Avers: from merchant bank to financial institute of the 21th century
How a small bank of Kazan became a universal financial institute of Russia
Founded in 1990 by the Public Health Service of Tatarstan, Avers bank is one of the first participants in the banking industry of Tatarstan and Russia. After a crisis of 1998, which had a direct impact on the activities of the banks, the TAIF GC was offered to take control of Avers. It allowed the bank to stay afloat during difficult times, to increase its authorized capital and improve economic indicators. Today Avers attained a level that lets it feel comfortable in the market and guarantee clients reliability. In this issue, the Realnoe Vremya newspaper continues special project TAIF-25 dedicated to the anniversary of the Group telling about how the bank develops its business in an uneasy for the Russian banking industry period and what tasks it undertakes.
Durability test
Against of a background of a collapse in banking, when within a year and a half over 150 banks terminated their work, the growth of low-quality assets is progressing, access restriction to financing in western markets is maintained, large capital exports are detected, Avers of Tatarstan experiences an unprecedented way of development of the regional bank converting into a powerful player.
For the last 4 years only, Avers has increased its authorized capital to 15,1bn rubles, borrowed subordinated debts equal to 1,2bn rubles, started the issue and use of Visa payment cards, introduced the system of distance banking for natural persons, entered international information systems (Thomson Reuters and Bloomberg), got the right of participation in the federal programme of car loans on concessional terms and created its own sales network of partners, including Estate Organizations, brokerage companies along with automobile dealerships. Expanding its presence, the bank opened additional and operational offices in Kazan and Samara. Today Avers is one of the most noticeable participants of the regional banking markets, which is able to become a worthy opponent of federal banking institutions. As a result, according to the figures of a survey of Interfax-100, the capital of Avers allows it to be among the top 100 largest banks of the country, and at the beginning of the year, it takes the 45th place. In Tatarstan, as Banki.ru information portal informs, Avers is situated in the 3rd position according to its own capital and in the 1st place – to its profit.
Within a quarter of a century, the bank earned a reliable business reputation and respect of its colleagues. However, the system-wide financial crisis in 1998 made some drastic adjustments to the development of Avers. The banking crisis was one of the consequences of that change, which for the national banking system caused a depreciation of the capital, outflow of client funds, formation of heavy losses and inability of a number of systemic banks to fulfil their obligations. In spite of the taken emergency measures, many banks teetered, some of them went bankrupt.
Evgeny Bogachev, the chairman of the National Bank of Tatarstan, was worried about the situation of Avers, which had a more difficult situation. Bogachev, who is persuaded that it's necessary to help banks, didn't want Avers to go into liquidation. In addition, first President of the republic Mintimer Shaimiev personally was looking for the way out, in other words, every bank is a vital link of market structures and the element of the circulatory system of the economy. In the end of the 1990s, Evgeny Bogachev, at Mintimer Shaimiev's suggestion, submitted the TAIF GC a proposal to support the bank during the crisis. Therefore, for Avers a new history began in 2000. Enterprises of TAIF became participants of the bank.
As a result of a cautious politics of new participants on financial bank rehabilitation, the situation significantly changed: the range of services expanded, and economic indicators improved. Then Avers reached, in essence, another level, felt strong among other banks and could guarantee the clients reliability of their investments.
Albert Shigabutdinov: 'We managed to save the bank and pay off the debts'
The repayment of all the debts was of paramount importance. 'Thanks go to Rashid Samigullin, who granted my request and headed the bank. We managed to save the bank and pay off the debts. Samigullin helped the bank to stay afloat, but then the following task appeared. We needed a stable, more efficient and reliable bank. Then we invited Rustam Sayakhov, our apprentice who worked in TAIF earlier. He also had worked in Alfa-bank and in Raiffeisen, so he successfully coped with the task,' says Albert Shigabutdinov, the director general of TAIF PJSC. Sayakhov procured the fortification of positions of the bank and launched new services. For 4 years (2011-2015) the team succeeded in increasing the credit portfolio of the bank tenfold – from 1,1 to 10,9. The key contribution to the dynamics was made by participants of the bank who increased the authorized capital from 2011 – from 0,6 to 15,1bn rubles. The deposits of natural persons in the bank increased almost fivefold, from 2 to 9,2bn rubles. The same growth was observed in deposits of enterprises – from 2,1 to 10,4bn rubles.
In April, the bank had an addition: Kamil Yusupov, an ace banker and the ex-head of some largest banks of the republic, came to Avers. Experts say a new stage in the history of Avers began when he came. The bank would surmount growth costs as a real universal financial institute with the highest level of service and a wide range of up-to-date advanced technology products and services.
