Business segments overview

Corporate business

We are proud that once having availed of our services, our clients not only stay with us for many years but are also glad to recommend Bank Vozrozhdenie to their partners.

Lyudmila Goncharova
Deputy Chair of the Management Board

Banking services for corporate clients is a traditional and key business segment for the development of Bank Vozrozhdenie.

In the corporate business segment, the strategic focus is on providing services to SMEs. Bank Vozrozhdenie places a particular emphasis on an individual approach to each client, the provision of a full range of services and the continuous improvement of the quality of such services.

In its work with large corporations, the Bank aims to service the clients with a developed branch network whose operating regions coincide with the locations of the Bank’s branches. A separate segment in corporate business is the provision of financial services to government institutions.

The Bank adheres to a strategy of providing a full range of banking products, offering its customers, in addition to the traditional cash and settlement services and lending products, such services as cash-in-transit services, payroll services and corporate cards, deposits, factoring, trade finance, services for staff of clients, etc.

The key task that the Bank performs on a daily basis is to respond quickly to the business needs of its clients, through maintaining a balance between the profitability of operations and associated risks. To resolve the first issue, the Bank maintains a regular cooperation with various institutions that support entrepreneurship. To resolve the latter, the Bank continuously develops and improves its system of risk management.


Corporate lending in 2013 was influenced by the slowing economy and low industrial output growth. Decelerating loan demand was one of the leading trends in the corporate segment. Additionally, there was a notable toughening of competition in lending to medium-sized businesses. The sector structure of the corporate loan portfolio remained unchanged in 2013 - the main share was taken up by lending to enterprises operating in the real sector of the economy.

In 2013, the Bank has set the following goals in the development of corporate business:

  • to expand its client base and increase market share through working with highly profitable and financially stable SME clients
  • to reduce the concentration of the loan portfolio, increasing the number of borrowers and maintaining high credit quality
  • to increase the efficiency of servicing each corporate client
  • to maintain a high level of customer loyalty

Sector structure of the corporate loan portfolio

Regional structure of the corporate loan portfolio

Client base

Despite the weakening of the Russian economy, active work of the branches of the Bank on attracting new clients ensured the growth of the client base from 3.3% to 13.2% depending on corporate business segment. However, in the segment of “minor clients” the number of customers decreased due to changes in tax legislation, which led to the cessation of activity of a number of small legal entities and individual entrepreneurs. Another reason for such a decrease was the work of the Bank to clean up its client base from customers that do not meet the Bank’s requirements with regard to the identification and observance of legislation on counteracting the dubious operations, or clients that had already ceased their activities.

The Bank focused its work on development of relations with corporate clients in the following areas:

  • active work on attracting mass-market clients for providing cash and settlements services
  • development of remote services “Client-Bank” and “Internet-Bank” for companies and a set of associated products - “Direct Money Deposit to the account”, corporate bank cards, customs cards
  • the improvement of the quality and reliability of remote banking system by launching the fraudulent transactions combating system “Antifraud”
  • the creation of an institute of regional directors, to enhance corporate sales in the regions where the Bank operates

Client funds

Throughout 2013, the corporate deposits market saw a rates increase. Despite this, the average interest rate of the portfolio declined throughout the year due to the changes in the maturity of the deposits and a higher share of short-term resources. Throughout the year, the Bank had adjusted its deposit interest rates with due regard to market changes.

During 2013, the plan of attracting corporate customers’ resources was successfully over-fulfilled. As a result of that, as of 1 January 2014, the volume of deposits raised from corporate clients was 2.1% above target, while the average interest rate on the portfolio remained below planned (7.4% vs 8.1% planned).

The greatest share of the corporate deposits is in Russian roubles, with foreign currency deposits accounting for less than 10% of the total volume. The most significant share (about 76%) in the structure of corporate deposits is represented by funds of companies from financial, manufacturing, trade and service sectors.


