Annual Report 2010


Strategy

Bank Vozrozhdenie’s business development focuses on key areas of corporate and retail demand to ensure long-term growth of shareholder value.

The Banks main priority is to offer a full range of banking services to both companies at all stages of their development and individuals at any point in their life. Bank Vozrozhdenie aims to constantly improve customer service, establish long-term client relationships and promote its brand. Our client policy aims to achieve a high level of client loyalty through brand positioning, an optimal product offering and high standards of service.

Key aims in the development of our client base are to increase the number of sales of different products to new and existing clients and proactively use the potential in the Banks corporate client base to attract retail clients from their long-term employees with stable incomes. Special offerings may be produced for this segment. With an extensive line of modern banking services, the Bank focuses on proactive development of cross-selling and increasing non-interest income as a share of its revenue structure.

Bank Vozrozhdenie focuses on sustainable growth by developing our business and increasing our clients prosperity. Their funds remain the principal source for funding the Banks operations.

Bank Vozrozhdenie operates in three key segments: retail, corporate and financial markets.

  • In the corporate segment, Bank Vozrozhdenie targets long-term collaboration with clients by offering not just an individual service but an essential set of products. The bank plans to expand its client base by attracting customers from the SME sector, through individual work with major clients and by targeting clients whose offices overlap with the Banks branch network. A key factor in our success is our complex approach to serving each individual client and its employees, improving quality of service, and our differentiated approach to different client segments.

    A priority client segment is SMEs, and the Bank intends to increase their share of its loan portfolio. As well as actively seeking out new borrower companies, the Bank intends to develop its loan products by improving its existing credit products and launching new ones. In expanding its corporate funding base, Bank Vozrozhdenie will focus on working with resource-rich companies, as well as on attracting smaller deposits from major clients to diversify its deposit book. Priorities in the corporate segments remain increasing the number of products used by each client, and also boosting clients usage of the Banks non-branch service offering.

    Bank Vozrozhdenie plans to pro-actively develop its bank-card service infrastructure as the main means of attracting corporate clients for payroll projects. Here the main areas of focus will be to maintain the Banks leading position in Moscow Oblast and to provide active support to the corporate segment at regional branches.
  • In the retail segment, the main product offerings are deposits, consumer and mortgage lending, and payments and cash services for individuals. Bank Vozrozhdenie sees funds from individuals as a major source of funding for its operations, and generally as a stabilizing factor in the Banks activities, including at times of market volatility. We intend to maintain our position as one of Russias 15 largest banks by retail deposits. In a stable macroeconomic environment, the Banks business plans will enable it to secure deposit growth above the market average. Individual deposits will comprise at least 40% of the Banks balance sheet.

    Bank Vozrozhdenie shapes its loan portfolio based primarily on quality and yield. It plans to run lending operations for the most part among existing clients with a proven credit or payments history, as well as among individuals working at its corporate clients. Mortgage lending remains the Banks major credit segment. The accessibility of long-term sources of financing is the key to developing this business line further.

    Another priority area for the Bank is cross-selling of retail products using bank cards and supporting increased use of self-service facilities, which the Bank plans to gradually migrate to modern remote channels: internet and mobile banking.
  • Non-interest income is an extremely important element in the Banks revenue, particularly at times of interest-rate volatility. Growth rates of non-interest income in the retail business are directly correlated to loan volumes and payments and cash operations and should match their planned growth rates. In its financial-markets operations, Bank Vozrozhdenie intends to further diversify its securities book to support long-term liquidity at an adequate level, to reduce its levels of risk and increase asset yield. The Bank continues to develop instruments for reducing risks arising from financial-markets operations, including currency, interest-rate and market risk.

To support long-term growth across all business segments, Bank Vozrozhdenie plans to create an efficient infrastructure to meet key business goals. To increase the quality of service offered to clients, the Bank focuses on balanced development of its sales network through its offices and self-service facilities. We adhere to a strategy of gradual regional expansion, and plan to focus on regions where the Bank already has active branch offices. The number of sales points will be increased to meet market demand in each specific region and within the limits set by the Banks business model. Further development of the Banks sales infrastructure will focus for the most part on Moscow Region and neighboring areas, and on the Southern and North-West areas of the country.

The Bank sees IT as a major factor in maintaining its competitive advantages and increasing the quality of service offered to clients, as well as in improving management by using the latest information and communications technologies. In 2011, the Banks IT activities will focus predominantly on boosting the quality of our IT service offering, and also on developing and introducing internet and mobile banking.

The Banks marketing strategy is intertwined with its key business goals. It aims to strengthen the Banks competitiveness and increase customer loyalty and satisfaction by developing sales channels (including the branch network), by offering products that match client requirements more exactly than those of competitors, by ensuring high standards of customer service and by developing the Banks brand.

We consider customer satisfaction and loyalty to be an objective measurement of the effectiveness of our marketing strategy. The Bank aims to be among the market leaders on these indicators among both corporate and individual clients.

The Banks brand is an important asset. Our goal for the next five years is to establish ourselves among Russias five leading banking brands in all key regions where the Bank is present. We will develop the Banks brand based on the understanding that our most valuable asset is our client relationships. We work in genuine partnership with our customers, and our relationships are built on being responsive, humane and reliable. We are the Bank that can be relied on in both good and more difficult times. It is these relationships with our clients that differentiate us from other banks today and will continue to do so in future.

The Bank aims to promote its brand as a whole, rather than individual products, using all possible means of communication: television, radio, outdoor advertising, print media, the internet and targeted communications.

In 2011, the Bank plans to make broad use of direct, targeted communications based on detailed client segmentation using special software to analyze its database.

A particular emphasis is placed on quality of service.

Service-quality issues include measures in four areas:

  • Approval of “Service Standards” for all employees involved in direct communication with clients; the Bank plans to improve the Service Standards as client demand requires
  • Staff training
  • Motivation of personnel
  • Staff management based on adherence to the Service Standards and product knowledge through the use of regular mystery shopper research and customer-satisfaction surveys

Our public relations program is a priority area in our brand-development strategy. The Bank attaches great importance to providing timely, reliable and complete information to partners, customers and shareholders about the day-to-day life of the Bank, its goals and results. Transparency and openness of information form part of the Banks development strategy.

Bank Vozrozhdenies strategy includes ongoing corporate governance development in accordance with best international practice and the interests of shareholders. The bank intends to improve the efficiency of the Board of Directors, including by establishing new committees on strategy and corporate governance, launching self-assessment procedures, and also by optimizing interaction with the Banks executive management. We also intend to increase the role of the Board of Directors in our risk-management function by creating a risk committee, and improving the way in which we provide information to Board members in this area. We see further improvements to procedures aimed at avoiding conflicts of interests between all stakeholders at the Bank as an important aim.

The Banks risk management strategy targets further improvements to the risk-management system appropriate to the Banks business goals and the quantity and extent of assumed risks. It is based on meeting the Banks strategic goals as set out by the Board of Directors. High-quality risk management is a competitive advantage that improves the Banks capitalization.

Bank Vozrozhdenies HR policy targets the realization of each employees potential. The Banks priorities in this area include motivating employees to achieve key business goals, creating an effective internal-communications function, and developing employees professional potential.

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IR contacts

Tel.:  +7 (495) 620 9071
Fax: +7 (495) 620 1953
Web-site: http://www.vbank.ru
Email:  investor@voz.ru

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