Yuri Gusev: No more than 10% of restructured loans in Armenia become overdue again

ArmInfo. VTB Bank (Armenia) satisfies one in two applications of individuals for loan restructuring, Director General, Chairman of Directorate of VTB Bank (Armenia) Yuri Gusev said at today's press conference in Yerevan, when replying to ArmInfo's question.

Zadornov said that at present nearly 1.2 thsd out of the 2.5 thsd applications have been satisfied. No more than 10% of the restructured loans become overdue again, which he considers to be a good indicator demonstrating the Bank's correct strategy on customer service. In this context, Gusev pointed at the situation on the Russian market where the specified customer segment makes up 35%, which is quite an admissible indicator. 

Overall, the banker takes a positive view of the situation on the Armenian market of retail lending. "It is very important to us to maintain close ties with the customers so that when coming across payment problems the borrowers could apply to us and could be sure that the Bank would support them," he said.  However, he noted, it would be wrong to say that the major part of the overdue loans is restructured. "Part of the problems is settled by other instruments in the Bank," he said.

Gusev pointed out that VTB Bank (Armenia) will focus on further development of retail business. "The level of NPLs in the loan book of VTB Bank (Armenia) is now the same as in 2013 - 5% and this demonstrates that we can exert additional efforts here. The matter concerns not only development of lending, but also the need to use the best practices of the Russian market from the viewpoint of integrated customer service in terms of all products and services, including bankcards and acquiring," Gusev stressed.  When asked by ArmInfo about the structure of revenues from retail, Gusev replied that the level of interest income from retail business is quite high - about 90%, but the ratio will be changing: the structure will become more balanced and the share of non-interest income will be increased through technological development and new products. He said that the Bank's customer base consists of 300 thsd clients, 70% of which are loyal and low-risky. In the meantime, he thinks one of the key tasks of further activities is to recover the overdue loans.

According to the Financial Rating of Armenian Banks by the Agency of Rating Marketing Information (ArmInfo), VTB Bank (Armenia) is traditionally among the leaders of the Armenian banking system in terms of key parameters. As of 1 July 2016, the Bank's total capital amounted to 41.2 bln AMD (5th position), assets - 278.3 bln AMD (4th position), lending - 186.4 bln AMD (5th position), personal time deposits - 92 bln AMD (4th position), corporate call liabilities - 39.7 bln AMD (3rd position). The Bank holds the 5th position in terms of corporate lending - 107.4 bln AMD, and the 3rd position in terms of retail lending - 78.8 bln AMD. The share of NPLs (unrecoverable loans inclusive) in the total loan book of VTB Bank (Armenia) grew from 16.9% to 29.14% over year, while the share of NPLs in the consumer lending segment in the total loan book dropped from 3.5% to 3.1%. The Bank has the largest branch network (67 branches) in Armenia. VTB Bank (Armenia) joined VTB Group in April 2004. VTB Bank OJSC, the second largest bank in Russia, is the sole owner of VTB Bank (Armenia).