Throughout the year, the Bank has been paying significant attention to development of factoring, an important part of corporate business. Closely tracking market needs, the Bank moved swiftly to improve the products offered to clients. Thus, in 2013, the Bank developed and implemented new solutions aimed at reducing the document flow and accelerating the provision of financing on factoring transactions. By the end of 2013, the factoring portfolio had grown by more than 60%. The Bank offers factoring services not only to its customers, but also to their suppliers and buyers, as financing the entire business chain under a single credit institution is mutually beneficial for both parties of the transaction. The Bank has a wide client base on factoring operations, including sellers and producers of food products, packaging materials, household appliances, electronics, construction materials, as well as logistics companies.

Cash and settlements service

The cash and settlement service is the fundamental basic product for all clients of Bank Vozrozhdenie. Servicing daily companies’ needs, ensuring convenient service, information security and reliability of settlements continue to bring stable fee and commission income for the Bank.

In 2013, only 18% of total commission income came from large companies, while SMEs made up a total of 67%. In 2014, it is planned to further increase the share of SMEs in the structure of fee and commission income from corporate business to 68%.

Remote channels

An important aspect of further progress of the corporate customer segment is the improvement of remote service channels in accordance with the growing requirements of customers, as well as the development of technology. In 2013, the proportion of clients who use the products of remote banking service increased to 57.6% of the total number of active clients. The share of payments made through remote channels in the total number of clients’ operations grew by more than 2% and reached 84.7% of the total number of transactions. The most popular products of remote banking services were “Internet-Client” and “Corporate Control”.

In 2013, the Bank successfully completed a pilot project and implemented remote payments service “Personal Account” for the customs card “Round”, which allows companies to remotely carry out customs payments.

In 2013, the company introduced a new system Antifraud-analysis, which significantly increased the level of client payments’ safety. For convenience of clients, a new service of SMS/email-notification was introduced for customers to receive information about delivery and execution of their payments. To speed-up and improve the quality of technical support on remote service channels, the Bank centralised the requests processing in a single call-center. In the near future, the Bank plans a transition to a new version of Remote Banking Service that will afford the client to send to the Bank all the documents for accessing new services (deposits, currency transactions, and so on), and will enable bilateral signing of agreements through use of electronic signatures, and will increase the security of payments.

The growth in commissions for settlement services in 2013 has been 8.7% for Remote Banking Services – 51%.

Dynamics of the number of installed systems, Client-Bank,
quantity, pcs

Dynamics of the volume of transactions through remote channels, million transactions

Corporate Cash-in-transit

Cash-it-transit (CIT) is one of the key products for companies actively dealing with cash, which allows the Bank to attract a large number of clients. In addition, the Bank has considerable experience in servicing clients with a wide geographical presence, taking advantage of its own branch network.

In 2013, the Bank continued to work successfully and extend cooperation with such large clients as the hypermarket network “Hyperglobus”, the pharmaceutical holding “ORIOLA” (network of pharmacies “Starij Lekar”, “03 Apteka”), SC “Simple”, “TD “Megapolis””, “Formula Dostavki - Regions”, OJSC “VimpelCom”, the shopping network “Gloria jeans”, “Vester”, SC “Modus” - the largest network of car dealers and service centres in the South of Russia, SC “Amethyst”, “Soyuzdorstroy” LLC among others.

At the same time in 2013, the Bank actively worked on diversifying its client base away from large customers by attracting SME clients.

In 2014, the Bank plans to optimise its CIT service to reduce the costs and minimise inefficient car mileage. In addition, the Bank intends to attract new customers through the introduction of convenient mobile solutions for collection planning, use of modern infrastructure for cash transportation and efficient logistics planning.

Work with large corporate clients

As a result of the implementation of the corporate strategy, the number of large corporate clients of Bank Vozrozhdenie in 2013 increased by 20 companies.

In 2013, the Bank continued its cooperation with such large clients as FSUE “Russian Post”, GUP MO “Mostransavto”, GUP MO “Mosoblgaz”, GUP MO “Moscow regional travel centre”, GUP MO “Kolomensky Avtodor” and other major companies of federal and regional significance, for many of which the Bank provides complete and high-quality service on settlement and cash services, CIT, payroll projects, as well as supporting limits on lending and issuance of guarantees for participation in auctions for government contracts.

