♦ G4-18. This report is presented for the 2015 calendar year as part of Center-invest Bank’s integrated IFRS reporting. The G4 Sustainability Reporting Guidelines were taken into account in the compilation of this report, to the extent to which the information is of interest to the bank’s current and potential shareholders, partners, customers and employees. The sections of the report presented in accordance with GR-4 are appropriately colour coded.

♦ G4-36. The contact person for this report is Sergei Smirnov, Deputy Chairman of the Executive Board.


1. In 2015 global markets remained volatile and negative trends in the Russian economy intensified. And yet in these very difficult conditions the transformational banking business model1 introduced by Center-invest Bank proved resilient. Transformational banking is the new reality:

  • — managing change amid continual crises,
  • — solutions implemented in response to any challenges,
  • — in the interests of current and future generations,
  • — based on best international practice,
  • — technical, financial and social engineering.

2. At a time of increased risks and threats, the most effective solution was to work within Center-invest Bank’s ecosystem. The definition “Center-invest: it’s the best!” is not an advertising slogan, but an intentional focus on:

  • — using the best ecosystem (Southern Russia, partners, customers, employees),
  • — the use of best international practice by the bank and its customers,
  • — offering unique banking products and modern technologies for retail customers, small business, agribusiness and energy efficiency,
  • — forming a new generation of customers on the basis of their participation in the bank’s social and educational projects.

The bank regularly analysed the markets in which its ecosystem was evolving. As well as educational resources, we provided new products and approaches for small business, information technologies, energy efficiency, the agribusiness sector, consumer lending, and the training of creative cadres of young people, entrepreneurs and civil servants.

The bank has introduced new ways of working with various social groups: a micro cluster project, “Project for My City” (13,000 participants); the first stage of the project “My Strategy: Me and the World in 2030” (1,500 participants); a Financial Literacy Centre (15,000 participants); “Enterprise for All” (20,500 participants); and the Endowment Fund for Education and Science in the Southern Federal District (20,000 participants).

3. The geopolitical crises and sanctions created new conditions for the development of the bank’s ecosystem:

  • — consolidation of society and mobilisation of the economy in Russia;
  • — restrictions on the operations of international financial institutions in Russia;
  • — creation of competitive advantages in the domestic market for the bank’s business customers;
  • — government support for competitor banks, and a tougher competitive environment.

Faced with these new challenges, Center-invest Bank’s transformational banking business model and ecosystem enabled us to:

  • — implement our business plan successfully,
  • — be one of the more profitable Russian banks (50th place under RAS, 28th place under IFRS, out of approximately 730 banks),
  • — continue to introduce new approaches and technologies in IT, risk management, internal control and compliance,
  • — retain our authority and the trust of our customers and partners.

4. To mitigate geopolitical risks the bank played an active part in organising international events:

  • — Russia’s first Positive Economy Forum, held in June 2015 in Rostov-on-Don, together with Jacques Attali’s team;
  • — the German and Russian Twin Town Forum, held in Karlsruhe and Baden-Baden on 27 - 30 June, together with the German-Russian Forum;
  • — a meeting of Russian and German business representatives with the German ambassador Rüdiger von Fritsch on 5 March 2015.


1. Center-invest Bank complied with all regulatory requirements under Russian and international standards. This was confirmed by all of the inspections conducted by supervisory and regulatory bodies. Taken together, these inspections lasted a total of 2,500 days (+50% compared to 2014).

2. Center-invest Bank strengthened its positions in the regional and Russian markets, including for the following important parameters: SME lending (ranked 16th among Russia’s banks), reliability (ranked 38th by Forbes), growth rate (5th among regional banks), and successfulness (17th place among all Russian banks and 1st place among regional banks).

3. In 2015, 78 children were born to Center-invest Bank employees.

Capital, RUBbn5.
Assets, RUBbn48.354.462.775.991.389.6
Net loans and leasing, RUBbn30.642.548.461.572.072.7
Deposits, RUBbn33.83944.149.449.265.0
Profit, RUBbn0.
CAR, RAS, % ≥ 1014.713.313.312.410.912.8
CAR, IFRS,% ≥ 819.818.217.415.614.517.1
CAR, Basel 3, % ≥ 10,516.415.915.313.913.015.1
CAR Tier 1, IFRS,% ≥ 4,011.911.611.811.310.312.7
CAR Tier 1, Basel 3, ≥ 8,59.910.110.410.09.211.2
ROAA, %0.481.761.882.031.320.6
ROAE, %3.9214.5315.4217.2512.075.3
Cost income51.849.945.14543.451.1
Number of children born to bank employees818271838678


1. At a time of crisis and volatility, causing Russian consumers to uncertainly, the local population, businesses, government bodies and even Center-invest Bank’s competitors in southern Russia are guided more than ever by our intelligent risk analysis and sustainable conduct:

  • — Unlike speculative banks, Center-invest Bank did not raise its interest rates on existing loans. Instead, the bank and its customers took measures to manage the risks of market volatility, a fall in production, and geopolitics. These measures allowed the bank to continue providing the real economy with loans with optimum interest rates. The bank’s customers were able to complete their projects successfully, make sufficient profits, and share their success with the bank.
  • — The bank’s transparency and openness and its work with various social groups helped to bring the business community and the authorities together to maintain southern Russia’s dynamic growth. It also enabled the bank to retain its leadership in introducing best international practice, the quality of bank services, retail and SME lending, introducing energy efficient technologies, and modernising agriculture.
  • — Center-invest Bank’s unique experience of financing the renovation of multifamily residential buildings has shown that pressing social problems in the housing sector can be addressed through the effective use of market mechanisms and new lending approaches. Our work in this area has been recognised by the Russian Ministry for Housing and Utilities.
  • — Center-invest Bank’s work on introducing electronic transfers for Federal Treasury departments has been used to roll out a new system across Russia.
  • — The bank held a series of lectures at leading southern Russian universities on current economic challenges, modern banking technologies, and creative analysis.
  • — Using crowdsourcing to help develop the “Me and the World in 2030” Strategy the bank attracted the attention of young people, other residents, businesses and government bodies in southern Russia.

2. Center-invest Bank’s participation in cultural projects promotes the cultural development of southern Russia’s regions. We support public events held by theatres and museums, as well as competitions and cultural projects.


