The Russian Far East: a safe haven for investors

Thanks to the efforts of the Bank’s team, support from foreign shareholders and investment funds, as well as to its favorable location, the Bank’s business, launched in the Russian Far East, demonstrates strong efficiency and solid prospects.

Far Eastern Capital interviewed the Bank’s Deputy Chairman Alexander NEPOMNYASCHY.

“Alexander Vladimirovich, Asian-Pacific Bank is successfully expanding into regions of the RFE and Siberia. Is your experience an indicator of the strong potential of this part of the country?”

“From the global perspective, yes. Money supplies are expanding, and the world is flush with cash, but the US Federal Reserve System and the European Central Bank’s interest rates are close to zero, and risks are high. In this situation, the RFE could become the place where long-term investment is strongest in terms of returns. The region has extensive reserves of mineral resources, which are only beginning to be tapped, and is in close proximity to rapidly devloping Asian economies with strong demand for resources. The Russian Federal Government sees these prospects clearly and has been supporting the RFE in recent years, investing in building modern utilities, energy, and transportation infrastructure in the region. It is therefore reasonable to assume that the RFE is well protected against volatility in global markets.”

“Is it correct that Asian-Pacific Bank has been building cooperation with overseas partners, including from APEC countries?”

“We are steadily building relationships on the international market - with organizations engaged in international trade, with foreign banks, and with international financial institutions and companies. The Bank is a market leader in the RFE, where most of our branches are concentrated, and we are also a leader in organizing and supporting cooperation among businesses in Asia Pacific.

“We have correspondent accounts with major Chinese, Japanese, Korean, and US banks. Asian-Pacific Bank is involved in the International Financial Corporation (IFC) and EBRD’s trade finance programs, which enables us to offer our customers engaging in international trade an expanded range of instruments to help them in their business. We offer export and import contract finance, including products based on documentary letters of credit and guarantees.”

“Your shareholders include Western banks and investment funds. Do they share your view of the RFE’s promise and potential? Are they investing in the regional economy together with you?”

“In my opinion, this is one indication of the RFE’s great promise. Our foreign shareholders invest in our team, too, enabling the Bank to bring in state-of-the-art banking technologies. Today, we are attempting to raise as much finance as possible on the global market to offer long-term loans to small business. This business line is still in the early stages, much like our retail business back in 2001-2003, when growth was just beginning. I am convinced that SME lending will see very strong growth over the next 5-10 years, so we are working hard to maximize our presence on this market and become a market maker in the segment. We currently receive funding from the IFC, EBRD and MSP Bank, which enables us to implement various long-term lending programs for SMEs. Our goal is to move away from major credit risks and create a solid portfolio yielding high returns.”

“How would you assess the current situation on the RFE and Siberian banking market?”

“Competition and banking product saturation have been growing steadily over the past few years in the RFE and Siberia, but the banking system is still underdeveloped in these regions, especially compared to other countries and Moscow. This has insulated our banking sector against the impact of the current financial crisis in Europe. Solid growth rates attest to this, as does the strong performance of Asian-Pacific Bank and other banks in the RFE and Siberia.”

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From Far Eastern Capital files:

Asian-Pacific Bank has been a player on the Russian market for the past 20 years (operating as private AmurPromStroi Bank before 2006). The Bank offers a full range of banking products and services to individuals and companies, operating under general banking license No.1810 issued by the Central Bank of Russia on May 7, 2010. The Bank has a network of 230 branches in 100 cities and towns across 18 Russian regions.

The Bank’s largest shareholders are: PPFIN REGION LLC (66.62%), East Capital (17.9%), and the IFC (7%).

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