Russian financial sector has always been characterized by high risks and this feature makes  achievements of the banks, which could not only stay afloat, but also increase the volume of their business and create a loyal customer base, more convincing. Of course, Transstroibank is one of such financial and credit institutions, which celebrates its twentieth anniversary this year. Petr CHITIPAKHOVYAN, the President of the JSCB "Transstroibank" (CJSC), has told in an interview NBJ about principles the bank adheres to in its work as well as objectives set.

NBJ: Petr Stepanovich, Transstroibank has successfully operated in the bank­ing market since April 1994. Tell us, please, about the establishment of the bank. What has been taken as a basis for its activity?

P. CHITIPAKHOVYAN: Indeed, Transstroi­bank is one of the oldest financial in­stitutions of the Russian Federation. It was established in a difficult period -the 1990s, and the main purpose of its activity was the organization of transpar­ent and clear financial services of a group of companies, established the bank, and its partners. However, Transstroibank very soon turned into a universal credit organization and passed with honor all the difficult stages of development of the Russian banking system.

The key principle of the bank's ac­tivity is the preponderance of liquidity over profitability. It means that our fi­nancial and credit institution gives pri­ority to precision in the fulfillment of its obligations and adheres to a con­servative approach in the assessment of banking risks. Maybe that's why Trans-stroibank did not become one of the largest financial institutions in Russia that could be done if pursuing the ag­gressive policy. Then it has always re­mained a reliable partner for its custom­ers and counterparties.

NBJ: Which one of the moments of his­tory of Transstroibank is the most inter­esting for you?

P. CHITIPAKHOVYAN: As a rule, the most memorable moments are either the most complex or successful. Through­out its existence, Transstroibank passed through many events of the formation of market economy in Russia, such as "Black Tuesday" 1994, the crisis in Au­gust 1998, the crisis of confidence in banking system in 2004, and, finally, the global crisis in 2008-2009. At the same time, no negative events inter­fere with the bank to follow the path of systematic development. The bank has a history of financing the large infra­structure construction projects in var­ious regions of our country, such as a comprehensive reconstruction of the railway line Moscow - St. Petersburg, projects for development of the Sakha­lin shelf (Sakhalin-1 and Sakhalin-2), a project for construction of a ring road around St. Petersburg, a project for construction of a highway Chita-Khabarovsk and other interesting and complex objects. The Bank has active­ly participated in the creation of a net­work of hotels "Marriott" and continues to fund this program.

NBJ: The bank's customers talk about a special approach and uniqueness of the credit institution. What is its uniqueness?

P. CHITIPAKHOVYAN: The basis of cus­tomer policy is an individual approach to each client.

The bank strives to analyze the en­tire customer's business in order to con­struct the optimal structure of the trans­action, ensuring stability of the financial activities of the company in the future. We seek to grow our customer's busi­ness, getting a reliable partner for the long term.

NBJ: As you already noted, the bank has participated in financing of a number of major projects of state significance throughout its activity. What kind of experience has the bank earned due to participation in such programs?

P. CHITIPAKHOVYAN: Participation of Transstroibank in financing of the above-mentioned projects of state sig­nificance has taught the bank to un­derstand the smallest nuances of cus­tomer needs. Since 1999, our financial and credit institution has used a unique technology of cash management ser­vices and support for major construc­tion projects. At the same time, all the contractors (from general contractor to subcontractor and their partners) open accounts in Transstroibank that ena­bles us to trace the entire "cone" of pay­ments to any depth, providing a maxi­mum speed of payments and transpar­ency in all phases of the project. This technology allows completing the con­struction within the original budget and avoiding its excess. We also have other interesting products for different fields of activity. For instance, serving a net­work of hotels "Marriott" in different regions of the country helps us devel­op both our network of representatives, and special technology of work with such large companies, meeting the most modern international requirements. We also fund the development of serious in­dustrial assets in the country.

NBJ: What Small and Medium Enterprise industries does the Bank operate today in? What are the priorities for the devel­opment of corporate service business?