The results achieved allowed Center-invest Bank to approve a new strategy: “Global Competitiveness in Transformations”, a Strategy for Developing Center-invest Bank’s Ecosystem in 2016-2018. The bank is already implementing this strategy successfully in the new conditions. Each section in the strategy sets out both the challenges and the proven solutions that the bank is using in response.

New challengesCenter-invest Bank’s solutions
Volatility of global markets
Strengthening its positions in southern
Russia, a sustainably developing region.

Making a substantial contribution to the
socioeconomic development of the areas in which
it operates.

Russian economic stagnation
Using the advantages of southern Russia’s
diversified economy and entrepreneurial

Using attractive interest rates to gain the best quality
customers, and using modernisation and energy
efficiency programmes to make their businesses more

Uncertainty about financial
market reforms in Russia
Business based on a sustainable banking

Сontinual transformation of business in a rapidly
changing external environment

President and Chairman of the Board
of Directors, Dr. Vasily Vysokov
Chairman of the Executive
Board, Yuri Bogdanov

In 2015 the bank:

Held its thirteenth annual scholarship competition for southern Russia’s top university students. Over 2,000 students entered the competition, and the 400 winners each received a Center-invest Bank scholarship.

Participated in the Euromoney Central and Eastern European Forum held in Vienna on 20-21 January 2015.

Spoke at the Russian Housing and Utilities Forum 2015 about its unique experience of providing loans for the renovation of multifamily residential buildings.

Won both a people’s vote and an expert jury vote in the Golden Wheel banking competition held in Rostov-on-Don by the news portal 161.ru.

Was one of the first banks in Russia to participate in the “Mir” national payment card system. Center-invest Bank was also part of the pilot programme to test the issuing and servicing of the Mir card.

Organised Russia’s first Positive Economy Forum. Sixty-five world-class experts travelled to Rostov-on-Don for the event, the majority of whom were from the European Union. Over 1,000 people visited the Forum.

Sponsored a start-up forum held in Rostov-on-Don in June 2015.

Won a prestigious Relationship Award 2014 from Commerzbank AG, Europe’s largest bank (Frankfurt, Germany). The award recognises the high quality of Center-invest Bank’s payments and its successful cooperation.

Presented its experience of transformation at the Skolkovo Business School. Yuri Bogdanov, Chairman of the Executive Board of Center-invest Bank, shared his experience and expertise.

Was recognised as Russia’s best regional bank and one of the country’s top 3 retail banks. We also took 7th place among Russia’s “banking market leaders” (Sravni.ru comparison site).

Took part in an IFC Financial Institutions Group Knowledge Forum. The results of the bank’s work were presented in a paper entitled “Transformational Banking: made in Russia”.

Presented “transformational banking” at the XIII International Banking Forum “Russian Banks - 21st Century”.

Came first place in the “cheapest car loans” ranking published by Sravni.ru.

Was a co-organiser and financial partner for an international conference of young scientists and academics from BRICS countries held on 24-26 September 2015 at Southern Federal University in Rostov-on-Don.

Was included by the Bank of Russia in its updated list of significant banks in the payment systems market. There are 51 banks on the list. (Bank of Russia Order dated 25 March 2015 “On Recognition by the Bank of Russia of Credit Institutions as Significant in the Payment Services Market”).

1st place among regional banks

17th place for business success


In the Forbes annual reliability rating
of Russian banks, Center-invest Bank

In The Banker’s Top 100 Russian Banks
ranking, Center-invest Bank is:

10th —cost-to-income ratio

17th —return on Tier 1 capital

19th — return on assets

55th — assets

58th — capital

Moody’s Investors Service

В1 stable


for size of SME loan portfolio among
Russia’s leading banks

In partnership with the Rostov-on-Don city administration, co-organised a city-wide environmental social advertising competition “Let’s Make Our City Cleaner”.

Presented its unique experience in energy efficiency at the Energy Efficiency Finance Forum held under the aegis of the EBRD in partnership with the United Nations Environment Programme Finance Initiative (UNEP FI). The event, held in Istanbul on 16-17 September 2015, was entitled “Building a Global Energy Efficiency Financing Alliance”.

Participated in the 4th Positive Economy Forum in Le Havre (France), at which delegates discussed prospects for building a positive world by 2030.

Held over 70 events in universities to promote knowledge and research into entrepreneurship and also the acquisition of entrepreneurial skills.

Supported the “Don Teacher of the Year” competition for the thirteenth time.

Supported and participated in the Sixth Festival of Science in southern Russia.

Supported a music festival (together with the Alliance Française), Youth Day (together with the city administration) and a classical concert conducted by Misha Katz. It also organised its traditional concert to commemorate Victory Day.

Participated in Global Money Week. The bank put together a number of events for schoolchildren, students, entrepreneurs and pensioners.

Southern Russia (Southern Federal District (SFD) and North Caucasus Federal District (NCFD) as % of Russian Federation

Gross regional product/value of goods and services produced7.
Fixed assets10.*15.4*
Retail trade9.811.514.
Capital investment11.69.414.513.014.013.311.816.219
Average monthly wage
Average per capita income (monthly)

*SMEs and individual entrepreneurs, data as at 01.01.2013

Southern Russia is a region:

— in which the staff of Center-invest Bank’s 132 branches are fulfilling their civic and professional responsibility to work in the immediate and long-term interests of the region by promoting effective economic development, social stability, and environmentally responsible behaviour;

— in which Center-invest Bank effectively manages the regional risks associated with accepting deposits and lending to retail and business customers, the requirements of supervisory and regulatory bodies, the impact of global processes, and the specifics of Russian legislation;

— that, at a time of globalisation, effectively combines the advantages conferred by its geographical position, favourable climate, diverse natural and human resources, and infrastructure;

— that has long been populated by people of different nationalities, whose lives are enriched by the region’s cultural diversity and tradition of enterprise, and who value their freedom and independence;

— that, with its economic diversity and high levels of entrepreneurship, serves as a model for the future Russian economy;

— in which salaries are 30-40% lower than the Russian average and five times lower than in European countries;

— that is experiencing a faster rate of economic recovery after the crisis, and slower growth in production costs, than the rest of Russia as a whole. This makes the region more competitive. Indeed, southern Russia plays the same role in the Russian economy as do the BRICS countries in the global economy;

— where SMEs are modernising successfully on the basis of best international practice.