During the year, the Bank started cooperation with a number of new clients, among which are LLC “Mosenergosbyt - Uniform information and accounting centre”, which should become the basis of a single, centralised information system for the collection and processing of utility payments, one of the oldest and largest companies of the Russian pharmaceutical industry JSC “Moskchempharmpreparaty named after N. A. Semashko”, the leader of the construction market of Moscow the group of companies “Mospromstroi” , implementing projects in construction and reconstruction of industrial buildings, social services properties, housing construction, as well as with the company “SPT” (Charoen Pokphandfoods), which is part of international company Charoen Pokphand Thailand, the world leader in pork production, the world’s largest manufacturer of aquaculture, animal feed and other products, present in more than 20 countries of the world. In addition, the Bank started cooperation with one of the leading TV companies on the media market of the Moscow region LLC“TV Channel of Moscow region”.

Small and medium sized enterprises

SMEs have historically been the key segment for Bank Vozrozhdenie. The strategic priority for the Bank is to create the most comfortable conditions for providing financial services for SME companies.

In the reporting period, the number of SME clients increased by 631 companies compared to 2012, with the number of borrowers increasing by 323.

In 2013, the Bank focused on the following projects, aimed at supporting SME companies:

  • SME lending using the resources of OJSC “SME Bank”
  • SME lending using the resources of EBRD
  • lending to micro- and small enterprises as part of the “Microbusiness” programme, in collaboration with the Fund for supporting small business of EBRD. The project is implemented on special terms and conditions for provision of credit products within exclusively approved lending procedures, collateral policy and monitoring procedures.

Within the programme of financial support for small and medium enterprises, implemented jointly with “SME Bank”, the Bank provided loans for a total amount of over 22 billion roubles in all regions of its presence. Under this programme, financing is offered for a term up to 7 years at a rate not higher than 12.25% per annum. Special purpose loans aimed at financing of investment projects for modernisation of production and introduction of innovations were particularly popular among the clients.

In the reporting period, the Bank monitored the projects, funded for a period of under 5 years, using $35 million and $16 million lending facilities raised in 2009 from the EBRD and its Russia Small Business Fund, as part of the agreement with EBRD related to the support of SMEs and micro-enterprises.

Dynamics of the number of SME borrowers, quantity, entities

Dynamics of the micro loans portfolio, RUB billion

The Bank continued the implementation of a specialised “Microbusiness” programme, launched in the framework of cooperation with the EBRD and focused on providing sustainable access to financing for micro and small enterprises. Over 2013, the number of branches involved in the programme grew to 19 from 7. In total, as part of the “Microbusiness” programme, clients were provided with 541 loans for a total sum of 1,225 million roubles, while the total loan portfolio of the programme as of December 31, 2013 amounted to 1,150 million roubles. The Management Board has approved a development plan for the “Microbusiness” programme, according to which the number of branches engaged in the programme should grow to 28, while the loan portfolio should reach 4.5 billion roubles.

Bank Vozrozhdenie, as one of the leaders on the SME lending market, traditionally participates in the development and discussion of new mechanisms of state support. In August 2013, a federal guarantee mechanism was launched, which enables small- and medium-sized companies to realise larger investment projects with greater ease. We were the first in the country to offer a loan using a guarantee of SME Bank.

In 2013, we continued cooperation with regional guarantee funds, helping the Bank’s customers in the SME segment to solve the issue of lack of liquid collateral by providing its guarantees. At present, the clients of the Bank can use funds’ guarantees as part of collateral in 15 regions of its presence that creates additional opportunities for successful development of small businesses.

At the end of 2013, the volume of guarantees issued by the regional SME lending guarantee funds and accepted by Bank Vozrozhdenie, exceeded 1.65 billion roubles, which allows us to provide additional lending of over 3.57 billion roubles to SME clients.

