Italian modernization of the Urals finances

30.04.2010 — Analysis

The largest Italian financial group Intesa Sanpaolo came to Russia in early seventies when their first representative office had been opened in Moscow. Today, thanks to the work of the Moscow office and Banca Intesa, the Russian subsidiary bank of the group, Intesa Sanpaolo is now represented in 25 Russian regions. Aleksey Serebryakov, the Director of the Uralsky branch of Banca Intesa, in the interview to RusBusinessNews spoke about how Italians are strengthening their positions in the Urals banking market. 

- In 2010 Banka Intesa merged with a bank that has been working in the Urals for a long time - KMB BANK, a trend setter in terms of working with small and medium sized business. What was the goal of the deal and what results should the clients expect?

- The reorganisation has been a part of the strategic plan for the development of the presence of the group in Russia. Intesa Sanpaolo, the bank that owns the controlling interest in Banca Intesa (86.75%), is one of the largest in Europe, and serves more than 19.4 million clients in 40 countries. Prior to 2010 there were two subsidiary companies in Russia - CJSC Banca Intesa serving medium-sized and large companies and KMB BANK specialised in lending to small and medium-sized companies. The reorganisation enables us to use the experience of both of them for the establishment of one strong bank experienced in different segments of the market. Moreover, our plans include the development of new spheres of activities such as, for instance, factoring and forfeiting. There is no doubt that the reorganisation will enable us to participate more actively in implementation of important regional projects in industry and trade.

- Do the Italian branches of the bank differ from Russian?

- Yes, they do, in terms of style and layout. In Italian offices, for instance, we do not have the all too familiar blind partitions. Glass partitions give the feeling of lightness, openness and transparency, including that in the work of the Bank. Particular attention is given to the creation of the atmosphere of home and comfort which is so important for Italians; we offer comfortable soft furniture, lighting that creates the feeling of comfort and warmth, round wooden tables reminding of dinner tables gathering the whole family. State of the art designer solutions are at the foundation of the Bank office decoration concept.

Moreover, we are working according to the "one stop" principle. In Russian bank you first talk to a specialist and then go to a cashier. We have all services performed by just one member of staff, the personal manager. 

- Does the product range have any differences?

- In general Italy which is the birthplace of banking, probably has the richest banking experience in the world. This is what determines the high professionalism of the banking system as a whole. The key difference between Russian and Italian banking products is in the price of credit resources which is lower in Italy and this is determined by the macroeconomic differences between the countries. 

- The 2009 has passed under the banner of the financial crisis. How did your bank manage to survive the difficult situation? Does the Russian crisis differ from the Italian? 

- In Europe and in Russia the crisis manifested itself in different ways. Italy has been affected by the crisis much less than other countries, including Russia. The Intesa Sanpaolo Group is one of the most liquid financial groups in Europe. Thanks to the balanced approach to work and the professionalism of the management the Group has managed to avoid any serious shakeups. In Russia, of course, it was harder for us, we did have bad debtors, but we have always tried to understand the borrower's situation and offered debt restructuring. Arrears in the Urals Regional Centre of Banca Intesa are at the level of 5% which is much lower than the market average. At the moment we feel confident enough. I think this is not the first and not the last crisis while every crisis is an experience.

Thanks to our parent bank today we are a part of the group of most reliable Russian banks, we are 100% owned by foreign capital, our business is transparent, reliable, and stable, which is the key advantage for clients. 

- How attractive is the Urals region for the Italian bank? Are you planning to continue expanding in it?

- Banca Intesa is already assuming serious positions in the financial services market in the Urals Federal District. Russia's largest companies which constitute the real sector of the country's economy are located here. The Urals is the most important source of the budget money in Russia, it has huge raw materials reserves, here we see the state of the art technologies implemented, and the region demonstrates good economic indicators. This region is extremely interesting for Banca Intesa. 

As far as the crisis is concerned we see a positive behaviour in the Urals. I would divide the course of the crisis into several stages: the first stage in late 2008 - early 2009 was characterised by the acute lack of liquidity and, as a consequence, the decline in the solvency of clients, bankruptcies of banks etc. The second stage - March-May 2009 - was a time when private individuals were searching for optimal options for the investment of their savings and credit institutions were trying to manage bad debts. The third stage began in August 2009 when everybody has more or less adapted to the new conditions when the situation started to stabilise. Most importantly, the psychological mood had changed. Every manager had become aware that the work has to go on, just taking into account the new economic realities. Today companies are looking for new spheres of activity and development, reviving "old" projects. This is one of the key symptoms that the situation is stabilising.

