The FINANCIAL — Interest rates on loans and deposits will drop down by 1-1.5 percent in 2013, Valerian Gabunia, Chief Retail Banking Officer at VTB Georgia told The FINANCIAL.
The FINANCIAL — Interest rates on loans and deposits will drop down by 1-1.5 percent in 2013, Valerian Gabunia, Chief Retail Banking Officer at VTB Georgia told The FINANCIAL. “This is a very important change for the banks but sometimes such changes seem trivial to customers”, he believes.
VTB Georgia which was listed among the best banks in Georgia in terms of service quality in 2012, is going to broaden its small network. The bank is going to be maximally involved in agri-projects which are already supported by new Georgian Government.
“We are acting very aggressively in all markets. As a result we hold first place in growth out of VTB’s global group, (apart from Stat-up projects in newly entered countries)” said Valerian Gabunia, Chief Retail Banking Officer at VTB Georgia. “Our bank as well as the market is small compared to others. We can’t compete with them by size, but by quality and growth rates we do.”
“This problem is especially apparent in the regions. We currently have 22 branches in the whole country, a number which is not corresponding to our growth rate. We are going to add minimum 6 new branches in Georgia in 2013. VTB is annually investing in the growth of its chain,” he noted.
VTB Georgia experienced 51 percent growth in retail in 2012 while the whole market grew by 16 percent during the same period. In total the Bank issued up to GEL 250 million worth of loans in the retail & SME sector. At the same time the deposits form individual customers grew by 45 percent, which is almost twice more than the total market as it experienced growth of just 23 percent. The SME credit market increased by approximately 11 percent in 2012 and VTB’s corporate credit portfolio – by 26 percent.
“2012 was definitely successful but we will not be able to maintain a similar percentage of growth in 2013. Still we will grow twice more than the market. Generally speaking, the bigger the business is the smaller the growth. Brand awareness of VTB bank grew significantly last year and this will certainly have positive impact on 2013 results of VTB Bank.
Q. VTB Bank has changed its main focus and is now focusing more on the retail than corporate segment. Was it this that caused the large growth of the Bank?
A. VTB Georgia has been oriented on corporate business for a long time. We always had a retail segment, but it made up only 30 percent of total activities. About two years ago we changed our focus and made the Bank more universal. We then later turned more to the retail segment. Still we are maintaining strong positions in the corporate sphere, but this segment is somehow limited in Georgia. At present the retail segment makes up 55 percent and we are trying to increase it up to 60 by the end of 2013.
Q. You entered the Pos.Credit market at the end of 2012. What are the prospects of this sector for VTB?
A. We are very active in this market as the potential seems great. There are several large, established banks that have been operating in this direction for several years, but we are successfully competing with them. We have an innovative attitude toward this. Our officers are dressed less formally. They are working with tablets and don’t have desks in the branches. This makes their activity faster and more convenient and approachable for customers. The process of filling out a leasing application is simplified as well.
VTB has no analogue in terms of fast products like Pos. Credits and auto loans. We are the quickest and the most flexible so we strongly believe that clients appreciate that.
Q. What are the other innovative products that you offer?
A. We offered a unique credit card several weeks ago. This segment is essential for us as well. All banks are very active in this direction but we offer the best terms. The tariffs are lower compared to others and the interest rate is the lowest. We offer a credit card for just 30 percent of annual interest rate. The rate at other banks starts from 36 percent. Our calculations are very positive and we are more than managing to compete with the other big players.
We also plan to become more active in the consumer loans segment as this is the most popular product in the Georgian banking market.
Q. VTB focuses on SMEs as well. How do you attract businesses? What tools do you use that help in gaining success?
A. We recently ran the campaign – ‘Minus 3’. We offered businesses the opportunity to switch their loans to VTB for a minus 3 interest rate and better terms. The product was found to be in great demand as we gained about 200 new SME clients who all transferred from other banks.
Q. Whom do you consider to be your main competitors in the market? Microfinance organizations focus on small and medium loans as well. Does this influence your business?
A. We don’t feel any competition with microfinance organizations. They have higher interest rates than any bank and ask for bigger collateral. Still the segment is developing successfully. Microfinance organizations help businesses to start up, which then later could become the clients of us banks. In my opinion, this is quite a good practice.
As for the banks, Bank of Georgia and TBC Bank are our main competitors in terms of retail and corporate clients. ProCredit Bank is our main rival and donor for crediting SMEs. We, along with the other banks, are trying to win over their clients as it is the leading bank in this direction.
Q. Have the government changes influenced your business in any way?
A. They have not influenced VTB Bank at all. The retail sector continued its usual activities, both in the run-up to, and since, the election period. The SME segment tended to be a little bit passive during this period but they have since become very active in a short period of time. Even January was a very active period.
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