In 2017 Center-invest Bank celebrated its 25th anniversary. This was an excellent opportunity to reflect on our history and to look to the future with confidence. On the eve of this anniversary, the bank welcomed a new shareholder: responsAbility Investments AG, a leading Swiss fund, acquired a 10% share in Center-invest Bank. The fund was attracted by our focus on developing the local economy: small business, agribusiness and energy efficiency.
For the past 25 years, Center-invest Bank has focused on sustainable development and responsible business practices based on ESG principles. Last year was no exception.
The key indicators demonstrate the bank’s ability to operate in a complex financial and economic environment and to evolve in a rapidly changing situation.
In 2017 Center-invest Bank increased its market share and demonstrated sustainable growth in a fairly challenging macroeconomic environment.
The key financial indicators for 2017 are presented below:
Center-invest Bank’s key indicators,
Thanks to its stable, sustainable and balanced asset structure, in 2017 Center-invest Bank achieved strong returns on equity and assets.
In 2017 Center-invest Bank’s profits calculated under IFRS were up by 42%, to RUB1.4bn, while net assets increased by just 6.3%.
Customer accounts as a percentage of total liabilities continued to increase (by 8.4% in 2017), which confirms that the bank enjoys a high level of trust among the population of southern Russia.
The bank’s loan portfolio increased by RUB7bn (+9%) in 2017, to a record RUB86bn. The stable growth in the loan portfolio is attributable to the bank’s constantly updated loan programmes, low rates for retail loans, and comprehensive support for entrepreneurs. Growth in the loan portfolio was driven by retail lending.
Structure and dynamics of the loan portfolio
The retail loan portfolio increased by RUB7.5bn (+17.7%) in 2017 to RUB49.9bn at year end (2016: RUB42.4bn) and comprised 140,413 loan agreements (104,852 in 2016).
Structure and dynamics of retail lending
Retail lending is based on our sustainable banking business model, thorough assessment of borrower risks and the management of these risks. This allows Center-invest Bank to provide loans at low rates.
In 2017 Center-invest Bank issued 49,518 loans for a total of RUB27.3bn (2016: 44,493 loans for a total of RUB23.5bn). The growth in the number of mortgage loans is particularly notable: in 2017, 6,739 loans were issued for a total of RUB12bn, an increase of more than 19% on 2016.
We do not engage in the practice of providing express loans in retail outlets. Instead, we give preference to customers with a good credit history, our own depositors, and participants in Center-invest Bank payroll programmes.
ranked 18th among Russia’s largest banks for volume of mortgage lending in 2017.
In 2017 the bank continued to participate in government loan programmes. For example, we made 146 mortgage loans for a total of RUB239m to borrowers receiving government subsidies towards interest and capital repayments. This included mortgage lending under the Young Teachers programme.
Center-invest Bank is the only bank in southern Russia to have its own modern processing centre and three card personalisation centres (in Rostov-on-Don, Krasnodar and Volgograd). This allows us to systematically expand our services based on bank cards and to introduce innovative products and services quickly and effectively.
In 2017 Center-invest Bank issued 151,990 VISA International, MasterCard Worldwide and Mir cards. At FYE 2017 there were 396,686 cards in circulation. Center-invest Bank cardholders carried out 120 million transactions in 2017 (+23.7%).
The bank’s acquiring network comprises 11,266 ATMs, payment terminals and POS terminals.
Number of transactions, million
Number of active cards, thousand
Number of payroll programmes
Number of goods
and services providers
using the bank’s payment
Number of self-service terminals
As well as the convenience of card payments, Center-invest Bank offers its customers the added benefit of a loyalty programme which provides access to discounts when paying by card for various types of products (www.promo.centrinvest.ru). Customers can also take part in various promotions run by the payment systems. The bank is continually expanding the list of companies participating in this programme.
Center-invest Bank was one of the first banks in Russia to participate in the Mir payment system. We continue to be actively involved in issuing Mir cards and developing their functionality to meet customer needs.
Center-invest Bank’s “People’s” card was ranked by the Banki.ru portal as the best free Mir card in 2017.
Retail Deposits and Services
In 2017 retail customer deposits and accounts increased by RUB3.5bn to RUB64.2bn at year end. This increase was accompanied by a decrease in the cost of the funding in line with the overall market trend: the weighted average interest rate fell by 2% in 2017 to 7.4%. These results show that our deposit accounts and account servicing options are attractive, and that we are achieving broad coverage of all sectors of the population and retaining customer trust.