Dynamics on the number of loans, provided on the “Microbusiness” programme,
quantity, loans

Dynamics of the number of regions involved in the “Microbusiness” programme,
quantity, regions

“Russian Sort” is a meat-processing factory in Moscow Region, Shelkovo District, Petrovskoe hamlet. Despite being a relatively small family business, for over 10 years we have been supplying the capital with the best sausage products on the Moscow Region market, including working with such prestigious retail chains, as “Azbuka vkusa”. We launched our own farm and continuously try to improve the quality of our products and maintain stable growth. All of this became a reality because of Bank Vozrozhdenie. It is not only our business, but nearly every small business that has the same problems in receiving loans and financing for business development, for equipment modernization, having not enough liquid collateral to guarantee the loan. Bank Vozrozhdenie offered us a special purpose investment loan “FIM-tselevoy”, as part of the state programme aimed to provide favourable conditions for purchasing of modern equipment. The project is currently at the stage of implementation. While at the moment we are able to produce 150-160 tons of sausages per month, then after working space is expanded and installation of our newly purchased equipment is completed, we are going to be able at least to double our production! It was truly pleasant to find support from Bank Vozrozhdenie, as often, large financial institutions are indifferent to the demands of small businesses like ours. This bank, on the other hand, creates favourable conditions for business expansion. Particularly important for me is that all employees of the Bank, from top management to bank tellers, are always friendly and treat each project as a child of their own. They are truly interested not only in the success of their clients, but in each case particularly. The Bank frequently organises interesting and unordinary events for the clients, which sometimes take place in such places of interest as the Tretyakov gallery, or in a form of a boat trip on the Moscow river and more… All of this gives clients a favourable view of the Bank, gives an opportunity to build business relationships based on trust, that is very important for us.

Tatyana Eremkina,
Director General and Founder
OJSC “MPP Russian Sort”
“Secret Firmy” magazine, N11 (336) - 2013

Retail business

We develop retail business by increasing the yields and expanding the loan portfolio, as well as improving the infrastructure of the bank cards service.

Evgeniy Dmitriev
Head of Retail Business Department

The retail business is the second priority segment for Bank Vozrozhdenie.

Bank Vozrozhdenie aims to continuously develop the retail segment by increasing profitability and volume of the loan portfolio, and improving the service infrastructure for bank cards. The main credit products for the public are mortgages and consumer loans. While expanding its loan portfolio, Bank Vozrozhdenie is conservative to maintaining the optimal balance between its yield and quality.

The second important area for the Bank’s retail business development is attracting funds from the population. Since private deposits and current accounts are the key source of funding assets growth, the Bank aims to maintain the share of retail funds as a percentage of its liabilities at the level of not less than 50%.

The main objectives of the retail business of the Bank in 2013 were:

  • The preservation and strengthening of positions in all areas of retail banking, the increase of loan and deposit portfolios, as well as growth of non-interest income of the Bank
  • Development of sales technologies
  • Maintaining the quality of the retail loan portfolio
  • Developing and maintaining long term relationships with clients and partners of the Bank
  • Ensuring high levels of financial and operational efficiency

Throughout the reporting period, the client base of the Bank expanded significantly:

  • The number of borrowers in the mortgage segment increased from 15.8 thousand to 19.6 thousand individuals
  • In the consumer lending segment - from 35.9 to 48.2 thousand individuals


Mortgage lending has been the most dynamic segment of retail lending in recent years. To enhance the client base of mortgage borrowers, the Bank actively cooperates with partner organisations - real estate brokers and developers, working in the same regions as the Bank.

A relatively neutral economic backdrop over the first three quarters of 2013 contributed to continued growth in mortgage and consumer lending.

In the course of 2013, the retail loan portfolio of the Bank expanded by 30%. The mortgage lending portfolio, including securitised mortgages, widened by 32%, while the portfolio of consumer loans and car loans grew by 30%.

