Vneshtorgbank is using its acquisition of Guta Bank to build up its retail services, planning more branches and aiming for a leading role in the mortgage market. By Brian Caplen.Russian state-owned Vneshtorgbank is pushing ahead on the retail front, aiming to claim an 8%-10% share of the market by 2010. During that period, total assets are expected to rise from $15bn to $35bn, including a forecast rise in mortgages from $150m to $2bn and in consumer lending from $300m to $3bn.
In recent years, there has been a rapid increase in consumer lending. At the same time, despite high average annual growth rates in this segment for the past three years (48%-50%), the market is set to expand further. The retail loans/GDP ratio is not more than 3% compared with 74% in the US, 52% in the EU and an average of 20% in the developing countries.
During the Russian Economic Forum, in April, deputy head of the Central Bank of Russia, Alexei Ulyukayev, who is in charge of Russia’s monetary policy, spoke to The Banker about the bank’s strategy. Q Will the CBR target inflation as well as the exchange rate this year? A The CBR has never publicly said it would target the exchange rates.
Russia’s ratings upgrade has caused a surge of interest in corporate Eurobonds from investors hungry for yield. Ben Aris reports on activity in the country’s bond markets.In the offices of Moscow City State Debt Committee, the body that organises all of the Russian capital’s debt issues, outsized cheques for hundreds of millions of dollars and euros hang on the wall – money that chairman Sergei Pakhomov has raised for the city.
Though such thinking is indicative of the attention bank executives are paying to their core businesses, steps are being taken that will change the playing field. Though it appears as bordering on counter-intuitive, most mid-sized banks are making a sustained push to drive up retail customer numbers as a means of cashing in on the country’s rising tide of consumerism.