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Center-invest Bank is ESG Banking Leader in Russia

The Executive Board announced Center-invest Bank’s results for 2019 at a press conference held on 5 February. The bank’s main development trends were: affordable lending for retail customers and small business, the digitalisation of banking products, acceleration of a new generation of entrepreneurs, and responsible investment in energy efficiency projects.

Center-invest Bank’s profits for 2019, calculated under IFRS, exceeded RUB1.8bn. The bank improved its balance sheet structure (assets RUB120bn, loan portfolio RUB85bn, capital RUB14.3bn) and increased its reliability and investment appeal.

In 2019 the Moscow Exchange listed a RUB250m Center-invest Bank green bond issue in its Sustainable Development Sector. This was the first bank issue of green bonds in Russia. "This was an important event, not only for the bank, but for the whole financial sector," said Lidia Smirnova, Chairman of Center-invest Bank’s Executive Board. "Every investor who purchases our green bonds will be contributing to environmental protection and sustainability in southern Russia. For every 100,000 rubles of green bonds, CO2 emissions can be reduced by 2,000 tonnes, equivalent to planting 65 trees."

The key difference with these bonds is the purpose for which they were issued: the funds from the bond issuance will be used to finance and refinance loans for energy efficiency projects and renewable energy and to finance green transport.

Center-invest Bank started providing "green" loans in 2005, financing energy efficiency projects for small business, retail customers and homeowners’ associations in Russia. To date, we have financed over 20,000 projects, lending in excess of RUB17.5bn.

As well as delivering growth for its key performance indicators, the bank is contributing to the United Nations Sustainable Development Goals (investments of RUB86.7bn) and the Russian Federation’s National Projects (investments of RUB79.3bn).

"With responsible investment in the real economy, long-term customer relationships, openness and business transparency, and a strong corporate culture, we can look to the new financial year with optimism," says Sergei Smirnov, Deputy Chairman of the Executive Board for Reporting, Analytics and Finance. "Our interest rates for many types of loans are close to European rates: we offer government-subsidised agricultural loans with an annual rate of 1-3%, and preferential mortgages for families with children with a 4.5% annual rate."

As part of its ESG-digitalisation strategy, Center-invest Bank continually enhances and adds to its online services for retail and business customers, increasing the proportion of active customers using mobile applications and remote banking channels.

"Digitalisation is a key growth driver for the banking sector," says Yuri Bogdanov, Center-invest Bank’s Director of Innovations. "With the development of mobile banking and the automation of decision-making, we are able to attract more customers and to offer them low rates for loan products, thereby growing our business. We aim to make our products accessible not only for customers in the six regions where we have branches, but also in other regions. To this end, our team is working with the regulator on integration with the online Marketplace and adapting biometrics technology for the extensive penetration and maximum accessibility of banking services."

Center-invest Bank’s partnership with the Rostov region’s multifunctional centres for central and local government services (MFC) attests to an increase in the penetration of digital technologies for the provision of government services. As part of a pilot project launched in January 2020, the bank installed its payment terminals in 300 MFC service desks in the Rostov region. By the end of the year the bank plans to equip over 1000 MFC service desks with terminals for cashless payments and to replicate this project in Krasnodar krai and Stavropol krai.

The ESG-banking business model is a key trend in the global financial markets. Center-invest Bank’s experience is an excellent example of the successful implementation of ESG-banking in Russia, and it has received international recognition. In 2019 Center-invest Bank became a member of the Global Alliance for Banking on Values (GABV) — a network of banks using finance to deliver sustainable economic, social and environmental development. Center-invest Bank also became a signatory to the UN Principles for Responsible Banking, which guide leading financial institutions worldwide.