The mortgage product line of Bank Vozrozhdenie includes loans for apartment purchase in the primary and secondary markets, purchase of country property for construction of private houses, purchase of apartments with the subsequent financing of renovation, as well as “social mortgages”. However, the Bank has traditionally been most successful in the provision of mortgages for the purchase of apartments on the stage of development - through share participation in construction of apartment blocks (primary market).

In 2013, the popularity of our mortgage loans was supported by improved credit terms and conditions prevailing throughout the most part of the period, and the active participation of the Bank in partnership programmes with constructors and developers, as part of which more than 80% of the Bank’s mortgages were issued. As a result of work in the first half of 2013, the Bank was among the top five banks by the volume of mortgages issued on the primary market.

Bank Vozrozhdenie offers consumer loans largely to employees of companies using payroll services of the Bank and government organisations, as well as to clients of other large banks, who have a positive credit history and reliable sources of income. We provided 29,126 consumer loans for a total amount of over 8.4 billion roubles throughout the year (a 44% increase versus the previous year).

The public demand for retail products generates a stable stream of non-interest income, for 2013 it amounted to 1,056 million roubles.

Structure of operating income from the retail business,
RUB billion

including bank cards

Dynamics of retail loan portfolio,
RUB billion


In 2013, we were as usual active in attracting individual deposits, using such tools as adjusting deposits interest rates, introduction of new deposit products, and upgrading the technological base.

  • I quarter 2013: we increased interest rates for several 12 and 18 months deposits in Russian roubles, and reduced interest rates on foreign currency deposits for all maturities and types of deposits (excluding deposits for VIP Clients)
  • II quarter 2013: the Bank increased interest rates on 6 and 12 months deposits in Russian roubles
  • III quarter 2013: we reduced interest rates on 3, 6 and 12 months deposits in Russian roubles
  • IV quarter 2013: the Bank reduced interest rates on 18 and 24 months deposits in Russian roubles

In 2013, we systematically optimised the line of deposit products, by abolishing a number of previously existing deposit types and introducing new ones, including:

  • “Vozrozhdenie – Privileged”
  • “Vozrozhdenie – Privileged +”
  • “Vozrozhdenie – Income with monthly payments”
  • “Lucky strike”

In the fourth quarter of 2013, the Bank decided to curtail the practice of changing seasonal deposits due to the fact that such a characteristic as seasonality, ceased to be a distinctive feature from the point of view of marketing communications.

The overall increase in the portfolio of retail deposits amounted to 5.8 billion roubles (under RAS), while the stream of new client deposits reached 9.8 billion roubles, and the portfolio of old customers’ deposits declined by 4 billion roubles. However, the savings of payroll services users grew by 1.1 billion roubles.

In 2014, we continue to work on attracting new private clients, with a focus on improving the accessibility of operations on placing deposits (the possibility of placing a deposit via all remote sales channels), the introduction of additional options on interest capitalisation, partial withdrawal/replenishment of deposits, and on offering interest rates appealing to the clients.

Term structure of retail deposits

Dynamics of retail funds, RUB billion

Money transfers

Over the past ten years, the Bank has been actively developing the money transfer services for private clients. Currently, our customers can transfer money from more than 120 offices of the Bank. This service is provided in partnership with international payment systems, including Western Union and CONTACT.

The volume of transfers made by the clients is relatively stable and amounts to approximately 5 billion roubles per year.

In 2012, to encourage the expansion of this business we planned to expand the list of payment systems partners.

Client Service

In 2013, the Bank has implemented a number of innovations to improve the quality of customer service:

  • All branches have adopted extended work schedules, working without lunch breaks
  • Over 50 additional self-service terminals were installed
  • The Bank defined unified standards for staff relating to direct customer interaction
  • The system of motivation for employees was adjusted to reward quality sales
  • Over 300 Bank Vozrozhdenie managers attended full-time study courses on the “Sales in the retail business of the Bank” programme

In addition, to improve the quality of payment services, during 2013 we expanded the payment terminals park to 106 units against 57 installed as of the end of the previous year. A significant part of self-service devices is located at public organisations whose customers have an urgent need of making payments at the place of public services. During the reporting period, through our terminal network more than 1 million payments for the amount of 1 billion roubles were made, a growth in the number of transactions by 25% versus 2012.