As far as Banca Intesa is concerned in the Urals Federal District we have 11 operation offices and branches 4 of which were opened in 2008. For a bank with foreign capital this is a very good figure. In Ekaterinburg and Chelyabinsk, Russian industrial centres, we have one of the largest credit portfolios in the Bank. In 2010 we are not planning any increase of the number of offices in the region but in the future we are planning to increase the number of branches Banca Intesa in the Urals. 

- Are you planning to strengthen the area of working with private individuals?

- In the conditions of the crisis Banca Intesa has not stopped its programmes for private individuals; on the contrary, we opened new spheres of work with private clients. The Bank has conducted a serious analysis of the situation in the market the results of which served as a basis for the formulation of main approaches to working with private clients. In particular, we are oriented to a client with average or high income and for this segment we have developed integrated banking programmes. Today Intesa Classic and Intesa Premium products seem to be most attractive to our clients. 

This year Banca Intesa has introduced to the market a new service for private clients - investing money into private equity plans managed by Troika Dialog, the largest managing company in Russia. 

- Do you have any unique products which Russia did not have before your bank came here?

- Yes, we developed a really unique product - Intesa UNO - which enjoys a great demand. This is a deposit of 15,000 Euro or 500,000 roubles or more on which the parent bank Intesa Sanpaolo gives guarantees of return in full of any sum of deposit and accrued interest. I would like to remind you that the Agency for Deposit Insurance only guarantees the sums of money not exceeding 700,000 roubles. Guarantees of Intesa Sanpaolo are provided without the upper limit of the deposit sum. The duration of the deposit is 365 days without the possibility of partial or full withdrawal or adding to the deposit. The interest amounts to 9% for a rouble deposit and to 2.75% for a deposit in Euro. 

Another exclusive service of Banca Intesa is the reimbursement of TAX REFUND value added tax forms. This is the service for people travelling to Italy and shopping there under the condition that they are resident outside the country of the purchase. As a result it is possible to get back from 4 to 20% of price of the purchased goods depending on the VAT rate. We are sure that this service will enjoy a great demand amongst the people of the Urals. 

- What plans do you have for the future in Russia and in the Urals Federal District?

- In 2009 our credit policy was aimed at the support of the size of the credit portfolio, now we have plans to increase it by 15-20%. As far as the strategic development is concerned, our bank is the important link in the relationship between Russia and Italy.

This is confirmed, for instance, by large credit contracts between Intesa Sanpaolo and Russian State-owned banks signed in late 2009 and early 2010. For instance in 2009 in Rome an agreement was signed with Vnesheconombank on the allocation of 100 million Euro for the support of small and medium-sized business in Russia, including the Urals. The support will be given mainly to those companies which trade with Italian companies and to Italian companies planning to come to or to strengthen their position in the Russian market. This year Banca Intesa provided credit resources for Eximbank of Russia in the amount of 100 million US dollars for three years for the support of export of Russian industrial products, Italy inclusive. 

- What non-financial projects are you implementing or planning to implement in Russia? 

- Most important thing that defines us as a part of Intesa Sanpaolo Group is the careful consideration of the interests of the society whose development directly depends on the degree of the social responsibility of business. Intesa Sanpaolo is doing a lot in this sphere. 

For instance the Bank has gathered one of the most interesting collections of Russian Icons in the West, unique in terms of the total number of the collected items, the breadth of the represented iconography schools (Moscow, Novgorod, Pskov, Tver, Northern) and in terms of having the rarest examples of the Ancient Russia iconography. The most part of the collection is displayed in the Gallerie di Palazzo Leoni Montanari which is situated in the historical centre of Vicenza near Venice.

Moreover, Intesa Sanpaolo is the general sponsor of the La Scala Theatre. For many years the company has been working with FC Milan.

The scale of such activities in Russia is, of course, not as big. Of recent projects worth mentioning one is the photo art exhibition Cinema and Pasta in Chelyabinsk. Photos show brilliant actors and great directors of Italian cinematography at feast tables, receptions, and, of course, cooking and tasting pasta. There are photos of Adriano Celentano, Anna Magnani, Roberto Rossellini, Sophia Loren, Marcello Mastroianni, Alberto Sordi, Claudia Cardinale, Vittorio De Sica.

There are other projects too. They are mainly aimed at helping children, at finding their talents. For instance, in December 2009 in Ekaterinburg we took part in the opening of a sports and health complex where the youth football training centre VIZ started its work. We gave the kids' football team a trade mark ball signed by FC Milan players as a symbol of international unity of football fans and the aspiration to win. 

We see as very important the cooperation with non-profit organisations specialising in the development of Russian-Italian cooperation, we actively support and participate in Russian-Italian forums helping Urals companies find Italian partners and lead their business to the international level. 

Interview prepared by Maria Truskova