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"Mail Bank": "We will not share customers"
As "Mail Bank" - a bank with state participation - for several months opened 300 points of service and became the main partner bank of the program "Far Eastern hectare"
Photo: Tass / VEF Photobank
Georgy Gorshkov, First Deputy President and Chairman of the Board of Post Bank, told the EastRussia analytical agency about the rapid expansion to the Far East, about loans to users of hectares and about the planned platform for medium and small businesses on the VEF fields.
BANKING FOR DIFFICULT NORTHERNS - Georgy Vyacheslavovich, Post Bank literally burst into the Far East, opening hundreds of service points in a matter of months. How deep have you gone?
- Let's go from the general figures. As of today, nearly 11 thousand service outlets have been opened at the "Post Bank", of which about one third are our branches with bank employees and two thirds are service points where the employees of Post of Russia provide basic financial services. This development is in full accordance with the strategy approved by the supervisory board. Moreover, approximately in the same ratio, we plan to move to 2023 year.
We really came to the Far East only in 2017. This is also fully consistent with our plan, but so far the network for us, for our scale, in the macroregion is small. Although we are moving very quickly: in three months, 300 service points were opened in the Far East, and that's not all. New points will open in September and October. We plan that by the end of 2017, 500 service points will be operating here. We have already installed 100 ATMs, and we are expanding the network of POS terminals that allow us to work with plastic cards. These POS-terminals are installed in post offices, with their help customers can withdraw and deposit cash, find out the balance, replenish their deposit, etc.
I note that until the end of 2017 in the Far East, we will create more than 500 new jobs. This is important for the economy of the region. At the same time, in each subject where we start our work, we mainly take graduates from local universities. This is another argument in favor of young people remaining to work in the Far East.
- At the same time, it is obvious that the client base in the macroregion itself is quite small. How are you going to share the client with the existing players?
- In the whole country, we are among the top ten banks in retail lending, that is, we are already noticeable. In terms of customer funds, deposits and balances on current accounts, Post Bank is in the top twenty, and we are moving up in the ratings rather quickly. In the Far East, as I said, we have just begun work. That is, it is too early to say that we are competing with the country's first banks in the Far East.
How will we divide the customers? To be honest, we do not share customers. Our task, determined by both shareholders and the government, is to ensure the maximum availability of basic financial services in the most remote corners of the country, not only in large cities, but also in rural settlements.
We consider the basic financial services as an opportunity to open a current account for an individual in order to receive salaries, pensions and social payments, to make remittances to his relatives without some kind of surplus commission, even if they reside in other regions; be able to pay for goods by cards or via the Internet. Of course, deposits are added to this, and credits are those products with which "Mail Bank" also works quite successfully.
- An essential problem for the Far East is the availability of financial services in remote settlements. Both state and private banks repeatedly opened branches in such places, and then closed - because of unprofitableness. There were cases when the closure led to social tension - the whole population with cards, and there is nobody to serve. Tell me, are you ready to incur losses from working in remote places, or for you it's not even losses, given that the services are provided on the basis of the "Post of Russia"?
- Our task is to provide customers, Russian citizens, including those residing in rural settlements, with a convenient, competitive, attractive service and at the same time to rely on the most modern technologies and service formats. From this point of view, we often say that we are building a bank that will be the leading "digital" bank of the country (a digital bank, as they say right now) with the maximum physical presence. This is not just an online bank, which only exists on the web page. On the one hand, these are the most modern digital technologies that allow you to do everything remotely. But on the other hand, if there is a need to talk with a person, with a bank employee, this can be done in every second post office. This is our goal setting.
Now about the loss or profitability. "Mail Bank" became profitable from the first year of its work. These are not miracles, but the result of the team's work to implement our strategy. Why are many banks closed? Because, as you correctly say, branches are unprofitable. A typical banking branch is 200 square meters of area in rent or in property, such as ATMs, employees, cash.
The operating model of Post Bank is built on the principle of low costs. In everything we do, we try to minimize costs as much as possible. For example, we do not build cash registers. All work with cash is organized through ATMs or through the post office, where the client can apply with a card, insert it into a POS terminal, and the postal cashier will issue a thousand rubles or five thousand rubles from his cash register. A traditional bank teller - with armored glass - is a very expensive building element. We don't use those.
- So you do not bear any losses from working in the Far North?
- We try not to receive losses, and our shareholders, the beneficiary of which is the government as well, earn profit and pay dividends. Therefore, we rationally save on costs as much as possible.
I told you that about two-thirds of our service points are provided by non-bank employees, and postal staff who are trained to provide basic advice on financial services. This also lowers our spending base. Due to this, we can provide our clients loans at rates significantly lower than many banks, and for savings accounts and deposits - pay slightly more than some banks with state participation. Therefore, in fact, the final beneficiaries of this model, based on low costs, are customers in large cities and rural settlements.
SERVICE ON HECTARES - In accordance with the strategy, for this year you had to capitalize on 6,7 billion rubles, right?
- Yes everything is correct. 6,7 billion rubles is the additional capitalization carried out by the bank’s shareholders, and the main purpose of the additional capital is to ensure the growth of our loan portfolio, the fulfillment of Bank of Russia standards. 3 billion has already been received by the bank, another 3,7 billion will be received by the end of the year.
- And from them 3 billion, which are allocated for concessional lending to the owners of hectares?