The development of cross-sales within the retail business is a strategic priority of Bank Vozrozhdenie. We were pleased to see the positive dynamics in this area in 2013.

For the implementation of cross-selling, the Bank’s sales managers used the following techniques:

  • Site-visits of managers to companies with marketing materials
  • Centralised client communications (telephone marketing, SMS-broadcasts)
  • Offering unembossed credit cards to clients
  • Personal work with clients, when they visit an office of the Bank

As a result, over the year the number of active clients using two or more products increased by 12%.

Bank cards

Bank cards business is the key driver to the cross-sales development in the retail segment. A bank card is a tool to increase the number of banking products sold to each customer. The accessibility of financial services to the public is provided via the development of infrastructure and the expansion of the remote sales channels use, in particular internet and mobile banking, ATMs and payment terminals. Via a single interface of remote channels, with the Bank Vozrozhdenie bank card our customers can carry out any type of a remote payment, deposit funds, repay loan instalment and carry out operations between their own accounts.

In 2013, the Bank achieved the following significant results in the bank cards business:

  • Growth of credit cards issuance
  • Expanded credit turnover on payroll accounts
  • Increased net fee and commission income
  • Growth in the volume and number of bank cards operations
  • Increase in the number of payments through ATMs
  • Development of the ATM network and the acquiring service infrastructure


In 2013, the Bank launched co-branded Visa cards “The whole world is with you” in the framework of a loyalty programme, run in conjunction with the online booking portal A cardholder, when paying for everyday purchases with “The whole world is with you” card, would become a participant of the loyalty programme and could earn miles on each operation. “The whole world is with you” card, unlike most airline bonus cards, allows to spend the accumulated miles on a wide range of tourist services presented on the website By implementing this project, we expect to increase the loyalty of the Bank’s clients, to intensify non-cash card payments and to attract new customers.

Credit cards

In 2013, the Bank implemented a project of single-contact sale of credit cards. In the framework of the “Unembossed card for payroll customers” project, the client together with a payroll card had an option to get an unembossed card, in case of his consent. After a positive decision regarding the assessment of customer credit risk, a credit limit of 15 thousand roubles would be set to the card account. In the case of a negative decision, the client would be able to use the card as a simple debit card, for example, for online payments.

To improve the competitiveness of its credit cards, the Bank introduced an option of a deferred commission, whereby a credit card fee would only be charged after performing the first operation on the account. Additionally, welcome rates for the first six months of card use were implemented, that allowed customers to use credit card on favorable terms as a spare cash reserve, that does not require any payment prior to activation.

Dynamics of the volume of bank card transactions per year,
RUB billion

excluding opening of deposits

Dynamics of the number of ATMs, ATMs

Dynamics of the number of credit cards, credit cards

Dynamics of credit turnover on rouble client accounts for the year, RUB billion

Remote service channels

In the implementation framework of the Bank’s strategy, we continued the active development of remote services. During the year, we launched a new online banking interface and a mobile application for iOs and Android. At present, the extended functionality of the service “Vbank with you”, including internet and mobile banking, allows transfers of funds from a customer’s card in real time between the same currency cards/accounts of one or different clients. It further allows money transfers in Russian roubles to Visa and MasterCard cards issued by other Russian banks using only the card number for arranging a transfer. New functionality of ATMs and payment terminals provides options of transfers, access to information on deposits and loans, a possibility of adding a deposit by cash, as well as cash transactions, without using bank cards.

In 2013, the Bank, in partnership with Visa, undertook activities aimed at changing the behaviour of clients while shopping and using external services. Joint marketing campaigns, such as “You can increase your salary!”, “The visa will pay for your gifts!”, “Pay abroad”, among others, helped to motivate clients to use bank cards while paying for goods and services more actively.

