OREANDA-NEWS. October 09, 2012. Sviaz-Bank and the International Analytics Unlimited Bank Club have held a traditional Conference on Collateral in Contemporary Lending Practice, with the Moscow Chamber of Commerce and Industry as a partner in putting on the event, reported the press-centre of Sviaz-Bank.

The conference was attended by Gennady Dongaev, head of Sviaz-Bank’s Collateral Service, Pavel Samiev, deputy General Director of the Expert RA rating agency, Oleg Ushakov, lawyer of Liniya Prava firm of attorneys, Natalia Kromskaya, head of the NEO Center’s project group, Boris Moshkovich, director of the ABM Partner CJSC, and Igor Chervakov, counsel to the General Director of Stremlenie LLC. The conference participants discussed assessment of the quality of property given as collateral and appraisal of the value of property pledged as collateral. The discussion was moderated by Suren Vardanian, General Director of the Moscow Export and Investment Support Agency.

In the estimate of the Expert RA rating agency, the volume of problem loans (quality categories 3 to 5, loans renewed involuntarily and restructured, and loans packaged in closed unit investment funds) of Russian banks averages 15% to 16% of the total loan portfolio and may grow appreciably by early 2013. Significantly, the volume of overdue debt among the Top-30 banks is double what it is in all other banks.

The explanation Pavel Samiev gave for this trend is that major banks have set up loan-churning factories in the small business sector that make profound risk assessment impossible to undertake. According to the agency’s poll, two-thirds of Russian banks are going to introduce credit scoring for small and medium-size businesses until the end of 2013, which means that the size of problem loans will continue to increase.

In this situation, the collateral delivered as security for loans made by Russian banks is, on average, more than twice as large as the value of the loan portfolio. Banks give greater preference, Pavel Samiev said, to sureties, guarantees, and deposit of securities, rather than deposit of assets as collateral.

Gennady Dongaev spoke about the specifics of the work of, and training for, employees of collateral services. Collateral service employees have to appraise different types of collaterals and have to possess a wide range of skills and knowledge in many areas of the economy. A specialized skill-upgrading program has been developed at Sviaz-Bank for training professionals in their respective areas. Collaterals are only appraised by employees who have taken a course of training and have been issued with qualifying certificates.

Oleg Ushakov looked at the legal aspects of circulation and use of collaterals. Natalia Kromskaya shared her experience in appraising industrial projects under construction. Boris Moshkovich focused his address on risks arising in collateral appraisal and touched on the relationships between banks and appraisal companies.

Igor Chervakov spoke about techniques used to gather information about the value of projects for use by appraisal companies and banks.

Yet another speaker in the discussion, Sergey Shimanovsky, head of the collateral unit of Belvnesheconombank OJSC, shared information about project appraisal and the experience in work organization of collateral services and appraisers in Belarus.

Over 60 representatives of banks in Russia and CIS countries and appraisal companies took part in the conference.

More details of the speakers’ addresses are available on the website http://www.mbka.ru/.