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Annual Report 2008
The Bank utilised the benefits of its Group structure, and conducted transactions with the participation of its subsidiary banks.
During the year, VTB Bank introduced a number of measures to improve its service model for its key client segments. In particular, the Bank launched an institute of product managers in order to identify more efficiently its corporate clients’ product needs. VTB has further developed the IT infrastructure of its corporate business. The Bank is undertaking a number of projects to enable the generation of necessary information on clients’ transactions in an online format. In 2009, VTB plans to complete in its affiliate network the rollout of the complex automated system for documentary letters of credit and bank guarantees which is already functioning in its head office.
Services for large clients
In 2008, VTB had 3,700 large clients, including financial institutions. During the year, VTB played a special role in supporting the Russian economy as one of the cornerstone banks. The Bank significantly expanded its volume of lending to strategically important companies. This lending was funded by the State in order to support key sectors of the
Russian economy. In particular, VTB extended loans to defence, car manufacturing, transport, non-ferrous and ferrous metals, oil and coal mining companies. Among them were NPO Saturn, AutoVAZ, Rosoboronexport, Mechel, Evraz Group, Russian Aluminium, UGMK and SUEK. Furthermore, VTB continued to finance social housing projects, and provided loans to retail food chains, including Seventh Continent, X5 Retail Group, Lenta, Dixy and Holiday. Nevertheless, VTB tightened its lending policies and reduced lending limits for retail and real estate sectors, recognising the increased lending risks, but excluding large national players where it has fixed individual limits for each company.
In 2008, the Group continued to be involved in a number of State investment projects and provided co-financing for the construction of Sheremetyevo-3 terminal complex; infrastructure projects in Sochi for the Olympic Games; a civil aviation construction project for Sukhoi Concern, SSJ-100; and a federal investment programme in Energoatom Concern, the State nuclear power entity.
In 2008, whilst facing the global financial crisis, VTB was focused on attracting deposits from its large corporate customers as one of its priorities. The bank was particularly successful in attracting deposits from
Top ten corporate lending deals in 2008
Name of client Total deal size Transaction type
ALROSA RUB 44.2 billion Refinancing of short-term liabilities
DON-Stroy Group RUB 16.4 billion Financing of housing construction projects
UGMK-Holding US$ 338.0 million Corporate loan
AFI Development Group RUB 9.9 billion Corporate loan for the construction of the “Moscow-city” complex
RUSAL Krasnoyarsk RUB 9.0 billion Corporate loan
JSC Southern Kuzbass RUB 8.6 billion Financing of working capital needs
JSC Terminal US$ 264 million Financing for the construction of the Sheremetyevo-3 airport complex
NPO “Saturn” RUB 7.4 billion Corporate loan
Sozdanie Investment Group RUB 5.7 billion Financing for the construction of the “Park Pobedy” business centre
AutoVAZ RUB 2.5 billion Corporate loan
FGUP “Rosoboronexport” US$ 112 million
and RUB 2.8 billion
Corporate loan
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4. Operating performance in 2008
clients in the nuclear, energy, oil, ferrous metals, telecommunications and insurance sectors. OGK-3, Atomenergoproject, Surgutneftegas, MegaFon and the Agency for Home Mortgage Lending (AHML) were among its largest clients.
The Bank increased the volume of clients’ overnight deposits 14 times year-on-year to above RUB 40 trillion (approximately US$ 1,470 million) and was active in attracting and placing corporate clients’ deposits using Reuters-Dealing and BS-Client remote dealing systems.
In 2008, VTB significantly improved its customer care in order to strengthen its position and further develop its client relationships. VTB launched several marketing campaigns to promote its commission- based products, including documentary letters of credit and bank guarantees for international settlement transactions. The Bank also successfully introduced a pilot programme to sell its products proactively to customers, aimed at improving its
customer care, shortening the decision-making process and offering the full range of the Group’s banking and financial products. VTB has established cooperation between its corporate banking and the newly established investment banking business which allowed it to offer clients the most ‘in-demand’ products and services.
At the end of 2008, the Bank opened a Centre of Financial Services, a specialised service office in Moscow for state companies, from which to serve entities such as Russian Technologies. In 2009, VTB plans to expand the services of the Centre of Financial Services to include other large state corporations. This would allow it to shorten the time required to process loans and to manage the overall cash flows of state companies.
Services for medium sized clients
In 2008, the Bank provided services to
27,470 medium sized clients. VTB’s loan portfolio of medium sized clients increased 1.5 times year-on-year by 31 December 2008.
Since 2005, VTB has offered a dedicated service model which provides standard loan products to medium sized customers at VTB head office and in branches, thus avoiding duplication. VTB also offers a wide range of banking products and services, including the structuring of sophisticated transactions. The Bank met its internal targets with regard to the growth of its medium sized regional corporate customers and grew nearly twice as fast as the rest of the Russian banking sector in 2008. The Bank made a range of improvements to its sales of credit products and advanced its risk assessment techniques. It has further developed