At Center-invest Bank, sustainable banking means:

— an integral part of the corporate culture for its employees and customers;

— procedures to comply with the environmental requirements of the bank’s IFI shareholders and partners;

— the bank’s experience in financing projects pertaining to energy efficiency, SME modernisation, and agribusiness, which have increased business efficiency three- to fivefold;

— increased operational efficiency on the basis of best international practice: transparent corporate governance, risk management and internal control procedures, advanced information technologies, and a new corporate culture;Ы

— a risk management system based on a combination of data analysis methods that ensures the appropriate allocation of capital, powers and responsibilities among the bank’s business units and employees;

— a consistently strong financial performance that is persuasive not only for supporters of sustainable development but also for speculative market participants;

— increasing the competitiveness of the bank’s customers and raising the population’s standard of living by providing training in best international practice for a wide audience, including managers and other personnel, young people and schoolchildren.

President and Chairman of the Board
of Directors, Dr Vasily Vysokov
Chairman of the Executive
Board, Yuri Bogdanov

Full name of the bank:

Open Joint-Stock Company
Commercial Вank «Center-invest»

Center-invest Bank carries out the following banking operations in accordance with General Licence of the Central Bank of Russia No. 2225 dated 9 September 2013 (General Licence No. 2225 dated 26 January 1998 expired due to the amendment by federal statute of the descriptions of specific banking operations):

  • — attraction of funds from individuals and companies in the form of deposits (call and fixed term deposits);
  • — investment of the funds attracted from individuals and companies in the form of deposits (call and fixed term) in its own name and at its own expense;
  • — opening and administering bank accounts for individuals and companies;
  • — transferring funds on the instructions of individuals and companies, including authorised correspondent banks and foreign banks, through their bank accounts;
  • — collection of cash, bills, and payment and accounting documents, and provision of cash services for individuals and companies;
  • — purchase and sale of foreign currencies in cash and non-cash forms;
  • — issuance of bank guarantees;
  • — transferring funds without bank accounts being opened, including electronic funds transfer (excluding postal transfers).

Center-invest Bank is listed in the Unified State Register of Legal Entities (Certificate series 61 No. 002690018 dated 26 August 2002). Its primary state registration number is 1026100001949.

Center-invest Bank is registered as a member of the mandatory insurance system (Certificate No. 283 dated 9 December 2004).

Center-invest Bank holds the following professional securities market participant licences: № 061-03243-100000 dated 29 November 2000 for carrying out broker activities; № 061-03332-010000 dated 29 November 2000 for carrying out dealer activities; № 061-03407-001000 dated 29 November 2000 for carrying out securities management activities; № 061-04118-000100 dated 20 December 2000 for carrying out depository activities.

Center-invest Bank is authorised to issue guarantees in favour of customs authorities (Notification of the State Customs Committee of the Russian Federation dated 01 March 2016).

Center-invest Bank has exclusive rights to an item of intellectual property, namely, its trademark (State Register of Trademarks and Service Marks of the Russian Federation, Certificates Nos. 330123, 330124, 328151 and 330126 dated 24 July 2007).

Although the bank has not formally signed the following documents, it subscribes to and applies their main principles:

  • — The Ten Principles — United Nations Global Compact, 2000;
  • — OECD Guidelines for Multinational Enterprises, 2011;
  • — United Nations Guiding Principles on Business and Human Rights, implementing the UN “Protect, Respect and Remedy” Framework, 2011.

The bank’s head office is located at: 62 Sokolova Avenue, Rostov-on-Don, Russia, 344000. Telephone number, fax number: +7 863 2-000-000, +7 863 299-49-65.

Email address: welcome@centrinvest.ru. Website addresses: www.centrinvest.ru, центр-инвест.рф.

Number of bank employees at FYE 2015: 1,612.


at FYE 2015, %
of voting shares

25.25%European Bank for Reconstruction
and Development (EBRD)
24.43%Dr. Vasily Vysokov and Mrs. Tatiana
20.65%The German Investment
and Development Company (DEG)
9.11%Firebird Investment Fund
9.01%Erste Group Bank AG
7.49%Rekha Holdings Ltd
3.30%Raiffeisenlandesbank Oberоsterreich АG
0.76%Other shareholders

Assets and Liabilities Management

Center-invest Bank is very careful to ensure the correct balance between the scale of lending and the sources of funding. In 2015 the bank’s assets continued to be kept in the real economy, primarily in retail and SME lending, and at a time of economic crisis the bank managed the risks in its loan portfolio effectively. Amid market volatility, customers were reassured by our competent approach and transparency. In 2015 customer accounts grew at a faster pace, which allowed the bank to reduce expensive borrowings from the financial markets.

FYE 2015FYE 20142015 / 2014
Assets (RUBm)89 641100%91 316100%–1.8%
Net loans and leases72 67281%71 98079%1.0%
Cash and mandatory reserves with the Russian
Central Bank
12 59814%11 99913%5.0%
Other assets2 1002%5 0276%–58.2%
Fixed assets2 2713%2 3113%–1.8%
Liabilities (RUBm)89 641100%91 316100%–1.8%
Customer accounts,of which65 04072%49 21854%32.2%
retail customer accounts51 60357%37 59541%37.3%
business customer accounts13 43715%11 62313%15.6%
Equity10 60312%9 58510%10.6%
Debt securities in issue3 1723%9 06010%–65.0%
Funds from Russian Central Bank00%10 07911%
Borrowings from IFIs and banks10 40312%12 90914%–19.4%
Other liabilities4231%4651%–8.9%

Structure of the Loan Portfolio

FYE 2015

Breakdown by borrowers
Breakdown by maturities
> 1 year
Breakdown by sectors

Retail Customer Funds

In 2015 the bank substantially increased the amount of funds attracted from retail customers. We achieved this by offering the best possible terms and conditions for deposits, and by further improving our customer service offering (for example, customers can now pay into their deposit accounts via self-service payment terminals and online banking).

31.12.201531.12.20142015 / 2014
Retail customer funds, RUBm51 60337 595+37.3%
including term deposits46 64833 310+40.0%
Number of deposit accounts248 262220 629+12.5%
Interest expense for customer deposits and accounts, RUBm4 6332 661+74.1%

Payment and Services

In 2015 the bank accepted RUB17.3bn in bill payments from retail customers (+6.1%).

