Mass media about the bank

Magazine "Director". No 12. 2009.

A. Pereverzev.

The short route of "long" money.

 "The development of relations between countries depends not only on the efforts of diplomatic institutions, but also on business structures. Mutually beneficial trade is the very "bridge" that firmly connects countries with different cultural traditions. However, for a more dynamic development of such linkages reliable financial "arteries" are also needed to promote rapid payments. The Belarusian-Iranian bank CJSC “Trade Capital Bank” has become such a link between two countries. According to the Chairman of Board Andrei VERETELNIKOV, its appearance helped to multiply increase the velocity of financial flows at times.

- Andrei, to what market niche was you aimed in determining the development strategy of the Bank?

- Unfortunately, our entrance to the market coincided with the global financial crisis. Under such conditions we have to determine the development strategy for short time periods, because the situation is constantly changing. Initially the bank was positioned as a universal bank, providing services to a wide range of clients of various sectors of the economy. However we are not going to centralize resources in certain narrow segments, but will work practically in all directions of the financial market.  We are going to expand some of them. For example, trade financing is not yet popular in Belarus, while in Middle East this market segment is in great demand. Our mission is the development of letters of credit, greater use of this financial instrument for foreign trade activation.  

Besides 97 percent of shares of the CJSC “Trade Capital Bank” belongs to one of the largest state-owned banks in Iran – "Tedjarat", which in Farsi means "trade".  Thus, this word's derivative is in the name of our financial institution, so that we should promote the development of our trade relations "genetically". In the nearest future a trade exhibition of Iranian goods will be held in Belarus. Our bank is one of the partners of this exhibition.  I hope this forum will help our businessmen to set up mutually beneficial relationship with colleagues from the Islamic Republic of Iran.

As the Belarusian-Iranian bank, naturally we accord special priority to the relations between Belarusian business and the Middle East countries. This region is promising for Belarus in terms of expansion of export potential and foreign investment inflow to the economy of the republic. We hope to become the main operator for maintenance of these financial flows, not only in the direction of Belarus and CIS countries but also in Europe, because European firms operating in the Iranian market have problems with mutual settlements too. We cope with this task successfully. Thus, while before our bank appeared, a money transfer to or from Iran took 2-3 months (and you were never sure that the transaction is a success), now it takes 2-3 banking days at most.

 Nobody in the banking community of Belarus has such links with banks of the Middle East as we have. Our task is to maximize the financial turnover with this region.  Moreover, Iranian banks have excess liquidity, so they are interested in placing their funds in safe financial “havens”. From this point of view Belarus suits them fully. For example, the project of the construction of cement plant worth 200 million euros is at the working out stage, the reconstruction of the Chervenski market in Minsk is estimated at 160 million euros, 200 million euros will be used for the construction of logistics center etc. In the case of realization of investment plans, our bank will be the main "provider" on this financial field.

How did you manage to carry out initial development plans?

- So far all the tasks specified in the business plan for the first two years of activity, are almost completely fulfilled. While at creation the Bank's authorized capital was 5.2 million euros recently it has more than doubled. Increasing customer base also shows good dynamics: in a short period of time more than 100 legal entities have become our partners. Many Belarusian enterprises which have contracts with Iran, open accounts and make payments through our bank. However, we are quite careful about the clients, to live and work with in future.

Thanks to the main shareholder – the Bank “Tedjarat“- we have a good financial base. The cost of resources is quite low, so we can offer competitive interest rates in the Belarusian market, which is also attractive to customers. However, we carefully increase the share of such loans in the advances portfolio, so far it less than 10%, the majority is crediting in the interbank market. The credit program for purchasing “Samand” cars has developed for individuals; the microcredit program is at the final stage of preparation. We have attracted a subsidized credit for 50 million Euros, which is one of the largest received by the banking community of Belarus from foreign investors. Now we are considering an application for crediting the enterprise with foreign investment, which plans to build a large business center in Brest.

- How easy did you enter the Belarusian banking community?

- Here it is necessary to do justice to the National Bank of the Republic of Belarus, which pursues a truly "family-like" policy, helping new players to smoothly adapt themselves in the community that the Bank cares about. The forums held by the National Bank look more like a bankers' club, where top managers can professionally communicate, and where personal contacts contribute to the climate of trust. Besides, Belarus is a small country where everyone knows each other.

Many banks immediately opened line for us, so that we can place and borrow funds in the interbank market, and helped with the opening of correspondent accounts and entry into the market, for which we are immensely grateful. We are competitors in the market, but in work we are sooner partners. In the financial sphere mutual assistance is rather the norm; otherwise the liquidity and other indicators can be hardly kept at the proper level. So the banking environment in Belarus very friendly welcomes new players.

- You have talked about the interesting offers of credit; can you offer long-term loans to yours customers?  After all, the economy is lacking of the "long" money.

- The main problem for the banking system of Belarus is liquidity, so in conditions of the financial crisis banks is reluctant to make long-term borrowing. But thanks to our major shareholder, we are able to provide corporate customers with borrowed funds up to 7-10 years. According to the development strategy next year we will increase this terms in 1,5 times. We plan to multiply the capital in 3 times at least, and the resource base – in 2 times. We also don’t except work with individuals, we are now preparing such a product as mortgage lending, which will be started next year. In this credit market we will move cautiously, constantly analyzing the situation. We have a task to enter the top ten banks in the country in terms of capital and in the top five – of assets. We will work with both individuals and with legal persons. However, individuals' funds are very expensive, so they should be attracted with caution not to "overheat" the Bank spends on deposit payments, moreover, we have the possibility to use cheaper resources of the main shareholder. So we will choose the most optimal and reliable way of development.  You know, it is necessary to work with the outsider money as carefully, as with the own one.

- Analytical Weekly "Belarusian Market"

Belarusian Market

No 38 (822), 22 - 29 September 2008

OJSC "Belarusian Currency and Stock Exchange"