The reliability of Avers has traditions
Nowadays the authorized capital allows Avers to take the 2nd place among banks of Tatarstan.
The reliability of the bank has its own traditions. The Kazan Merchant Bank made itself known in the financial world of Kazan in 1847. Today Avers is located in its historic building, a listed building of Kazan, on Musa Djalil Street. In the 19th century, it was a bank of leading financial magnates. The famous strongroom, furnished according to the licence of the German S.I.Arnheim company, was designed for such moguls. The room cost 40,000 rubles. In the boxes of the strongroom (the prototype of the modern depository) particularly Kazan merchants' valuable objects were stored. The first and the only joint-stock bank of the Government of Kazan was founded by the merchants of the first and the second guilds. The Merchant Bank of Kazan was the only local bank that lent to the enterprises, according to the special current accounts, till the end of the 19th century.
Leading position in banking
At present, this commercial bank offers a wide range of services. Bank loans are one of the most important lines. The credit portfolio of the bank is formed due to more reliable clients of the bank: enterprises of the real sector of the economy first, which can fabricate competitive products and have good perspectives on further development. However, the bank pursues a policy of moderate growth of the credit portfolio that allows it to avoid a significant increase of soured debt.
Avers has many clients: Bahetle in food retailing, TTS in automotive dealership, the Makheev Group of Companies in food production, Kazanorgsintez, TAIF-NK and Nizhnekamskneftekhim in petrochemistry, TranzitCity in the retail trade of petroleum, oil and lubricants, and KAMAZ in mechanical engineering. It is obvious that Avers deals with successful clients of all sectors of the economy.
'The development of corporate business was and still remains the strategic direction in banking,' tells Kamil Yusupov, the chairman of the board. What is more, the figures confirm this fact. Last year the results showed that the volume of deposits and other external funds of legal persons increased almost twofold and made 6,8bn rubles at the beginning of 2015, and, according to the data embracing last 6 months, exceeded 31,1bn rubles.
The bank cemented its positions in the retail market. On 1 January 2015, the volume of the credit portfolio of legal persons, including small and medium businesses, amounted to 9,9bn rubles increasing by 1,5bn rubles. The report on 1 July shows the credit portfolio was more than 17,7bn rubles.
In total, Avers bank consolidates its positions in the banking sector of Tatarstan. As the data confirm, only last year the bank doubled its net profit – 1,56bn rubles. It was the best result among the banks of the republic. According to the last year's report, in comparison with 2014, the profit of the banking sector of Russia decreased by 41%. On 1 July, net profit of the bank came to 733,3bn rubles. Portal Banki.ru states that, according to the indicator, Avers is in the first place among the banks of Tatarstan. Assets of the bank increased by 23% reaching 46,8bn rubles at the beginning of 2015. The size of the assets let Avers take the third position among the banks of the republic.
Expanding horizons
In accordance with the confirmed development strategy, the bank expanded its footprints in the market: three new additional offices of universal format and one operative office in Samara were opened last year. Today the regional chain is represented by 15 points of one head and sale offices. The development of the regional chain allows the bank to work with clients productively, cultivate a trust-based partnership and be easily accessible for their business.
Recently a new office was opened in Naberezhnye Chelny where the clients of the bank can get access to the full package of services: loans, deposits, all types of payment transactions, money transfer without account opening, bill and another payment services, credit cards operations, and currency exchange.
The development of the business in the region of Zakamye is carried out within the scope of the tasks of the bank on assets increase and build-up of the take in the market of Tatarstan. The administration of the bank is convinced the expansion of the geography is going to be a growth point. For 25 years, the commercial bank has demonstrated its stability many times surmounting financial turmoil and downturns in the economy. And for the last 15 years, a small bank of Kazan has become a universal financial institute of Russia owing to its participants. The authorized capital came to 15,1bn rubles, and the shareholders' equity reached 18,4bn rubles.
As for the profit, in terms of economic instability, Avers gives the best results satisfying all the requirements of the Bank of Russia. At the same time, Avers has a large to-do list. The chairman board of Avers formulates it the following way: to improve the customer service, develop the quality and optimization of business processes, update on IT, attract a new clientele and increase the credit portfolio without quality loss. For reaching these goals the bank needs to use its competitive advantages as one of the most stable and reliable banks in the regional market and pay special attention to the banking valuation risk, provide a high customer service and competitiveness of products and services. In brief, according to the data for the last 8 months, the bank with a 25-year experience in the banking market has been copying with these tasks successfully.