We continued to improve our processes for accepting bill payments from customers. The majority of payments are made in real time and do not require customers to complete payment requests. To speed up the process, the bank’s system reads the barcodes on bills. Moreover, payment recipients are gradually switching to electronic documentation systems. Customers can use the bank’s self-service terminals, ATMs and Internet banking service to make payments for various services.

201520142015 / 2014
Western Union and Zolotaya Korona money transfers, millions
Foreign exchange transactions, millions

Retail Lending

31.12.201531.12.20142015 / 2014
Retail loan portfolio, RUBbn36.67100%33.98100%+7.9%
Consumer loans18.8351.4%18.3754.1%+2.5%
Car loans2.466.7%2.326.8%+6.0%
Bank cards0.892.4%0.752.2%+18.6%

The bank continued its efforts to improve the population’s standard of living by offering consumer loans, mortgage loans and car loans. The bank is actively developing its loan products based on bank cards.

In 2015 Center-invest Bank issued 61,093 loans for a total of RUB16.91bn (2014: 61,397 loans for a total of RUB20.82bn). This included:

  • — 30,009 consumer loans for a total of RUB8.99bn;
  • — 1,954 car loans for a total of RUB1.26bn;
  • — 2,747 mortgage loans for a total of RUB4.88bn.

Retail lending increased by RUB2.7bn in 2015. The retail loan portfolio at year end was RUB37bn.

In 2015 we developed and introduced special mortgage programmes that allow customers access to unique loan offers with minimal documentation requirements. These programmes are proving very popular in southern Russia.

Center-invest Bank continued to participate in a number of government loan programmes. For example, we issued 200 mortgage loans for a total of RUB500m to borrowers receiving government subsidies to help them meet interest and capital repayments. This included mortgage lending under the Young Teachers programme.

Our retail customers continued to take out loans to make energy efficiency improvements to their homes. In 2015 we issued 4,624 such loans, for a total of RUB1.2bn.

In 2015 the bank agreed 26,383 card credit limits for a total of RUB1.78bn.

We made our “grace period credit card” even more advantageous and attractive for customers: upon the expiry of the grace period (a maximum of 55 days), customers do not have to pay off the balance in full, but only the money borrowed in the previous month (as at the last working day of the previous calendar month).

Center-invest Bank’s retail customers can now repay their loans using online banking. This option allows customers to manage their finances in a timely manner.

Loans issued2015
2015 / 2014
of loans
of loans
of loans
Consumer loans30 0098.9935 01511.70–14.3%–23.2%
Car loans1 9541.262 5441.54–23.2%–18.2%
Mortgages2 7474.883 4025.82–19.2%–16.2%
Bank card loans*26 3831,7820 4261,76+22,6%+1,1%
Total61 093 16.91 61 397 20.82 –0.5%–23.1%

* Number and value of credit limits agreed

Throughout the course of 2014-2015 all of the bank’s business units that are involved in retail lending transitioned to working with Terrasoft software, which is integral to the work of the retail credit committee and decision-making on other issues (collateral substitution, recalculating schedules, granting grace periods).

Customers can submit new loan applications on the bank’s website (www.centrinvest.ru) and also check the status of existing applications.

Bank Cards

Center-invest Bank is the only bank in southern Russia to have its own modern processing centre. This advantage enables us to systematically expand our services based on bank cards, and also to quickly introduce innovative products and services to a high standard.

There were many exciting developments for Center-invest Bank in 2015:

Center-invest Bank’s “grace period card” won the “Credit Card of the Year” category in the Banker of the Year awards run by the Banki.ru portal.

Center-invest Bank’s “grace period card” won the “Credit Card of the Year” category in the Banker of the Year awards run by the Banki.ru portal.

In 2015 Center-invest Bank was one of the first to sign up to Russia’s new national payment card system, “Mir”. We passed all of the tests for issuing and servicing Mir cards.

Center-invest Bank won Federal Treasury tenders to service the accounts and payment (debit) cards of public sector organisations in Krasnodar Krai and the Volgograd region. We are a reliable partner for the Federal Treasury, servicing the accounts used to make payments to public sector organisations in the Rostov and Volgograd regions, and Krasnodar Krai.

In terms of innovative technology, we launched a new bank product that allows customers to make payments with just one tap of their watch: the Watch2pay device with PayPass technology and a Center-invest bank card. This product can be included as part of any service bundle.

As well as the benefits of convenience, customers paying for purchases with a Center-invest bank card can now earn cashback. As part of the Universal, Premium and Exclusive service packages:

— under a joint project with Booking.com, customers who book a hotel using the Booking.com system on the bank’s website and pay using a Center-invest bank card will receive 5% cashback on the cost of their booking,

— a promotion was launched giving customers up to 10% cashback on purchases from our partners’ online stores (including AliExpress, Lamoda, Asos and MediaMarkt). Full information about the promotion is available on the bank’s website.

Center-invest Bank introduced new regulations on exchange rate conversions for bank cards, giving cardholders access to better exchange rates.

We launched a new product for our business customers who use a Center-invest Bank payroll programme: the “MasterCard-Bonus”. This product allows customers to enjoy savings on business expenses, and it makes our payroll programmes even more attractive and competitive.

Customers can now use their Center-invest bank cards to pay for services at self-service terminals.

To increase the security of bank cards, we introduced a safe payments service using 3DSecure online for MasterCard Worldwide cards. In addition, work was completed on certifying NCR ATMs for use with chip cards.

Bank cardsFYE 2015FYE 20142015 / 2014
Number of transactions75 000 00050 000 000+50%
Number of active cards280 969265 293+5.9%
Number of payroll programmes24662275+8.39%
Number of cards to service the accounts of Federal Treasury
14 29212 490+14.43%
Number of ATMs458437+4.8%
Number of goods and services providers using the bank’s payment processing centre26291896+40.66%
Self-service terminals227192+18.23%

To expand our merchant acquiring operations, we introduced new tariffs: when a company enters into an agreement with the bank for acquiring services, it can open a Center-invest Bank current account free of charge, and the account fee will reduce as its turnover increases.

Under our ongoing World of Discounts programme, over 200 goods and service providers offer discounts for Center-invest Bank cardholders.