In 2014, the Bank will continue further development of remote customer service channels, while launching new loan products. Also, we plan to work on the new projects aimed at increasing customer loyalty. By the end of 2014, the Bank intends to increase the number of customers in this segment threefold, in comparison with 2012.

Bank card statistics for 2013

January 1, 2013 January 1, 2014 %
Number of debit cards Thousand cards 1382 1315 −4.8
Number of credit cards Thousand accounts 47 64 +36.2
Number of clients using the «Vbank» service Thousand clients 790 795 +0.6
Credit turnover on rouble card accounts per year Billion RUB 186 195 +4.8
Average total balances on the card accounts per year Billion RUB 17.67 19.11 +8.1
Number of bank card operations per year Billion operations 71.22 77.49 +8.8
Volume of bank card operations per year Billion RUB 200.6 216.79 +8.1
Volume of ATM customer payments per year Billion RUB 4.17 4.39 +5.3
Transaction volume on the Bank’s POS-terminals Billion RUB 12.6 18.24 +44.8
Скачать таблицу в формате xls

Dynamics of the number of bank card transactions for the year,
million transactions

Dynamics of the volume of customer payments through ATMs for the year,
RUB billion

excluding opening of deposits

Dynamics of average total volume of account balance for the year,
RUB billion

Dynamics of the number of ATMs with a cash-in function,

Banking technologies

The recognition of our Bank by the Federal Treasury as one of the best banks to work with the GIS GMP system is another confirmation of our responsibility for 1.7 million private clients, but also for those who live and work in our operating regions.

Tatyana Bondareva
Operations Director

The Bank continuously develops its banking and IT systems, considering them as essential components for growth of operating efficiency. Optimisation and centralisation of operational functions should be implemented on a stable and high-tech platform. Therefore, we focused on our activity in the sphere of technologies in 2013 to strengthen the stability of our systems, optimise existing IT resources and introduce new technologies. Great attention was paid to the issues of systems security and security of settlement transactions, reducing the risk of fraud-related losses.

In 2013, the Bank defined the main directions of technological systems’ development and initiated projects, that support the operational activity optimisation processes and development of customer service technologies.

In order to ensure the optimisation of processes, numerous systems were introduced and elaborated including the system of centralisation of personnel records, payroll accounting, automatic payment processing, connection to the System of electronic interaction (SIEI) in the framework of cooperation with the State information system for state and municipal payments (GIS GMP) and the Federal bailiff service.

In preparation for the migration of RBS systems from BS-Client 17.3 to BS-Client 17.9, a transition of mainstream customers with classic AWS (workstation) “Client-Bank” to the AWS “Internet-Client” was conducted. The banking part of the SMS/email-information system for clients was activated, and clients were gradually added to the system. A system for Fraud analysis was also activated, significantly increasing the effectiveness of combating fraud.

The remote customer service systems were dynamically developed since the launch of the specially designated FinStream platform.

Additionally, a “Factoring” module was developed, that allowed automating the support of factoring transactions.

The implementation of most of these changes enabled the Bank to enter the active phase of a global project to optimise its operating model.

The strategy of this project is based on the principles of efficiency and a focus on the business requirements of clients, namely:

  • Centralisation and consolidation of operational functions in a single unit (Operations center)
  • Standardisation of similar processes, their optimisation and automation
  • Universalisation of staff to ensure interchangeability, while maintaining an acceptable level of operational risk
  • Optimisation of staff number
  • Ensuring that the level of service and client support matches the business needs
  • Improving client service standards (reducing the number of errors and increasing service speed)
  • Focus on customer needs

A component of the operating model optimisation project is the centralisation of operational functions and creation of a vertically-itegrated operating stream, which, in turn, leads to operational process optimisation as well as to provision of the greater transparency.