- No, additional capitalization has nothing to do with the implementation of the Far Eastern Hectare program. In order to implement the concessional lending program under the law on the "Far Eastern Hectare", we do not need additional capital. But in order to have additional liquidity for this program, Post Bank received a loan from the Far East Development Fund in the amount of 3 billion rubles. So this 3 billion is a separate deal between the bank and the Far East Development Fund, and the money is repayable.
- I see. How is the issuance of these loans going now, in numbers can be characterized? What is the demand, how many loans are issued, are you satisfied with the progress of this program?
- Let's from the general to the particular. The "Far Eastern hectare" program has been in operation for more than a year, over this period more than 100 thousand applications have been collected, about 30 thousand hectares were issued on their basis. Due to the fact that the program took effect in stages, the main part of the population land became available only from February this year. Therefore, the active growth in the number of applications and signed contracts fell on the summer of 2017.
"Mail Bank" became a partner of the "Far Eastern hectare" program in May 2017. Now, together with the Fund for the Development of the Far East, with Minvostokrazvitiya of Russia, with the Agency for Human Capital Development, there is a "pilot" for concessional lending to the Far Eastern hectare recipients within the framework of government-approved support measures for users of these land plots. Such lending is not necessary for everyone, but at the same time, far from everyone knows about the existence of a loan program.
Having connected in May 2017, we held negotiations with about 700 partners - companies that can provide services to recipients of a hectare on credit. Of these, 230 have already been connected to the program. What are these services? First, the supply of goods: motor-drills, woodworking machines, tractors for agricultural production, outboard motors for fishermen, special communications, workwear and much more. Secondly, in the last month we have connected several service providers who drill water wells or carry out gasification of individual houses. Next, we plan to connect companies that supply ready-made house kits, that is, panel board prefabricated houses.
These goods and services were in demand: over the past two months, we have already approved more than 100 credit lines to the recipients of hectares, and now this number will grow.
- How much credit conditions are really preferential? What rate?
- The rate ranges from 8,5 to 10,5% per annum in rubles, which is low enough for the market. Amount - up to 600 thousand rubles. The average loan amount taken by recipients per hectare is 300 thousand rubles. At the same time, we are reviewing and discussing with the Ministry of Eastern Development and the Foundation for the Development of the Far East some measures to increase the availability of this loan.
- And what are the requirements, documents?
- We have the most loyal requirements for the recipients of the Far Eastern Hectare: you only need two documents in order to get such a loan - a passport and SNILS. We do not require any other documents, although we need the recipient of the hectare to have a source of permanent income. The application process itself takes less than a minute. Today, it is the most affordable loan for the development of an agricultural plot in the country.
- Did you give many refusals?
- I must say that in this case we approve more than half of the loan applications. The denial is mainly due to the poor credit history of those who are applying. But we must also remember, and we see this in real work, that credit funds are far from being the main ones in the development of a hectare by users. Loan funds are just an addition to the recipients' own resource of hectares.
WORKING CONDITIONS - MARKET - Tell me, do you plan to expand the service line? Mortgage, for example, you do not give, but do you plan?
- "Mail Bank" is a member of VTB Group, which is one of the key players in the mortgage market. VTB Group has mortgage programs with all the leading developers, and we do not need to supplement this program, since we are still experts in servicing pensioners, investors, in servicing clients who need loans for amounts up to one million rubles.
- At the St. Petersburg Economic Forum, the bank's initiative to create a powerful platform for working with small businesses was announced. Any news on this part? When do you plan to launch?
- Our working group, which formed the concept for the development of the direction of small and micro-business, has completed its work. The head of this direction has been appointed, and we are starting practical activities. I think that by the end of 2017 we will have already launched the first pilot projects, within which we will test our product ideas and technological capabilities.
- What other competitive advantages does it give that you are developing on the basis of the "Post of Russia"? This is largely exclusive, not available to other market participants: the federal network, premises, staff.
- During the past 20 years, various banks actively cooperated with the "Russian Post". And the mail itself had about 10-15 attempts to create its own bank. At the same time, none of the banks achieved the result that we achieved within the VTB Group. After all, the question is not whether the bank employee appeared on the territory of the "Post of Russia", it was before. The question is that only the operating model, which we invented and rolled, proved to be a winning one. We did not receive any commercial privileges, any concessional financing or any preferential terms for finding in the post offices. On the contrary, we pay for working in post offices.
- How exactly?
- For the placement of each employee of the bank, we pay "Russian Post" a monthly payment. For the fact that the postal employees perform agency functions and advise the clients of Post Bank, we also pay the Post of Russia. This calculation takes place quarterly for each month of our stay at the post offices.
- How does the cost of these services correlate with the market?
- I must say that in most small towns, the infrastructure payment that we pay to the post office is quite comparable with the rent. If we as "Mail Bank" came to this city and wanted to rent 3, or 5, or 10 square meters, then they would pay about the same money.
- According to the feelings of the present moment, how do you assess the overall situation on the market? Is there a crisis in the banking system? Those news that come from the market are new opportunities, as the chairman of the Central Bank says, or is it just clearing from unscrupulous market participants?
- We have no crisis in the banking system. With the change in macro- and microeconomic conditions, most of the banks that actually work have adapted to the new environment, to new working conditions. Of course, banks, like other companies, directly depend on their clients, on how comfortable their clients feel, how positively they see their future. Customers, whether they be companies or individuals, experienced certain difficulties at the turn of 2014-2015. Now we can say that individual clients are quite positive about the future, the demand for banking products - both in terms of loans and in terms of deposits - is growing and has reached the indicators that we observed before the recession.