Business Banking

In 2015 the bank continued to work on attracting more business customers. At FYE 2015, we had 54,250 business accounts (+3.7%). Center-invest Bank is continually expanding the functionality of its online business banking system, improving existing services and offering new features. For example, in 2015 we connected customers to a new service providing secure remote banking: SafeTouch and eToken Gost (for more information please see page 35).

The bank’s business customers make extensive use of remote banking channels. By FYE 2015, 37,500 customers were using remote banking (up 23%). As part of remote banking, we also introduced new services to facilitate communications between the bank and the customer.

To expand our customer base, we are continually enhancing our payment and cash management services. Providing a full range of modern banking services, we act as the main payment centre for our customers.

Center-invest Bank is authorised by the Russian Central Bank to service the accounts of pension and government funds. We also provide payment services to Federal Treasury departments in the Rostov and Volgograd regions and Krasnodar Krai.

In 2016 the bank developed new types of bank account agreements, thanks to which we can open and service a wide range of special accounts for our customers.

Business Lending

Center-invest Bank lends to companies and organisations operating in the real economy of southern Russia.

The bank has a team of skilled loan officers who ensure the high quality of our loan portfolio by carefully analysing the potential returns and risks when assessing loan applications.

The bank provides loans to finance promising, potentially profitable projects that are in line with its strategic aims. We do not engage in highly competitive but unjustified types of lending.

We develop long-term relationships with our customers. By looking carefully at their requirements and selecting the best loan product for each project, we enable our customers to be competitive in the new economic environment and to localise best international practice in the production of goods and services.

Thanks to our effective lending policy and experience in the lending market, we can maintain the quality and reliability of our loan portfolio.

We offer our customers a comprehensive range of finance products, including: credit lines, overdraft facilities, standard loans, bank guarantees, leasing, and trade finance for imports of goods and equipment.

At year end201520142015 / 2014
Business loan portfolio, RUBbn40.241.6–3.6%
Number of active loan agreements49625108–2.9%
Value of guarantees, RUBbn2.83.3–15.2%
Number of active guarantees21932022+8.5%
Number of new loan agreements43444829–10.1%
During the year201520142015 / 2014
Total value of agreements entered into, RUBbn34.934.7+0.6%
Volume of funds released, RUBbn89.287.7+1.7%
Number of guarantees issued24162603–7.2%
Value of bank guarantees, RUBbn3.73.9–5.1%

SME Lending

Developing entrepreneurship in southern Russia is a priority for Center-invest Bank under its 2016-2018 Strategy “Global Competitiveness in Transformations”. As SMEs have adapted to the tougher business climate2, we have seen a prudent reduction in borrowing. At the same time, Center-invest Bank’s ecosystem has proved the most attractive and reliable for entrepreneurs.

In 2015 we continued to work successfully with regional SME loan guarantee programmes in the Rostov region, the Volgograd region, Krasnodar Krai and Stavropol Krai.

Center-invest Bank has been running programmes to support SMEs in southern Russia for the past twenty years. These include not only a wide range of loan products, but also advisory and educational programmes:

— Our Business Loans for Women programme offers loans with a preferential interest rate and a grace period to businesswomen and companies providing services and/or selling goods for women;

— Under the Youth Business Russia programme, new entrepreneurs under the age of 35 can take out a RUB300,000 loan for up to 36 months at 12% per annum and with a six-month grace period. The programme also includes free online business banking for the first year and comprehensive advice and mentoring from successful business people. The mentors share their experience and help the new companies grow;

— For customers who want to start their own business, the “Start-Up” programme offers loans of up to RUB3m for a term of up to 36 months.

FYE 2015FYE 20142015 / 2014
Number of SME customers54 25052 300+3.7%
Number of active SME loan agreements4 7634870–2.2%
SME loan portfolio, RUBbn30.630.5+0.3%
Number of new loans made to SMEs during the year4 1384596–9.9%
Value of new loans made to SMEs during the year, RUBbn28.528.6–0.3%
Special loan programmes for SMEsFYE 2015
FYE 2014
2015 / 2014
of loans
of loans
of loans
“Start-up”, up to RUB3m, up to 36 months302510240416.8+25.8%+22.4%
“Youth Business Russia” togetherwith the International Business Leaders Forum (IBLF), RUB 300,000, up to 36 months125347520.3+66.7%+67.5%
Business Loans for Women250310175196.2+42.9%+58.0%

Structure of SME
loan portfolio


Energy Efficiency Lending

For the following international institutions, Center-invest Bank is the leading Russian partner for the implementation of energy saving projects: the EBRD, IFC, FMO, KfW, EDB, IIB and OeEB. Center-invest Bank finances projects to introduce energy efficient technologies in industry, agriculture, the service sector, the public sector, the housing and communal services (utilities) sector, and the private residential sector.

At FYE 2015, Сenter-invest Bank’s total investment to date in energy efficiency projects was RUB12.3bn (+22%). We have financed a total of 750 projects in the industrial, agricultural and service sectors, and 15,900 projects in the housing and communal services sector and private residential sector. The modernisation financed by the bank has reduced annual CO2 emissions by 159,200 tonnes (equivalent to the emissions produced or absorbed by 93,100 light vehicles, 454,900 barrels of oil, or 6.4m trees).

Our loan programme for the renovation of multifamily residential buildings is proving popular. Under Russian law, the owners of apartments in multifamily residential buildings have to pay monthly contributions to a capital repairs fund. This fund is used to renovate buildings in accordance with a regional capital repairs schedule. Center-invest Bank introduced a unique arrangement allowing our customers to take out a loan so that they can renovate their buildings straightaway. They pay the same contributions as before, but the money goes towards the loan repayments.

The bank’s success in financing energy efficiency projects is attributable to a fundamentally new approach: sustainable lending. This approach combines technical, financial and social engineering. In seminars and presentations, experts from Center-invest Bank share their unique experience of energy efficiency lending with representatives of Russian government bodies, municipal authorities, and financial institutions from various CIS countries, Eastern Europe, the Middle East, North Africa and BRICS countries.

