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Corporate Banking

The Bank’s corporate banking activities include lending, deposit taking, trade finance and project financing, settlement operations, corporate bank cards and foreign currency exchange. Corporate business takes the largest share in BTA Bank’s activity. It brings the maximum profit and allows financing the development of our branch network, keeping the profitability on an acceptable level. 

Corporate portfolio is the biggest part of our credit risk, however its share will continue to decrease in the future in favor of retail according to our business plan. Today it takes about 70% of the total assets.

Our credit services meet the highest requirements of corporate borrowers. 

We are seeking to serve independent companies from growing economic sectors. Majority of our clients have been working with us for more then two years. The rapid growth of our credit portfolio during the last year is due first of all to the growing demand from the market and our ability to attract considerable financial resources from the local and international markets.

All our products are standard from the technology perspective, which makes it easier to sell them through the branch network increasing the values and client base. 

The Bank’s corporate client base includes companies in the trading, investment, publishing, construction, services, food, finance and real estate sectors. The Bank seeks a diversified client base and aims to limit its exposure to only one industry sector. 

Lending

Corporate lending is the Bank’s principal business activity. As of December 31, 2006, total loans to corporate customers (net of allowance for impairment losses) amounted to RUB 12.8 billion, representing 79% of the Bank’s total loans to customers, as compared to RUB 7.7 billion, or 91.7% of the Bank’s total loans to customers, as of December 31, 2005. The Bank offers a wide range of corporate loans in rubles and foreign currency, including short-term loans for working capital purposes, medium-term loans for purchasing stock, raw materials and vehicles and project finance (long-term loans to finance investment projects). The Bank seeks to develop long-term relationships with corporate borrowers and offers a range of credit lines with fixed limits on different types of financing for developing their businesses. 

Customer Deposits

The Bank offers promissory notes (both interest bearing and discounted), term deposits, deposit certificates and minimum-deposit (limited withdrawal) bank accounts to its corporate banking clients. Interest rates are updated regularly. As of December 31, 2006, the Bank had a total of RUB 8.7 billion in customer accounts from corporate banking clients, representing 83.4% of the Bank’s total customer accounts. 

Trade Finance

BTA Bank actively develops its finance of customers’ trade transactions by offering a wide range of trade finance instruments including letters of credit and guarantees. The volume of trade finance and documentary operations portfolio grew by more than twice in 2006. BTA Bank reported multiple increase of the volume of ruble nominated letters of credit, which were issued within the framework of real-estate purchase and sale transactions. BTA Bank is an established counterpart for banks in the international market, which is demonstrated by a 52% increase in direct trade finance credit lines opened by foreign banks for BTA Bank in 2006. These lines amounted to US$ 217 million as of December 31, 2006. The Bank has also expanded its cooperation with banks in South-East Asia (mainly China), India and number of Western European countries. 

Main foreign partners in the field of trade finance and documentary operations include, among others, BTA Bank (Kazakhstan), the Bank of New York, CommerzBank AG, Raiffeisen Zentralbank Osterreich AG, ABN AMRO, JPMorgan Chase, UBS AG, Credit Suisse, Landesbank Berlin AG, Monte Dei Paschi Di Siena, Intesa Sanpaolo SpA, Banca Popolare di Vicenza, SwedBank, Nordea Bank, Sampo Bank plc, OKO Bank, Hungarian Export- Import Bank PTE Ltd, Natixis, BRED Banque Populaire, BCP, ICICI Bank Ltd, Nova Ljubljanska Banka, Zurcher Kantonalbank, Russische Kommerzial Bank AG, VTB Bank (France) SA, VTB Bank (Europe) PLC, VTB Bank (Austria) AG and many others. 

BTA Bank also cooperates with the following export credit agencies: Euler Hermes, SACE, Atradius, CESCE, MEHIB, COFACE, KUKE, Export-Import Bank of the United States, SINOSURE, EDC and others. 

Wide range of credit instruments:

• Letters of Credit (mainly with further post-financing)
• Guarantees
• Standby Letters of Credit
• Bilateral trade related loan agreements
• Trade related promissory notes
• ECA covered transactions

Settlement Operations

The Bank offers ruble and foreign currency settlement operations to its customers through the CBR’s clearing system, its own branch network and network of correspondent banks and provides specially designed systems that enable its major customers to identify the sources of fund transfers. The Bank holds NOSTRO accounts with the following International Financial Institutions: BTA Bank (Kazakhstan), UBS AG, JPMorgan Chase Bank (NA), The Bank of New York, Commerzbank AG and VTB Bank (Deutschland). It also offers a cash delivery service.

Foreighn Exchange

The Bank buys foreign currency from and sells it to its corporate banking clients, including effecting of mandatory purchase of Russian exporters’ foreign currency proceeds. BTA Bank (Kazakhstan) is the Bank’s principal counterparty for conversions between rubles and Kazakh tenge.

Securities Trading

The Bank trades corporate and government securities for its own account on major stock exchanges and the over-the-counter market. The Bank also carries out a range of money market operations, including customer related and arbitrage operations. The Bank is an active participant in the Russian interbank market and provides a range of banking services to other banks, including correspondent accounts, ruble and foreign currency transfers, foreign exchange transactions, investment of available funds, documentary operations and cash collection services. As of December 31, 2006, the Bank’s securities at fair value through profit or loss amounted to RUB 2.317 billion, as compared to RUB 1.6 billion and RUB 1.2 billion as of December 31, 2005 and 2004, respectively. The Bank’s securities at fair value through profit or loss consist of liquid promissory notes of major Russian banks, bonds issued by major Russian banks, municipal bonds and corporate bonds issued by leading Russian enterprises.

Other Corporate Banking Services

The Bank also provides brokerage, depositary and insurance services to its corporate banking clients. The Bank provides insurance services through its subsidiary LLC ATTA-Insurance Insurance Company, which principally provides property insurance to the Bank’s customers.