In 2017 the bank continued to improve its payment and cash services for retail customers. Payments for various services 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 and QR codes on bills.
In 2017 the bank accepted RUB14.5bn in bill payments from retail customers (including utility bills), and 63% of these payments were made using self-service terminals, ATMs and Internet banking, an increase of 18% on 2016.
The bank processed USD12.5m, EUR0.6m and RUB1220.7m in Western Union and Zolotaya Korona money transfers. Cash foreign exchange transactions totalled USD49.9m, EUR25.8m, GBP2.2m, CHF1m and CNY0.8m.
Center-invest Bank introduced its first programme for SMEs back in 1997 and working with SMEs has remained a priority ever since. Today we have over 67,000 SME customers.
Center-invest Bank is one of the top five Russian banks by volume of SME lending. We rank in third place for size of SME loan portfolio and in fourth place for our sole trader loan portfolio (RAEX rating).
In 2017 lending to SMEs, sole traders and start-ups remained strong, with over 5,000 customers receiving a total of RUB87bn in finance. We reduced the interest rates for our SME loan programmes twice during the year.
The bank participates in government programmes to support SMEs. For over eight years, we have been working effectively with the SME loan guarantee funds in the regions where we operate. These funds can guarantee all types of loan, and such guarantees are one of the most liquid types of security.
As in previous years, agribusiness lending accounted for a considerable proportion of the bank’s business loan portfolio: 25%. The bank works with the best agricultural companies in southern Russia. The sector accounts for a quarter of Russia’s agricultural output.
In 2017, the bank issued 1,341 loans for a total of RUB9.4bn to agricultural companies. One quarter of these loans were for investment purposes. The agribusiness loan portfolio is RUB9.1bn.
On 6 September 2017 Center-invest Bank was included in the list of credit institutions authorised to participate in the government’s preferential agricultural lending programme. This programme provides loans with a maximum interest rate of 5% per annum for working capital and investment purposes. The list of authorised credit institutions is approved by the Russian Ministry of Agriculture. The bank’s inclusion in this programme confirms its status as one of southern Russia’s leading banks for agricultural lending and support.
Guided by best international practice, the bank finances investment projects in all agricultural sectors. These include projects to improve soil quality and crop production and to increase livestock productivity. The bank’s customers include leading fertiliser dealers, grain producers, grain traders and agricultural equipment dealers.
Unique Loan Products
To date, Center-invest Bank has lent a total of RUB716m on preferential terms to 619 new entrepreneurs. As well as offering preferential loan terms, we run various financial literacy training events and seminars for start-ups, and they can open a bank account with us free of charge. We also have a mentoring scheme whereby experienced business people advise start-ups. This scheme is mutually beneficial and rewarding for both the mentee and the mentor. In 2017 we had ten mentors working with fourteen new entrepreneurs.
These services are not philanthropic or a marketing ploy; they are a practical approach to managing entrepreneurial risk.
Under its special loan programme for women in business, Center-invest Bank has made loans on preferential terms for a total of RUB710.6m to 469 businesswomen. There have been no defaults on these loans.
In 2017 we launched a new business development loan programme for social enterprises in the following sectors: educational services, health and wellbeing, revival of cultural and historical traditions, domestic tourism, and the environment. Under this “Social Responsibility” programme, the bank has financed 16 projects with loans totalling RUB47.5m.
Focus on Energy Efficiency
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. All projects are financed in accordance with the bank’s Environmental and Social Policy, which is approved by the Board of Directors and agreed with the leading financial institutions that are Center-invest Bank’s partners.
The bank finances projects to introduce energy efficient technologies in industry, agriculture, the service sector, the public sector, utilities, and the private residential sector. At FYE 2017, Сenter-invest Bank’s total investment to date in energy efficiency projects was RUB17.1bn (FYE 2016: RUB13.7bn). We have financed 22,000 projects.
The modernisation financed by the bank has reduced annual CO2 emissions by 179,000 tonnes (equivalent to the emissions produced or absorbed by 105,000 light vehicles, 513,000 barrels of oil, or 7m trees).
Center-invest Bank remains the only bank in Russia that provides homeowners with finance to renovate multifamily residential buildings.
To date, we have financed over 100 successful projects. In 2017, as part of a subsidised loan programme being piloted by the government, we made 25 loans to homeowners’ associations, for a total of RUB42.5m. The interest rate on our loans for housing renovations is 11% per annum. With the government subsidy (equivalent to the Russian Central Bank’s refinancing rate), the rate is 2.5-3% per annum.