Subsidiary of Russian bank prepares for serious expansion of retail business in Azerbaijan
Baku, Azerbaijan, Jan. 7
By Ilhame Khalilova - Trend:
Bank VTB (Azerbaijan) intends to maintain high rates of development and plans to become one of the top seven banks in the country over the next three years, chairman of the bank's board, Alexander Eremin told Trend.
"It is possible that this will happen faster, because VTB Bank (Azerbaijan) is a part of a major international VTB Group and has strong support of the parent bank," he said. "We have big plans to build a retail portfolio, and we plan that its volume will increase fivefold. As a result of this growth, VTB Bank (Azerbaijan) has to get into the top ten banks, leading in retail".
Eremin said, the bank also has ambitions in the area of corporate lending, but these ambitions will be specified after approval of the VTB Group's corporate business development strategy in January.
In the first half of 2013, VTB Bank held 23rd place in the Azerbaijani financial institutions ranking. The bank previously held 40th place in the period when it entered the country's banking market. VTB Bank (Azerbaijan) was established on the basis of AF Bank that was acquired by VTB (Russia) in 2008.
Eremin said capital increase allows the bank to actively expand its loan portfolio. In 2012, VTB Bank was able to provide a maximum loan of up to three million manats with a capital of 15 million manats, whereas now the bank's customers will be able to have access to loans of up to nine million manats. By late 2013 the loan portfolio exceeded 187,9 million manats. For comparison: in 2011 it amounted to about 40 million manats.
"Plans on the bank's retail business have been approved. According to the plans this year the bank will grow by 70 percent and the loan portfolio will be increased to 340 million manats," the bank's head said.
Within the retail business development strategy for 2014-16 the retail volume in the loan portfolio of VTB Bank (Azerbaijan) is expected to reach 400 million manats (given the lending to small and medium-sized businesses the portfolio will reach 560 million manats) compared to 80 million manats expected for late 2013.
Eremin went on to add that today about 50 percent of the bank's loan portfolio accounts for retail lending, herewith car loans account for a significant proportion of this segment.
"In early 2012 we almost were not present in this market, but now we are one of the major players. The bank is actively working with Chevrolet and KIA car dealers and joint work with Hundai and several other car dealers has been initiated," he said.
About 25 percent of the bank's portfolio accounts for small and medium businesses and about 25 percent account for the corporate unit. Legal entities constitute about 50 percent of the bank's portfolio and the rest account for individuals, in line with the classification adopted in Azerbaijan's banking sector.
The aggregate capital of the VTB Bank (Azerbaijan) is about 45 million manats, and it authorized capital exceeds 50 million manats. Its shareholders include JSC VTB Bank (51 percent) and JSC AtaHolding (49 percent).
VTB Group ranks second in all the major indicators in the Russian banking market. VTB Bank JSC has the highest rating of international rating agencies Moody`s Investors Service, Standard & Poor`s and Fitch among Russian banks.
The official exchange rate on Jan. 7 is 0.7845 AZN/USD.
Translated by E.A.
Edited by C.N.