Under the conditions of intensifying competition, it is important for the banks to find their geographical niche or segment of the market, where due to the reasons of any kind there are noother lending entities. Evgeniy AKSENOV, the chairman of the board of the Asian-Pacific Bank told in his interview to NBJ about the locations of the growth points.

NBJ: Evgeniy Vladimirovich, for eight years the Asian-Pacific Bank's business has been growing by at least 50% per year. The bank's net profit according to Russian Accounting Standards has grown up by 52% for the year that elapsed. Which factors are conductive to such a rapid growth of the business turnovers?

E. AKSENOV: It is the result of strategy on expansion of the affiliate network that the bank has been implementing for many years. Besides, we are constantly improving the technologies, investing into the new software. On the one hand, it reduces the costs and augments the labour efficiency considerably, on the other hand, it improves the quality of the service to be provided, which in its turn causes an enhancement of the clientele base. We try to have improvements faster than our competitors in regard to the customer service, implementation and modification of products upon changes of the market conditions. Therefore it is natural that our young team is extremely desirous to outplay the market, to advance faster and with more quality. All the above in aggregate produces the result that we have.

NBJ: In 2012 the Asian-Pacific Bank significantly increased the loan portfolio: the amount of loans to individuals grew up by 61%, to legal entities - by 27%, alongside the overdue level remained very low. Please share your winning formula.

E. AKSENOV: We have developed a multi­layer system of credit issuance, thanks to which, despite the rapid growth of the portfolio the risk level is considerably lower than as a whole across the system. For retailing, it is a selection of clientele segments, pre-scoring, scoring, models on recovery of bad debts. While working with the small business we use the tools that make it possible for us to assess the acceptable risks in a quick and high quality manner. Accordingly, it ensures a low level of losses within the SME portfolio. We issue the loans within the range from RUR 30 mln to RUR 100 mln in the corporate segment. Affiliates are independent within the bounds of their limits, however there is always one risk employee from the head office, who is entitled for veto, in the affiliate's credit committee. Yet, none of the above will function until the system for continuous training of employees and monitoring of their personal portfolios is established, not only for the credit expert, but for the decision-makers so that if the default level reaches a certain parameter we will be able to make a prompt scrutinizing on the reasons and to take the relevant arrangements.

NBJ: According to the estimates of the Expert RA rating agency, you bank is one of the leaders in SME lending in the Far East and Siberia. Can you please tell us in more detail about the technologies of work in such uneasy segments?

E. AKSENOV: Small- and medium-sized enterprises are numerous, but the competition level for them among the banks is quite low as a majority of lending entities work either with the retailers or with the middle and large companies. When lending to SME, strange as it may seem, we still have to fight not the competing banks, but the "grey" market on issue of loans and negligence of enterprisers in the topic that they can get a credit in the bank, more­over as a small enterprise rather than as an individual.

Small-sized enterprises pay much attention to the speed of the application review, predictability of the lending institution, aid from the bank's specialists in preparation of the documents, ideally so that they would fill in everything them­selves, having visited the customer's location or office on-site. The price is the least important for them. If the bank could ensure the above conditions, its loan portfolio will be growing rapidly and in addition, provided that the right procedures of underwriting are complied with, will show the profitability subject to the losses equal or higher than the consumer crediting market's one.

NBJ: Your bank is successful at mortgage lending which is deemed as a domain of the large credit entities. By what means do you have a successful work with the mortgage?

E. AKSENOV: We have found the financing source for such type of business, having become one of the first banks that made the mortgage securitization deal. The deal amounting to RUR 1.5 billion was closed on December 31, 2012. This year we have already coped to negotiate the securitization for RUR 3.5 billion. If we speak about the mortgage sale, the major advantage is the wide affiliate network in the Far East and Siberia since the mortgaging terms are almost the same with various banks. According to the above parameter we are in the top three leaders in our region. APB's network will exceed 300 branches in the next months.

NBJ: The Asian-Pacific Bank is rewarded by EBRD as the most active regional bank in the area of commercial financing. What has helped you to deserve such an award?

E. AKSENOV: By several financial products, for example by mortgage, we find such funding sources that allow for retaining the rate at the lower level. In case of small business funding is provided by SME Bank, EBRD and IFC. Still there is question on how we can solve the problem of cheap liquidity for lending to corporate customers. At some point of time we have understood that our customers mainly are in need of equipment and machinery rather than of money. Such problem can be solved through granting a loan. And there is another way to solve it: structuring of the transaction through documentary operations. The cost difference is in the range of 5-6%, and the later alternative is even cheaper than the loans from the state-owned banks. Therefore we have resolved to develop the documentary operations further.

NBJ: What are the Asian-Pacific Bank's goals for 2013?

E. AKSENOV: The first task is to come through the innovations of the Bank of Russia with good quality. In 2013 we are going to raise two or three billions of rou­bles of additional capital. Also the Asian-Pacific Bank sets the objective to retain the growth rates, to preserve the return on equity at least of 30% and to enter the TOP-50 of the largest lending organizations of the country.