P. CHITIPAKHOVYAN: It is fair to say that, unlike the developed foreign countries with the overwhelming proportion of gross domestic product generated by enterprises referring to small and medi­um businesses, this segment of econom­ic entities in Russian "generates" only about 20-25 % of GDP. Meanwhile, it is commonly recognized in the civilized world that the normal state of this seg­ment is the basis for successful econom­ic development of a particular state and the key to improve social standard of liv­ing. In other words, small and medium enterprise is the basis of the stability of human civilization.

Small and medium-sized business entities are the basis of Transstroibank customer base, and now the bank active­ly funds them under the state program on support for small and medium-sized enterprises (SMEs), which has been im­plemented by us since 2010 in partner­ship with OJSC "SME Bank". And since 2013 the bank participates in the ongo­ing program of OJSC "AFHC" for stim­ulation of lending (loans) for the con­struction and purchase of housing (the program "Stimulus"). In addition, the bank actively provides various forms of credit for both the development of a business from scratch and stable working organizations. Transstroibank mainly specializes in serving clients in the fields of activity such as hospitali­ty, tourism and catering, development, construction, real estate, wholesale and retail trade, and leasing.

Transstroibank aims to become a platform for co-operation with its cus­tomers and partners. We develop prod­ucts, which allow amalgamating the in­terests of customers, operating in relat­ed economic sectors. For example, when implementing a construction project, the bank may offer lending not only to the main project operator, but also to the gen­eral contractor (against its securities). But all this is done with an adequate and bal­anced assessment of credit risk.

NBJ: What role does a general contrac­tor play in this case?

P. CHITIPAKHOVYAN: In this case, it is re­ferred to a client, who will receive loan from the bank on its securities to com­plete the construction. Of course, lending to such customer is done with an adequate and balanced assessment of credit risk.

NBJ: Tell us, please, how the bank sur­vived the crisis in 2008. What do you think to be the secret of stability and longevity of Transstroibank?

P. CHITIPAKHOVYAN: The crisis of 2008 had a serious impact on absolutely each field of activity whether it is a trade or industrial manufacturing or banking sector. Transstroibank was affected by the crisis just like any other financial institution. Capability of the company management to calculate the econom­ic outlook for a certain period and pre­pare to future changes is of great im­portance in any business. The manage­ment of the bank predicted the crisis in three-four months prior to its occur­rence, and ordered to significantly re­duce operations in the interbank mar­ket, to withdraw funds from the securi­ties market, being bent on self-restraint in the profitability of operations and causing a considerable surprise to busi­ness colleagues. As a result, the bank met the crisis, being prepared for it. Due to competent asset management policy, the risks were minimized that is essential for any financial institution. The customer loyalty and sustainability of businesses of borrowing customers were no small positive factors. All this, together with the adoption of a series of measures for cost minimization, helped Transstroibank to stay practically unaf­fected by the crisis.

Despite the unfavorable crisis, the bank was actively engaged in attract­ing and expanding it's customer base by positioning itself as a bank with stable and reliable capital. Our credit organi­zation has managed to expand its cus­tomer base for constant operation. All our customers trust us, which is one of the key factors of stability and longevi­ty of the bank.

NBJ: What is your vision of the future of the Russian banking market in the cur­rent, quite complex economic situation?

P. CHITIPAKHOVYAN: The banking sector has always been a market with certain risks. Nevertheless, the banking activi­ties will be maintained and developed, undergoing constant changes. Devel­opment of market relations in nowa­days is impossible without a diverse and high-quality provision of banking services. The availability of the exist­ing banking community, which got the opportunity within the Association of Russian Banks to be aware of its role in the life of the country and to pre­sent its views on the various levels of state authorities of our country, is high­ly important for further development of banking system. Currently, the Bank of Russia is actively engaged in cleaning the banking sector from unscrupulous stakeholders, whose presence adverse­ly affects the reputation of the banking system as a whole. There is an increase in level of requirements for bank capital and their transparency. Such policy is reasonable as the consumer of banking products must be sure that his savings are in safe keeping. The future pivots on the banks, which will be able attracting the best customers and provide them with advanced services. Therefore, the main principle of Transstroibank activ­ities is stability of the bank determined by the quality of its clients.