In 2015 Center-invest Bank lent a total of RUB2.3bn for energy efficiency projects. This comprised: 4,185 loans to retail customers for energy efficiency improvements to their homes (RUB1.2bn); 7 loans to homeowners’ associations for capital repairs (RUB11m), and 120 loans to companies for the introduction of energy efficiency technologies (RUB1.1bn).

Agribusiness Lending

Agribusiness lending accounts for 11% of our business loan portfolio (RUB8.5bn).

The bank finances investment projects in all agricultural sectors. The finance is used to introduce modern technologies for production, improve the quality of soil cultivation and crop growing, and increase livestock productivity. We also provide finance for major fertiliser dealers, grain producers, grain traders and agricultural equipment dealers.

201520142015 / 2014
Number of borrowers in the agribusiness sector736686+7.3%
Number of loans made12241193+2.6%
Value of loans made, RUBbn8.17.6+6.6%
of which, loans for investment purposes, RUBbn2.11.8+16.6%

International Payments and Trade Finance

Center-invest Bank is a member of the international association SWIFT, which ensures rapid clearing of payments and the safe and reliable communication of financial messages to correspondent banks. The main currencies for payments are US dollars, euros, pounds sterling, Swiss francs and Chinese yuan.

Our network of correspondent banks includes: Citibank NA (New York, USA), Commerzbank AG (Frankfurt, Germany), Societe Generale SA (Paris, France), UniCredit SpA (Milan, Italy), Erste Group Bank AG (Vienna, Austria), Raiffeisenlandesbank Oberoesterreich AG (Linz, Austria), and Bank of Communications Co. Ltd (Shanghai, China). In 2015, transactions through correspondent accounts totalled USD1.2bn and EUR1bn.

Our trade finance partners in 2015 included banks from Germany, the Netherlands, Italy, China, and Greece.

In 2015, trade finance transactions amounted to USD 0.3m. By using structured trade finance mechanisms, we are able to minimise the risks and reduce the potential losses for our customers who are trading internationally.

Stock Market Trading

To reduce market risk, in 2015 the bank sold its whole securities trading book. (Bond portfolio at FYE 2014, RUB3.75bn; at FYE 2015, zero).

The annual return on ruble bond transactions in 2015 was 16.24% (2014: 0.87%).

International Trade Services

Center-invest Bank processes foreign currency transactions for its business customers who have international trade contracts. In accordance with Russian legislation, the bank holds “transaction certificates” for these customers, which provide evidence that the transfer of funds is legitimate. Center-invest Bank has been accepting a significant number of transaction certificates for customers who have switched from other banks because we offer more favourable terms.

Center-invest Bank works continually to boost southern Russia’s import and export trade. We hold special seminars and networking meetings where Center-invest Bank customers can meet customers of our partner banks from abroad. Together with our foreign partner banks, we arrange for our customers to visit trade fairs abroad so that they can make new business contacts and sign new contracts.

Volume of transactions under international trade contracts201520142015 / 2014
$ m203299–32.1%
€ m36 44 –18.2% 
₽ m7 2005 048+42.6%
¥ m3522+59.1%

Trust Management

At FYE 2015 the value of net assets under management was RUB156.9m (FYE 2014: RUB146.4m).

The annual rate of return for our bank-managed mutual fund (BMMF) Center-invest 1, which invests cash in Russian equities, was 39.5% (2014: –6.2%), while for BMMF Center-invest 2, which invests assets in bonds, it was 19.1% (2014: –3.3.%).

Information Technologies

Center-invest Bank’s priorities in terms of information technologies are:

  • — to expand the product line and remote banking services;
  • — to use innovation to optimise technical and business processes;
  • — to increase the reliability and productivity of the information infrastructure.

To strengthen its competitive advantages, the bank draws on its experience of introducing and expanding the functionality provided by leading global suppliers of banking software. Using its experience of introducing SAP for Banking, transformational banking methods, and its partnership with SAP AG, the bank succeeded in introducing a front office solution that is integrated with SAP Banking Services.

As part of their co-innovation partnership, Center-invest Bank and SAP AG continued their work on localising SAP software for Russia. The focus this year was on Loans and Deposits software. In 2015 the bank and SAP AG held several joint brainstorming sessions looking at how best to develop the product line. As a result of this collaboration and the introduction of SAP Banking Services, Center-invest Bank can set up new deposit products much more quickly.

In 2015 Center-invest Bank completed its work on optimising the retail lending process. The bank used information technologies to optimise the whole retail lending cycle: from receipt of loan applications, to drawing up loan documentation, to issuing loans. This project has reduced labour costs by 30% and halved the amount of time taken to assess applications. The number of online loan applications has tripled, and the bank’s loan portfolio has increased.

Our project to automate retail lending won a special prize “for IT innovation” at the RETAIL FINANCE AWARDS 2015. Founded in 2007, these annual awards recognise the standout companies in the retail finance business, and draw the attention of the professional community to the most significant achievements in the industry in the past year.

In 2015 Center-invest Bank introduced:

— “individual areas” for retail customers submitting loan applications. Customers can now save partly completed applications online and return to complete them at a later stage. They can also track the status of submitted applications. This new service enhances the existing service whereby customers can request SMS updates on the progress of loan applications;

— an option for customers to use self-service terminals and online banking to request information from government authorities about the payment of penalties for traffic offences, taxes and duties. Customers can also pay monies due;

— a new module in the retail online banking system that allows customers to manage their deposit accounts in a timely manner (obtain online information about their balances, transaction history, and pay in money);

— a new sub-system allowing business customers to set up and monitor deposits online. This enabled the bank to complete the automation of transactions and the calculation and payment of monies due under deposit contracts with business customers. This led to an influx of new customers, reduced the labour intensity of transactions, and expanded the bank’s liability funding base, and also its product line, thanks to more flexible conditions.

In 2015 the bank rolled out its electronic customer queue management system to all of its sites. This helped optimise human resources.

Throughout 2015 we expanded the capabilities of new software for self-service terminals. The new software package provided a number of advantages, enabling the bank to: expand the number of payment recipients; speed up the introduction of new types of terminal-based services; and reduce the time taken to connect the bank to the services of external service providers (by using existing integration gateways). Using the new software package we were able to address a number of business tasks, in particular, we introduced an option whereby customers can pay into deposit accounts at self-service terminals. More modern monitoring tools have simplified the administration of the terminals and made it easier to modify the user interface. The new capabilities led to an increase in the profitability of the bank’s terminal network, and also increased the fault tolerance of the system as a whole.

