Industry will help banks

The international liquidity crisis has led to banks becoming short of money. The Russian financial system is no exception ; the press is full of reports about a reduction in the volume of bank loans and an increase in interest rates on bank loans.

However, banks that have long been working with the real sector of the economy turned out to be protected from the crisis. So says vice-president of the Moscow Industrial Bank Yuri PTITSIN.

— How did your bank cope with last year’s crisis?

— I couldn’t call the situation that developed at the end of last year a real crisis. Indeed, there were certain difficulties with liquidity, but they were mainly due to the fact that some Russian banks had to return funds borrowed abroad in the form of Eurobonds placed there. When these banks placed their bonds, they intended to re-borrow funds in a timely manner and were faced with the fact that due to the liquidity crisis they were unable to do so. However, the Moscow Industrial Bank found itself in a much more advantageous position than its competitors. Our external borrowings are not very large in volume, and, in addition, they were attracted for five to nine years for specific credit projects.

Therefore, returns for these projects were made in equal shares in semi-annual tranches. In general, raising funds from foreign banks is one of the important areas that our bank is involved in, but we do this primarily in the interests of our industrial enterprises. We do not engage in speculative operations; our resources are directed to the technical re-equipment of our clientele, to the purchase of equipment and technologies.

- But still, last fall the situation in the banking system was quite difficult, and only the urgent intervention of the Central Bank saved us from a full-scale banking crisis?

- I can only confirm that the actions of the Central Bank were quite adequate and allowed to increase liquidity. However, I do not believe that the situation that developed last fall could really cause a serious blow to the banking sector.

- What is happening with liquidity now?

-- Over the next two to three months, the situation may gradually become more difficult because liquidity will begin to shrink. During this period, many Russian companies will be due to repay their previous bond issues.

We at the Moscow Industrial Bank do not face this problem, but we understand that since other banks will not be able to lend to their clients, the demand for loans from our bank will increase significantly, and we are preparing for this by creating the necessary liquidity reserves.

In addition, we may recall that the Central Bank increased contributions to the required reserve fund, thereby actually reducing liquidity in the market.

- But for you, as you said, the situation has not worsened?

- No, moreover, additional demand for loans has arisen from our clients. When enterprises were faced with the fact that they could not fully satisfy their financial needs in other banks, they came to us, and this allowed us to expand cooperation with industry.

— But where did you get the money when clients’ demand for credit resources increased?

-- The Moscow Industrial Bank has a very wide branch network. Currently, the number of our units has reached 156, and they are located in 21 regions throughout the European part of Russia. And, in addition, we have very interesting programs for attracting funds from individuals, and they actively trust us with their savings. I would like to draw your attention to the fact that the growth of individuals' funds in accounts with the Moscow Industrial Bank significantly exceeds the average for the Russian banking system.

-- Are you saying that now is a favorable time for banks with a strong regional network?

-- Without a doubt, the presence of a wide branch network is a strong competitive advantage for any Russian bank. Having a wide branch network, we, on the one hand, can actively attract deposits from the population, and on the other hand, serve the so-called network clients who have structural divisions located in various regions of the Russian Federation.

We can offer them good money management programs. In addition, this allows the parent structure to control financial flows and salary projects for all subsidiaries.

Having the most advanced technologies, we currently offer remote account servicing for enterprises located in almost any part of the Russian Federation. For example, unfortunately, we do not have structures in Novosibirsk, but several very large Novosibirsk enterprises are currently under our service.

- But industry needs long-term money. The population can’t give them?

-- There are several ways to solve this problem. First of all, when large investment projects appear, we have no problems attracting funds from foreign banks. We are developing cooperation with export agencies in foreign countries. These are the export-import banks of Europe, the USA, Canada, and we are currently concluding another agreement with South Korea. And I think that we will actively promote this direction.

The second area that we are actively involved in is cooperation with local authorities, which also provide long-term loans.

In particular, the Moscow Industrial Bank is an authorized bank of the Moscow government. We actively work with departments of the Moscow government, primarily with the Department of Science and Industrial Policy and the Department of Food Resources. Clients have the opportunity to receive long-term budget loans under the guarantees of the Moscow Industrial Bank, and the rates on these loans range from one quarter to half of the refinancing rate. These are very competitive offers. In addition, last year we began active cooperation with the Department of Small Business. Small businesses are growing quite actively, and we pay serious attention to small business lending.

-- Are other banks, your competitors, also gradually turning to industry, to the real sector?

- If you look at what is happening in our stock market, where the fluctuations are quite large, it becomes clear that many banks are simply forced to direct resources to industry. I think the further we develop, the more actively bankers will pay attention to the real sector. But our relationships with clients have developed over the years.

We truly understand the needs of our clientele. We are ready for competition, but we believe that the advantages that we currently have - primarily due to the accumulated experience and due to the complexity of customer service - give us the opportunity to look into the future with optimism.