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18.06.2012

International seminar held at Center-Invest Bank

On June 15th Center-invest Bank hosted a round table discussion, regarding the sustainable banking business model, which was attended by shareholders, partners, bank employees and representatives of academic circles and businesses.

The keynote speaker was the Chairman of the Board of Directors, Professor and Doctor of Economics V. V. Vysokov, who presented the results of stress testing prospects for regulatory authorities, as well as a comparative analysis of the basic business model of banking (speculative, state, and stable Islamic banking).

Center-invest Bank has for many years successfully implemented and used a sustainable business model in banking. The model is based on long-term profitability and has demonstrated its viability and effectiveness in the current crisis.

Basic indicators of Center-invest (IFRS) (Mln Rub)

  1Q2012 2011 2010 2009 2008 2007
Capital 6,9 6,7 5,8 5,4 5,5 5,2
Assets 54,5 54,4 48,3 42,9 50,7 39,5
Net Loans and Leases 44,5 42,5 30,6 26,3 30,7 28,7
Deposits 38,1 39,0 33,8 27,8 21,3 19,2
Profit 0,24 0,90 0,2 0,7 0,3 0,7

Sustainable banking allows Center-invest Bank to engage in a more rigorous self-regulation of corporate behavior, improve its strategic business planning, report on international and Russian standards and engage in careful asset and liability management. It is based on the real economy and comprehensive internal control, as well as risk management through a combination of formal methods and content. This allows for the continuous development of operations, products and relationships with customers and investors. Achieving profitability in the face of fierce self regulation is only possible through the use of the world’s best practices within our work.

This is the same principle Center-invest Bank implements into its work with its clients, helping them to acquire new equipment and technology that is 3-5 times more efficient than its existing facilities and allow them to manufacture products that are competitive in global markets. The success of sustainable investments can be seen clearly by the effect modernization has had on small businesses. So much so that consulting firm Finist* has awarded Center-invest Bank 1st place in Russia in terms of quality and the financing of small and medium-sized enterprises. RBC.ru also rated Center Invest 17th place in it’s rating of services rendered to the public in terms of finance agriculture and energy.

During the discussion at the round table E. Welteke (ex-president of the Bundesbank), P. Fisher (Senior Vice President of Commerzbank), A. Zeisler (Head of Financial Institutions DEG), A. Klingen (President of ERSTE Bank, Ukraine) A. Snegirev (Vice-President of Raiffeisenlandesbank Ooe), as well as representatives of City Bank, Troika Dialog, investment funds and Firebird Renaissance Capital, all stressed that the success of the sustainable development approach implemented by the bank is largely related to the effective management of regional risks.

A wider spread of this business model to other regions would only be possible through changes in banking regulation at the international level and within individual states. A crisis is difficult to predict, so we must be prepared. We must also take heed from the experience of German banks, which for centuries were focused on the sustainable development model, the system was not safeguarded against the temptation to make a profit on speculative markets. Sustainable banking requires banks to continuously improve on its work and engage in the active formation of a new generation of both their employees and clients.

Participants of the round table expressed great interest in the success of the implementation of Center-invest’s business model of sustainable banking, and have offered to discuss the ideas presented at the round table at other international forums.

The index is produced by the consulting firm Finist, together with the National Institute for System Studies of the Problems of Enterprise. (www.finistconsult.ru)

Round table “Sustainable banking”
(in Adobe Acrobat Reader)