As always, a lot of attention was given to the information security of customers conducting financial transactions online. This resulted in the introduction of the new SafeTouch and eToken GОSТ technologies for our business customers and our own verification centre. The SafeTouch device displays the key data from payment instructions and guarantees that electronic documents are not signed until the user presses the “confirm” button. eToken GOST is a certified electronic signature device. By ensuring that our business online banking system can support these devices the bank has increased online banking security for its business customers.

In addition to working on the bank’s internal business tasks, our information technology departments also help to develop information communication technologies in southern Russia. In 2015, our IT experts played their part in developing Center-invest Bank’s ecosystem. They were involved in the following: developing the Rostov Region’s Information Technology Strategy; the work of the Public Chamber of the Rostov Region’s Ministry for Information Technologies and Communications; and training university students in the Financial Literacy Centre. They also took part in competitions for developers.

In 2015 the bank began working with the National Council for the Financial Market. This is a non-commercial partnership representing the interests of the financial community in dealings with government authorities. At the present time, our collaboration with the Council allows us to participate in pilot projects concerning the use of electronic government services. These include: obtaining data from the Pension Fund of the Russian Federation, and simplified customer identification using the Unified Identification and Authorisation System.

The bank upgraded the software, equipment and technology for its business units on a planned basis. It introduced new, up-to-date solutions that improve the reliability of the equipment being used. The requisite equipment and software is purchased on a competitive basis. Transparent procedures are used to select offers with the lowest price, proven reliability, a long warranty period, after sales servicing, and the shortest delivery times.

Branch Network

At FYE 2015 Center-invest Bank’s branch network comprised 132 branches located in the Rostov and Volgograd regions, Krasnodar Krai, Stavropol Krai, Moscow and Nizhny Novgorod. Center-invest Bank continues to actively develop its branch network: its extensive physical presence in southern Russia indisputably gives the bank a competitive advantage in implementing its development strategy.

Our branches offer business and retail customers a wide range of products and services on attractive terms, including: loans and leasing, deposit accounts, payments and cash management, money transfers, credit and debit cards, and payroll programmes. Irrespective of their geographical distance from Head Office, all of our branches adhere to the same high standards of customer care and the same work principles, and internal procedures are consistent throughout the branch network.

We are continually improving our branch network and making it more efficient. As well as modernising and updating the format of its existing branches, the bank is giving considerable attention to the use of modern technologies to deliver services to customers. We are working to increase the volume of products and services accessed via remote banking channels, including via the bank’s website. To capitalise on the increased functionality of its self-service terminals and ATMs, the bank is now working to provide customers with access to “24-hour zones” where they can conduct banking transactions and access services around the clock.

Regional breakdown for key indicators, RUBm

Loans and leasing
201520142015 / 2014201520142015 / 2014
Rostov region,
excluding Head Office
40 04338 345+4.43%29 15319 271+51.3%
Krasnodar Krai11 98613 118–8.63%2 6751 711+56.3%
Volgograd region3 0912 867+7.81%428229+86.8%
Stavropol Krai4 4754 240+5.54%330200+65.0%
Head Office17 68617 507+1.02%19 01716 184+17.5%
Total77 28176 077+1.58%51 60337 595+37.3%
Total % attributable to branches77.1%77.0%63.0%57.0%

In December 2015, we opened three small, modern branches in Nizhny Novgorod, providing retail banking services and products. Over 1,200 public sector employees have already become customers of these branches, having discovered for themselves the advantages of Center-invest Bank’s payroll cards and our attractive retail deposit and loan products. The branches are located in large districts of the city, and they have modern interiors and are easy to navigate.

In conjunction with the introduction of new technologies and optimisation of business processes, our branch network continually delivers high-quality growth for key indicators. At FYE 2015 our branches accounted for 77.1% of the bank’s loan portfolio and 63% of deposits. Thanks to our training and development programme for branch staff and increased staff multifunctionality, work productivity is continually increasing.

Internal Control

In 2015 the Internal Audit Service:

  • — helped the Board of Directors and Executive Board ensure the sustainable and efficient operation of the business;
  • — continually monitored staff compliance with agreed procedures, functions, remits and decisions;
  • — was involved in updating Center-invest Bank’s interdepartmental procedures for banking operations and also in developing procedures to assess, manage and monitor the risks involved in these operations;
  • — continued to further improve the internal control system on the basis of best international practice.

In 2015 the Compliance Service:

  • — assisted the Chairman and members of the Executive Board in fulfilling their responsibility for observance of corporate, regulatory and legal standards by means of developing, introducing and supporting effective management of regulatory risks;
  • — with regard to managing compliance risks, took measures aimed at: preventing compliance risks from arising; detecting, identifying and assessing any existing compliance risks; and minimising compliance risks;
  • — in order to minimise compliance risks, continually monitored compliance of internal processes with legislative requirements and appropriate standards of market conduct.
Checks conducted by the Internal Audit Service201520142013
Comprehensive audits of branches173216
Checks of cash and valuables71020
Investigation into customer complaints001
Audits of specific aspects of the work of business units867162
Audits of professional activities on the securities market444

Center-invest Bank continually monitors its compliance with all requirements on the prevention of money laundering and the financing of terrorism. The bank’s internal documents regulating activities in this area are based on the principle “Know Your Customer”, national legislation, and best international practice. In 2015 the bank continued to work on improving the co-ordination of the activities of its business units and increasing compliance monitoring.

Risk Management

Risk management is part of corporate governance and encompasses all areas of Center-invest Bank’s activities.

