Annual report 2011 - VTB

VTB Annual Report 20114. Management report40broker accounts were registered with MICEX for VTB24customers.In 2011, the volume of VTB24 customer transactionsin shares on MICEX exceeded RUB 1.4 trillion roubles,representing a brokerage service market shareof 9.5% 1 for VTB24. The volume of transactionscompleted by the bank’s customers in the FORTStotalled more than RUB 2.6 trillion, 1.6 times morethan the 2010 figure.During the reporting period, an additional onlineForex trading platform was introduced, whichincreased the number of customers using the serviceby more than 1,000. At the end of 2011, more than6,561 customers were registered to trade on the Forexmarket. The volume of customer Forex transactionsduring the reporting period was over USD 135 billion,including SWAP transactions.VTB24’s customer-oriented approach and theimproved quality of its retail investment services werethe key drivers behind the growth in retail customerinvestment activity during the 12 month period.In 2011, the number of active customers reachedmore than 25,000.In 2011, VTB24 reduced the down payments requiredto set up individual trust management agreements.At the end of 2011, the number 2 of active individualtrust management agreements was 1.7 times biggercompared to the same period of 2010. During thereporting period, as part of the development of itsproduct line, the bank introduced trust managementservices for property, constituting special-purposecapital of non-commercial organisations.In 2011, funds attracted through VTB24 agencies intomutual funds grew by 2.5 times compared to 2010and exceeded RUB 1.1 billion. The number of officesresponsible for selling mutual fund equity units grewby 72 in 2011, making a total of 567.In 2012, VTB24’s investment business will focus itsefforts on improving the quality of customer serviceand expanding the range of its services and retailinvestment products.Services for small businessesSmall business customers make up a key part of VTBGroup’s retail business. Prior to the Bank of Moscow’sconsolidation in the third quarter of 2011, the Groupprovided services to individual entrepreneurs andsmall enterprises mainly through VTB24. As at theend of 2011, the volume of lending by the bankto small businesses increased by 70% comparedto 2010, and the bank provided RUB 50 billion offinancing in 2011. The bank’s loan portfolio for thissegment rose to RUB 68.7 billion during the year.The number of companies and individual entrepreneursusing the bank’s settlement and cash services reached218,000. The total volume of funds deposited by smallbusiness customers amounted to RUB 97 billion.In 2011, the bank continued to implement its strategyof growing its market share and customer base. A keydevelopment towards the fulfilment of this strategywas the bank’s transition from a single product salesmodel to providing integrated banking services tosmall business customers.In the reporting period the bank:Increased the limit for the “small business”classification category from RUB 90 million toRUB 300 million of annual revenues;Moved to a new customer service model for smallbusiness customers and established an effectivesales unit;Introduced a new product range for lendingtransactions and guarantees;1 Proportion of overall MICEX trading volume in which VTB24 customers took part (in the main trading mode).2 Customers who concluded Forex and stock market transactions during the reporting period.Made changes to its lending procedure to rationalisethe decision-making process and increase theaffordability of loan products to small businesscustomers;Approved a Business Express product concept (forloans of up to RUB 4 million) designed for standardsegment small business customers for whom lendingis subject to a scoring system as part of the bank’scredit decision-making process. In the fourth quarterof 2011, the bank successfully completed a pilottesting of this product and expects that the productwill be rolled out during the second quarter of 2012;Completed a project to develop a new remotebanking system – Bank-to-Customer Online – a Betaversion of which was launched in 2011.Today, the bank offers one of the most extensiveproduct ranges in the market for small businesses,covering most of its segments and meeting almostany customer need.In 2011, as part of the state support programmefor small businesses, VTB24 used OJSC MSE Bank’slending resources of RUB 5 billion to providefinancing to small businesses and individualentrepreneurs. The total volume of lending to smallbusinesses granted through this project amountedto RUB 10 billion, as VTB24‘s Co-financing productcontributed an additional RUB 5 billion of the bank’sown funds to the financing of small businesses.During 2011, the bank continued to develop itsrelationship with regional institutions responsible forsupporting small businesses. The number of currentagreements between VTB24 and such institutionsreached 51.VTB Group’s main aim for its small business lendingand servicing segment in 2012 is to grow salesvolumes and increase its market share. This will beachieved by optimising internal procedures relatedto processing lending applications and by offeringattractive new products. The Bank of Moscow willplay a particular role in the development of thisbusiness area. Just as VTB24 has done, it will provideservices to small and medium-sized businessesindependently. The Bank of Moscow intends to focusits efforts primarily on Moscow and the Moscowregion, as well as other ten key regions where it ispresent, thus covering more than 65% of mediumsizedbusiness in Russia.ATMsIn 2011, VTB Group had one of the largest ATMnetworks in Russia, and taking into accountTransCreditBank’s and the Bank of Moscow’sinfrastructure, the total number of ATMs reached10,161 units as at the year-end.As at the end of the reporting period, VTB24’s ATMnetwork totalled more than 5,700 units, 28% of whichare equipped with a cash pay-in function. Customerscan withdraw and pay in money, transfer funds andopen deposit accounts at the bank’s ATMs. They canalso make payments to more than 100 payees.As at the year-end, the bank’s ATM network hadprocessed more than 420 million transactions.More than RUB 214 billion was received and creditedto customers’ card accounts and payments of morethan RUB 31.5 billion were made.The bank is continuously improving its ATM networkby expanding its size and enhancing service quality.In 2011, the bank installed 749 ATMs, including thereplacement of existing ATMs, 495 of which have acash pay-in function.In 2011, the technical availability of ATMs, definedas the ratio of time when the devices wereoperational to the total time for the period, increasedfrom 91.0% to 92.4%.In 2012, the bank plans to expand its own network ofATMs to 6,370 units and put new devices into service,such as information and payment terminals for noncashpayments.41