deposits accounted for 62% of retail deposits placed in 2016. Customers receiving their pensions through the Bank enjoyed a special offer in 2016: increased deposit rates on their Online Pension Deposits.
Dynamics of Retail Customer Deposits, RUB bn
One of the priority areas for the Bank's retail business is the issuance of bank cards and the provision of related services. As of January 1, 2017, the total number of all types of plastic bank cards issued reached 1 049 000. The Bank has also seen an annual increase in the number of its payroll customers: as of January 1, 2017, the Bank had 12 000 payroll programs with a total of 532 000 active payroll cards.
In 2016, the customers of Bank Saint Petersburg were among the first in Russia to take advantage of the groundbreaking Apple Pay and Samsung Pay payment services. Over 20 000 of the Bank’s customers are currently using these convenient and secure solutions for their daily purchases.
The Bank was high on the list of the first Russian banks to join the MasterPass global e-commerce platform. Bank Saint Petersburg customers who use MasterPass technology and have access to the Bank's online banking system are able to pay for products and services from their credit/debit card accounts in just a few clicks, without the need to input card details on the retailer’s website. MasterPass stores data in secure mode and thus there is no need to input them manually. Online banking customers can easily and securely make purchases from any websites that carry the MasterPass logo.
The Bank’s credit/debit card business in 2016 was focused on expanding the portfolio of existing products. For instance, the total number of active users of the Bank’s flagship card product, YARKO cards, showed a growth rate of two and a half times. BSPB's YARKO rewards program was distinguished as the best plastic bank card loyalty program in Russia by the Loyalty Awards Russia 2016.
The share of merchant card transactions demonstrated a significant growth, from 23% to 27% of overall card transactions.
Numerous promotional activities were held throughout 2016, with top prizes including a BMW X6 and money prize of RUB 1 000 000.
The pension card portfolio showed 3.6-times growth in 2016: from 5 642 cards as of January 1, 2016, to 20 227 as of January 1, 2017. One of the reasons behind such outstanding growth was the pilot project launched by the Bank jointly with the Pension Fund of the Russian Federation in St. Petersburg and the Leningrad Region in mid-2016, which allows customers to apply for pension cards at Pension Fund offices. Citizens applying for retirement benefits are offered the option of receiving their pension payments through an account with Bank Saint Petersburg, with the simultaneous issuance of Mastercard Word Pension cards.
The Bank ranks 3rd among all local banks and 1st among private banks in St. Petersburg’s mortgage lending market. Throughout 2016, the Bank provided a total of RUB 17.6 bn in the form of 9 520 loans, compared to RUB 13.2 bn and 7 261 loans in the previous year. 82% of the total mortgage loan portfolio consisted of mortgage loans for newly constructed buildings.
The state program of mortgage interest rate subsidies, in which the Bank has been participating since its very inception, continued throughout 2016. In addition, during the reporting period, the Bank of Russia was gradually lowering its key rate, enabling the Bank to reduce its mortgage interest rates both as limited-time special offers for certain partners and permanently in 2H 2016.
At the year’s end in 2016, in Russia Bank Saint Petersburg was ranked 5th within the State Mortgage Subsidy Program and 10th in terms of new mortgages issued. In St. Petersburg, the Bank’s share in new mortgage lending amounted to 18% in 2016.
The Bank opened 8 Mortgage Lending Centres (6 in St Petersburg, 1 in Moscow and 1 in Kaliningrad) 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 2016, more than 170 developers and over 650 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 reporting year, the Bank received two prestigious awards: as the Most Trusted Mortgage Lender in St. Petersburg as part of the Consumer Confidence competition, and as the Best Mortgage Bank 2016 at the international Global Banking & Finance Review Awards.
Mortgage Portfolio High Quality
* Overdue loans include the entire principle of the loan at least one day overdue.
At the Bank's 3 Car Lending Centres (2 in St Petersburg and 1 in Kaliningrad), customers can get detailed advice on all car lending programs and apply for a loan.
The Bank continues to participate in the state program for concessional car loans. According to the program's requirements, loans are intended for the purchase of new passenger cars and class B commercial vehicles manufactured in the Russian Federation in 2016-2017 under RUB 1.15 mln, with an 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 and maintains 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 still represented by the customers, holding the Bank's payroll cards, whose financial position is well known to the Bank. 80% of the unsecured loan portfolio is attributed to payroll card holders. The Bank also offers loans to customers who have a good profile with the Bank or are employed by reliable partner entities.
This approach has proved to be the most efficient one. First of all, targeted work with customers and forecasting their individual needs guarantees a more sizeable response. The second advantage is that the Bank can take a cautious approach to new borrowers and accept only measured risks of the external unsecured lending market, having over 1 770 000 customers whose financial position it can assess most efficiently.
Bank Saint Petersburg has introduced a fully online loan origination, which is a brand new consumer lending process that allows the customer to save time significantly. Internet Bank users can independently submit loan applications, monitor their review progress, sign loan agreements and have funds disbursed to their accounts.
The Bank ranks 3rd among all banks and 1st among private banks in St. Petersburg’s market of consumer loans and credit cards.
Improvement efforts in 2016 were focused not only on anti-fraud and lending operational risk management tools, but also on in-depth analysis of products and segments, ensuring the sustainability of unsecured lending business during its scaling in 2017.
To secure its position in the St. Petersburg consumer lending market, the Bank intends to put to maximum use its existing customer base and focus on its further growth while continuing efforts to improve customer services.