Center-invest Bank’s risk management strategy is based on a sustainable banking business model. It envisages that the bank will:

  • — be guided by best international practice in risk management and its own unique experience acquired over the course of many years;
  • — when assuming risks, aim for the optimum balance between the profitability of its business areas and the risks arising from them;
  • — use its knowledge of the target market and regional risks, and also effective decision-making procedures, to allow it to expand lending successfully without assuming excessive risks;
  • — prioritise growth in lending as this is the business area in which it can control risks most effectively;
  • — reject the classical model of reselling credit risks and using high interest rates to cover losses in favour of a model of active risk management. This requires the bank to conduct detailed analysis of borrowers and their businesses and also to advise customers on how to improve their business efficiency and business risk management;
  • — use a rational combination of risk assessment procedures when taking decisions;
  • — minimise market risks by rejecting speculative transactions in favour of lending to retail customers and the real economy;
  • — ensure that it has sustainable and diversified sources of funding and a balanced approach to managing liquidity and interest rates, based on its development strategy and an understanding of macroeconomic trends;
  • — manage operational risks effectively, work to prevent fraud, and ensure information security as its customer base grows rapidly and the use of remote banking channels increases;
  • — cover risks with sufficient provisions and capital in line with the requirements of the national regulator and the Basel Committee for Banking Supervision;
  • — continually develop risk assessment methodologies, tools and technologies at a time of rapid change in business requirements, external factors and the regulatory environment;
  • — provide for its business requirements and compensate effectively for the risks that arise in the implementation of a transformational banking strategy.

Center-invest Bank’s Risk Management Policy was produced in 2014 and approved by the Board of Directors in February 2015. The policy regulates our risk management procedures and is based on our current development strategy and Sustainable Banking principles.

Center-invest Bank’s risk management system covers the whole spectrum of risks arising from all the different areas of our operations.

By constantly tracking global, national and regional economic trends and their impact on regional and sectoral risks, the bank is able to both minimise the systemic and strategic risks of its operations at a time when global markets are highly volatile, and also to meet customer needs.

Center-invest Bank’s risk management system ensures that both the bank and its customers develop sustainably and that shareholder and depositor investments are protected.

Human Rights

♦ G4-HR1—G4-HR12Center-invest Bank’s loan agreements stipulate that borrowers must comply with applicable Russian legislation. Moreover, the criteria in the bank’s Environmental and Social Policy are applied when assessing all loan applications. Social risks are considered, including observance of human rights. Observance of human rights is also mandatory under the bank’s funding agreements with its international partners.

Training on human rights is provided as part of the process of familiarising new employees with the bank’s codes and policies.

All customers are checked for compliance with Russian legislation. The bank refrains from working with customers who violate human rights.

All of the bank’s security personnel have been appropriately educated in policies and procedures concerning human rights and the rights of indigenous peoples. The bank’s employees comply with applicable Russian legislation in all aspects, including human rights.

Any grievances raised with the bank are examined and monitored in compliance with applicable legislation.


Center-invest Bank is a member of the following associations:

— Association of European Business (AEB) (Chairman of the Board of Directors of Center-invest Bank, Dr Vasily Vysokov, represents the Rostov region);

— Rostov Region Chamber of Commerce and Industry (Dr Vysokov is a member of its Board);

— Russian-German Chamber of Commerce (Deutsch-Russische Auslandshandelskammer);

— German-Russian Forum (Deutsch-Russische Forum);

— Krasnodar Krai Chamber of Commerce and Industry;

— Rostov Region Employers’ Union, Russian Union of Industrialists and Entrepreneurs;

— Rostov-on Don Council of Directors, Bataisk Council of Directors.

The bank participates in the work of the aforementioned associations and pays membership subscriptions.

Dr Vysokov and Mrs Tatiana Vysokova have been elected to the following public bodies:

— The Rostov Region Public Chamber (Dr Vysokov is chairman of the Commission for Economic Development, Enterprise and Innovation);

— The Public Chambers of the following bodies: North Caucasus Internal Affairs Directorate (Transport) (Dr Vysokov, member), The Rostov Region Ministry of Property Relations (Tatiana Vysokova, member), Regional Inspectorate of the Federal Tax Service (Dr Vysokov and also Pavel Shvarz from Center-invest Bank, members);

— Boards of Trustees of Southern Federal University, Don State Technical University, Southern Russia Technical University, Rostov State Economics University (Dr Vysokov is a member of all four boards).

— Boards of Trustees of the Endowment Fund for Education and Science in the Southern Federal District (Dr Vysokov, chairman; Tatiana Vysokova, board member), the Southern Federal University Endowment Fund (Tatiana Vysokova, chairman), Don State Technical University Endowment Fund (Dr Vysokov, board member).

In addition to its membership of the above, the bank works with the following organisations: the Association of Russian Banks, the Association of Regional Banks of Russia, the Association of Rostov Region Municipal Districts, the Rostov Region Association of Homeowners’ Associations.

All of the bank’s business units actively engage with local communities. In 2015 the bank held 165 seminars and briefings for municipal bodies in southern Russia on current issues in banking, economic development, entrepreneurship, and housing and utilities.

The bank refrains from operations that would have a negative impact on local communities. In a timely manner, the bank communicates its anti-corruption policy and procedures to local communities and informs them of the impact of external risks. In accordance with Russian legislation, the bank informs law enforcement agencies of any incidents of corruption and breaches of the law. The bank refrains from financing political parties and it does not receive payment for its advice to political and non-governmental organisations. It participates in the public chambers of a number of government bodies.

In 2015 the bank received the following fines:

— RUB23,000 fine from the Federal Tax Service for late submission of information about customer accounts and other information.

All new applicants for a business loan undergo thorough assessment and are assigned a rating (using the criteria specified in the Environmental and Social Policy). This includes a society impact assessment.

All of the bank’s new products and services are assessed for their potential negative impact on society. The bank refrains from providing products and services that could potentially have such an impact.

Product Responsibility

Center-invest Bank: does not provide any products or services that have a negative impact on health and safety or that do not comply with regulations. It does not sell any banned or disputed goods or any goods that do not comply with regulations, including those on advertising, promotion and sponsorship;

Taking customer views into account, Center-invest Bank continually develops its products and services. It voluntarily and intentionally develops and sells products and services that help its customers raise their standards of living and run sustainable businesses.

The bank regularly and purposefully informs customers of its products and services through all forms of mass media. It uses information technologies to enable customers to select for themselves the most suitable terms on which to receive services.

By analysing customer feedback and using mystery shoppers, the bank monitors the compliance of its products and services with regulations and voluntarily assumed obligations. No significant deviations from regulations or voluntary obligations have been found.

The bank receives and responds promptly to numerous customer enquiries (annually, more than 1 million calls to the call centre and communications sent via Twitter, Facebook, Instagram and VKontakte).

The bank complies in full with legislation on banking secrecy and data protection. The bank has not received any fines concerning its provision of products and services.