The centralisation of operational functions implies a shift from a geographically-distributed to centralised scheme of operations support. The implementation of this would enable us to significantly reduce operations costs, increasing the transparency of operational processes and improve their adaptability to changes. It is the most resource and labour intensive processes that are first to be optimised. The following activities were planned for centralisation in 2013:

  • opening/closing accounts of companies, individual entrepreneurs and individuals engaged in private practice as well as keeping their files in digital format
  • client cash and settlement service
  • currency control
  • the creation of a first line of customer support in relation to the Client-Bank system use

As a result, the following projects were successfully completed:

  • In the framework of creating a universal front line of customer service in branches, the technology for serving individuals by a single front line officer was implemented throughout the most of the Moscow and Moscow region branches
  • the front line of customer support in relation to the Client-Bank system use is processing calls of all clients of the Bank
  • a technology of automatic processing clients payment orders coming through the remote banking service system was implemented
  • the centralised processing of the electronic requests of the Federal Bailiff Service and offices of the Federal Tax Service, as well as the requests of clients received through the remote banking service was launched (pilot project in progress)
  • a centralised system of handling orders of tax authorities on the suspension of or cancellation of the suspension of transactions on the client accounts was lanched (pilot project in progress)
  • pilot projects for the centralisation of customer accounts opening and for foreign currency operations control were launched

We expect to see the first fruits of the implemented changes in 2014, in particular reduction in the numbers of branch staff. We also expect that they will contribute to increasing the amount of time the operating staff can devote to providing advice and personalising customer service, as well as reduce operational risks.

In the coming year we plan to pay particular attention to the separation of the functions of accounting and operations processing, building the operating model of front-line sales, creation and implementation of a single standard for electronic file of a corporate client and reformatting the Bank’s sales network.

Financial markets

A priority for Bank Vozrozhdenie on the financial markets in the reporting period, was maintaining a diversified structure of the securities portfolio in order to keep a high level of liquidity, reduce risk and increase the return on assets. In 2013, the Bank focused on operations with debt instruments and on the interbank lending market.

Securities market operations

Securities transactions were carried out on the MICEX stock exchange and the OTC market. The average trading volume of the securities portfolio in 2013 was 11.5 billion roubles.

Debt market operations

During the year, the highest volume of transactions of Bank Vozrozhdenie in debt instruments was concentrated on the sectors of government bonds and high-quality municipal and corporate bonds, denominated in roubles and foreign currencies, since these types of investments could provide an optimal balance of profitability, reliability and liquidity. The Bank’s portfolio consisted of corporate bonds of “quasi-sovereign” debt, securities of high-quality companies and municipal bonds with a put/maturity of up to one year. When forming the securities portfolio, the Bank was guided by the Lombard list of the Bank of Russia.

In order to manage liquidity, reduce the risk and to bring additional revenue, the Bank participated in the “reverse” REPO market in 2013 using Federal Loan Bonds (OFZ) issues, sub-federal and municipal bonds and high quality corporate bonds as collateral when providing funding.

Stock market operations

On the stock market in 2013, the Bank conducted operations with the first-tier shares of Russian companies, operating mostly in the natural resources sector. Meanwhile, share transactions are not a priority area of the Bank activity on the securities market.

Interbank lending

In 2013, the Bank remained an active participant of the interbank lending market, placing funds in both roubles and foreign currencies. Interbank loans were provided under unsecured credit lines, opened for first-tier banks, as well as under the collateral of high quality assets. In October - November 2013 the Bank was engaged in direct REPO transactions with the Bank of Russia, in order to manage liquidity issues.

The investment operations of Bank Vozrozhdenie in 2014 will be focused on maintaining a diversified structure of its securities portfolio. We will continue carrying out operations with government securities, including sub-federal and municipal bonds, whilst monitoring their compliance with the Lombard list of the Bank of Russia.

As a tool to regulate liquidity we expect to actively use investments in government bonds and bonds of highly ranked companies. In addition, we will continue to work on the interbank lending market.

Trade finance

In 2013, the Bank raised funds of foreign banks to finance foreign trade contracts of the Bank’s clients. Funds were attracted in the form of separate long-term loans within the framework of bilateral credit facilities with foreign banks. During 2013, we made seven of such deals for a total amount of about $7.2 million, under insurance coverage of the national export agencies (NEA) of Germany, France, Switzerland and the Czech Republic.