OREANDA-NEWS. October 29, 2009. Fuad Abdullaev, Chairman of the Board of IBA-Moscow has also told about successful operations of the bank on Russian market during global financial crisis, reported the press-centre of IBA.

- Most of 2009, the year of crisis has passed. It was a very complex period for banks. How IBA-Moscow performed during all these months?

- In general, we have gone through 9 months of 2009 successfully and most importantly, avoided any shaking. Moreover, bank could make improve some of its main financial indicators as compared to 2008. I will bring some examples. By results of the first six months of 2009 the assets have grown for 5.2% compared to year start and have reached the level of 10 374 mln. roubles, the credit portfolio has increased for 6.2% to 8 139 mln. roubles. Net profit on incresing results from the year start has reached 29.9 mln. roubles. Bank traditionally has the large corporate loan portfolio of 7 245 mln. roubles (as of the end of 2nd quarter).

IBA-Moscow actively finance the projects of its corporate clients, performs funding of current activities of successful and stable companies from various sectors of economy, provides the resource support on performance of various export and import operations between the Russia and Azerbaijan. It is obvious, that during previous years our development dynamics have been more impressive. But, developing plans for 2009, we have taken into consideration the serious changes in operational environment and understood clearly, that development pace of previous years could not be kept. Therefore, the main goal for 2009 was to stand, maintain existing positions and make a step forward, even small. By the way, the overdue debt on credit, which is the main problem today for many banks and gives significant headache to Central Bank, in our bank is at level of 1.5% (at average market value of 8-10%). IBA-Moscow, according to assessments of the National Banking Magazine has entered the list of 30 most stress resistant Russian banks, which are most successful with resolution of problems caused by the global financial crisis.

We always had and always will base on the position that the main support for any business, especially in crisis are his clients and partners. IBA-Moscow, which has positioned itself over the years of operations as a reliable business partner, continuously improves its services, develops new and customer demanded directions of the banking business, such as: trade and export finance, documentary operations.

IBA-Moscow team acts on the basis of the Strategic Development Plan (it was adopted at the end of 2007 for 3 years period), the main goal of which is entering the listing of 100 largest Russian Banks on main financial indicators. And we move continuously to this target. I can say, that in accordance with popular RBC rating, the IBA-Moscow, by the results of first six months of 2009 has held 155th position for assets and 139th position by credit portfolio, 119th position by credits to legal entities, 231st position by capital. IBA-Moscow holds 189th position in the listing of TOP-300 universal banks and 105th position for the return on assets.

- What do you think of the measures taken by the Russian Government and Central Bank on overcoming the consequences of the crisis?

- I would say that the world crisis has provoked the cirsis in Russia with its specific national peculiarities and these are comething that government and Central bank shall struggle. In this where found problems that could not be resolved overnight even if very wanted. Actually, the fundamental restructuring of all economy is required, with reduction of dependence from exports of natural resources, modernisation and innovations. Several times, highest officials of the state have mentioned these. I shall say that the main achievement of the government and Central Bank of Russian Federation was the capability to save the banking system, avoid serious crisis occurrences in this area and panics of customers. Bankruptcy of large banks, collapse of the interbank market, panics of depositors could have destructive effects for entire economy.

Of main effective measures shall be noted the support of liquidity of banks, allocation of funds to add to capital, support of the stable exchange rate of the rouble after the controlled devalvation period, increase of the amount of insurance on individual deposits, support in search of investors for the problem financial institutions. At this time the measures are adopted to reduce the cost of resources via reduction of the re-financing rate, which is extremely important for financing of economy. Representatives of the Central Bank are strong in responding the irresponsible call on further devalvation of rouble, which will result in significant problems and actually will throw back the economy.

- What you see as main risk and what are the plans of your company to handle it?

- Complications in the banking sector are possible, resulting by increase of the overdue debts, critical reduction of the capital of banks due to requirement to develop additional reserves. Several banks may face problems with supporting of liquidity, as there is a problem with resources, which are either very expensive or non-accessible. Also, there are not experts today, capable to provide the clear forecast for the sufficiently long-term: at least haf to one year. And this is a main complication. How long the crisis will last? For which period the reserves shall be planned? How crisis will impact various sectors of environment and how the representatives of these sectors, which are the clients of various banks will influence these banks? Our bank was traditionally conservative in its lending policies.

