A mid-sized bank in terms of assets is often less known to the general public as compared to its larger and more prominent industry peers. However, such banks and companies being comparable to it by key financial indicators are the mainstay of Russian regions’ economy. The role, the so called mid-sized banks are destined to play and do play, was discussed by Natalia DEVYATUIKH, the Chairman of the Management Board and a member of the Board of Directors of Zarechye Bank.

NBJ: Natalya Vladimirovna, here is my first question I would like to ask you about Zarechye Bank. Could you please tell a brief story of its foundation.

N. DEVYATUIKH: Zarechye Bank traces its history back to the Kyrov Branch of the USSR’s State Bank created as early as in 1940 in the city of Kazan. The bank become a commercial one and acquired its current name in 1990. Zarechye refers to the historical name of the industrial district of the city on whose territory the financial organization was registered. From the very outset of our business, we held Zarechye out as a bank cooperating with industrial enterprises and investing in real economy.

NBJ: As far as we are aware, your Bank is not a major one and is rated in the middle range of Russian banks in terms of assets.

N. DEVYATUIKH: Yes, it is in fact. By various rating indicators, we are in the middle of the forth hundred of banks, i.e. we belong to the very happy medium which is the most critical to achieve stability and success in any business. Our bank is one of few companies not affiliated with government agencies that build their businesses based on market relations with customers and partners.

Today, the bank’s authorized capital is RUB 1 bln with PJSC Bank Saint-Petersburg and PJSC Kazan Helicopters being its key shareholders. Bank of Moscow, which held a controlling interest in our bank in the early 2000s, is also among our shareholders. However, due to additional share issues its interest has significantly reduced. Our bank continues to review proposals to attract corporate shareholders operating in real economy.

Our book assets total approximately RUB 4 to 5 bln. In 2011, we were assigned a «В++» credit rating which has been confirmed for the current year. Our bank holds a required set of banking licenses.

NBJ: How do you manage to stand up against giant banks?

N. DEVYATUIKH: Sound conservatism is a pre-requisite for the bank’s activities in any area. Successful banking is about finding a reasonable balance between profit and exposure. Between these two extremes, we always tend towards higher reliability in any financial transaction. A case in point is that we do not transact in the securities market after the crisis of 1998.

NBJ: What about the development of your branch network?

N. DEVYATUIKH: Given the fact that our bank is not a big one, we do not aim for wide expansion, offering customized services. For example, this was the case with the Orel region’s branch. We started cooperating with the region’s enterprises as early as in 2010 and entered the region very carefully – not from the opening of an office but from creating a cash operating unit. Only after an in-depth study of the activities carried out by regional companies and having assured ourselves that there were no risks for our depositors’ funds, we started boosting relations with the region’s farms in 2011. By the way, we helped to at least double turnovers of the agricultural companies that started cooperation with us and they managed to upgrade their harvesting fleets and expand their processing capacities and land assets.