Corporate business development
Despite the difficult situation in the banking sector, the Bank has strengthened its positions in such industries as metallurgy, the fuel and energy complex, telecommunications, defense, construction, food, leasing, and insurance.
The first three quarters of 2009 were marked by slow business activity in corporate lending, but during the fourth quarter the Bank approved loans that increased the total amount of lending to corporate clients by about 4.2 billion rubles. Despite reviving lending at the end of the year, the Banks corporate loan portfolio decreased by 27% to 28.951 billion rubles as of January 1, 2010, while the export and trade financing portfolio fell from 5.494 billion rubles in 2008 to 3.418 billion rubles.
In 2009, the Bank continued to attract tied loans from foreign banks under the guarantees of such export credit agencies as Euler Hermes (Germany) and Eximbanka (Slovakia). As a result, MBRDs corporate clients had the opportunity to use financing services on beneficial terms (maturities of 5 to 10 years, low interest rates).
The work carried out by the Bank allowed its clients to receive
The volume of bank guarantees provided to legal entities in 2009 rose 58% to 8.341 billion rubles.
During 2009, the Bank offered corporate clients new deposit products: the Accumulative deposit with possible funding during the term of the deposit; the Operational deposit with funding and partial withdrawal; and the Universal deposit with funding, partial withdrawal and an option to cancel the deposit agreement early. These changes allowed the Bank to increase liabilities by attracting deposits from insurance, metallurgy and other companies.
For regional clients, the Bank developed and launched the Business Summer deposit, which featured a high interest rate and no fees for installation and servicing of the"Client-Bank" system.
In 2009, MBRD kept its traditional priorities in lending. Due to changes in the financial situation on the market, the Banks combined corporate loan portfolio amounted to 26,967.96 million rubles as of January 1, 2010:
- the Banks head office provided loans worth over 15,506.86 million rubles (57.50% of the total corporate loan portfolio);
- regional branches over 11,461.10 million rubles (42.50%).
As of January 1, 2010 the Banks loan portfolio included over 1,000 outstanding loan agreements and 40 bank guarantee agreements. The head office of the Bank concluded 88 loan agreements and 57 bank guarantee agreements in 2009.
The Banks head office and branches provided financing to 554 companies as of January 1, 2010, including 54 companies by the head office.
One of the main features of MBRDs lending in 2009 was the high quality of borrowers and the strict criteria they had to meet: loans were provided to borrowers in a sound financial position against safe pledge in the form of guarantees of financially stable companies or a pledge of liquid property.
In 2009, MBRD continued to lend to companies within industries that had emerged as priorities for the Bank. As of January 1, 2010, loans to companies from three main industries accounted for a total of 65.19% of the total loan portfolio:
- Financial leasing 7,250.78 million rubles (26.89% of loan portfolio);
- Retail 5,309.09 million rubles (19.69%);
- Construction 5,021.81 million rubles (18.62%.)
Companies from the oil and gas and telecommunications sectors also accounted for significant shares (8.45% and 5.78%, respectively) of the loan portfolio.
Thus, having kept its key priorities in allocating loans in 2009, MBRD had a loan portfolio with a diversified structure of investment in terms of industries.
In 2009, the loan portfolio changed in terms of the maturities of loan agreements, in particular:
- Short-term loans (up to one year) accounted for the largest share in the loan portfolio in 2008 79% of the total. As of January 1, 2010 the share of loans maturing earlier than in one year had decreased to 74.53% of the total.
- Mid-term loans (maturing in one to three years) fell marginally, from 15.61% in 2008 to 15.26% in 2009.
- The share of long-term loans, provided for over three years, doubled to 10.21% in 2009 from 5.37% in 2008.
The data provided suggest that the Bank mostly finances its clients current operations.
In 2009, MBRD also recorded a decrease in the share of U.S. dollar-denominated loans in its loan portfolio. The share of loans provided in dollars fell by 3.59 percentage points in 2009 to 23.44% from 27.03% of the Banks total loan portfolio.
Euro-denominated loans were trending in the opposite direction, their share increased by 4.41 percentage points to 11.31% from 6.90%. The share of ruble loans in the loan portfolio remained almost unchanged at 65.25%, down from 66.07% as of late 2008. The decrease in dollar loans can be attributed to the rise in the dollar exchange rate in early 2009 and borrowers intentions to redeem their dollar-denominated obligations.
The share of loans provided by the Banks branch network increased in 2009, as it did in 2008. The branches provided 42.50% (11,461.10 mln rbl) of the total amount of loans, an increase of 1.88 percentage points compared to 2008.
The Urals, Moscow Region, and Nizhny Novgorod branches were the largest branches of the Bank in terms of loans provided as of January 1, 2010. The three branches had a combined share of about 49.44% of the total amount of loans provided by MBRDs regional branches.
Summarizing the results for 2009, it is worth saying that the Bank had been implementing a successful credit policy, paying special attention to collecting previously provided loans and minimizing risks for newly-provided loans amid tough conditions on the financial market and negative trends in micro and macro economy. This allowed the Bank to keep its loan portfolio sufficiently robust.
As of January 1, 2010 the share of overdue loans in the consolidated loan portfolio amounted to 2,267.15 million rubles, or 8.41% of the total. In the Head Office, the overdue loans amount to 444.39 million rubles, or 2.89% of the Head Office loan portfolio.