Overdue debts within our credit portfolio are at minimum level, as I mentioned earlier. But we try to take into consideration all circumstances. At this time we increase the share of lending in roubles, which is more beneficial for our customers, more carefully perform the debtor business screening. This year, reducing risks, we deliberately avoid increasing the size of credit portfolio, paying attention to its quality. Our immediate plans include the further increase of capital for the provision of additional stability and to fit the increase of operational volumes.

I call my employees to take all efforts to increase the incomes from commission, which will help the bank to diversify its business. Just like other banks, we carefully control all costs, which provide significant savings. In this, we did not have any staff downsizing or reduction in wage payments. I would like to note that several units of the bank, realizing current difficulties, take additional work volumes not raising the issue of additional recruitment. And such behaviour is very pleasant.

- The main problems of banks these days are the liquidity and filling of the resource base. How things are at IBA-Moscow in these areas?

- During previous years we traditionally performed the borrowings from international capital markets. In August of 2009, the IBA-Moscow in accordance with provisions of the contract, fully and timely repaid the syndicated loan at the amount of 55 mln. USA. Now, the work is being done on attraction of the new volume of funding.

We also count on customer resources, volumes of which increase continuously. In the RBC rating by results of first six months the IBA-Moscow takes 197th position on the volumes of deposit portfolio of legal entities and 246th position by the volume of total deposit portfolio. In this, over the year growth was recorded at 80% on these two positions. In the bank are developed continuously the special interesting proposals for the clients on allocation of resources, advertisement campaign are held. These efforts bring adequate positive results.

Resources of the parent bank also remain accessible to us in the volumes required, but IBA-Moscow tries to resolve funding issues independently, using its own reputation and resources.

- There are permanent or temporary residents from Azerbaijan living in Russia. And therefore, one of the most demanded retail services of IBA-Moscow is the money transfer. What is happening on this market currently?

- The volume of money transfers serviced by our bank has increased in 2008 for 14% to 113 mln. USD. The total number of transfers was 67 thousands. There are about 14000 permanent customers of the bank on this service. In 2008 to improve the customer services the complex of additional servicing of money transfers (operational name IBA-Express) was commissioned, which could be regards as prototype of own system of international money transfers, within which the IBA-Moscow will function as clearing bank. To diversify the business of the bank, also proposed to customers the money transfer operations to any part of the world via Contact and Migom systems.

Money transfer market has seriously suffered from crisis. It is obvious that most transfers are done by the labour coming from CIS countries. Some of them had to leave Russia, others had reduction in incomes. Looking at our bank, we shall say that over first 3 quarters of 2009 the number of transfers has not decreased significantly, but the volume has reduced considerably. Before we had a client who came with us with his money earned in Russia, for instance, 10000 roubles, which he exchanged to hard currency and sent home. It is easy to calculate how much it was last year and what it is now. So, there is nothing you can do with trend.

We will fight for clients of other banks, proposing more beneficial terms. IBA- Moscow to date has best conditions on servicing of money transfers to Azerbaijan. We have deliberately set minimum commissions from the moment of bank’s establishment in RF, understanding the social importance of money transfers to the country. We hope, that now, when large market places are shutdown and as a result, various “grey” schemes seize to exist on the money transfers, we will have new clients, who can value the reliability and high standards of our services.

- What are the plans of IBA-Moscow on development of infrastructure?

- We have plans generally. IBA-Moscow every year has set several new office. In the first half of 2009 we have made the assessments of situation and risks. May be something can be opened by the year end. We would not like to rush in. The possibility was considered of purchasing of ready to operate offices owned by various banks. Unfortunately, most of assets presented for sales had some problems behind, making them non-attractive for investors. Currently we perform active search, assess various opportunities, look for suitable locations. So far, we succeeded in expansion of office space of the Main Office, which undoubtedly will impulse the development of the bank. In nearest plans is the consideration of opening of affiliate in Nijniy Novgorod. Besides, within the framework of development of bank cards project we continuously increase the number of ATMs, which can be considered as mini-offices as well as POS terminals.