Constantine Weisman: “Brand” Renaissance Credit “should leave the financial market of Ukraine. We have the right to use it for 18 months from date of purchase. Our foundation – a natural growth, nevertheless possible point of purchase. The cornerstone of the merger are not put, but to deny such a possibility would have been stupid ».

Last year was FUIB, the bank that is a sector of the banking business of SCM Group businessman Rinat Akhmetov, the very rich. FUIB started to merge with the Donetsk “Donghorbank”, in the same year, a group purchasing and SCM bank “Renaissance Capital”, which should strengthen the retail sector groups.

On the question of why the banking business of SCM Group, these acquisitions, is it worth to wait for new purchases, the differences between the banking market in Russia and Ukraine, as well as on approaches to the work of the main shareholders – Rinat Akhmetov, said in an interview CEO of First Ukrainian International Bank (FUIB) Constantine Weissman.

you were appointed chairman of the board FUIB in the difficult period that you want from the CCM?

I went to the bank January 25, 2010. The main problem posed by the shareholders in front of me – it’s out of the bank a leader in the market and improved asset quality. The first half of 2010 was devoted to team building, as well as work on the strategy of the bank until 2015, which we completed in July. To work towards the restoration of credit, but at a much better basis than it was before the crisis. It is not about volume, but the quality and operational efficiency.

Who recruited a new team?

Today, the team FUIB – a group of qualified people who have more than a decade of experience in a bank, or in the structure of SCM, and new team members who have switched to us from other banks and international companies. Also, we have two board members who have joined us from the “Dongorbank” planned and others purposes. In the area of ??my attention are not only members of the board, but the heads of departments, and among them also a lot of new professionals.

Preparing for growth, we changed the structure of our corporate and retail businesses with the need to attract new people, and this work continues. Also created two new departments – the Department is managing strategic projects and processes (strategic projects and business processes of the bank) and the Department of Strategic Marketing.

What is the current share of income in total income SCM?

It would be better to talk about EBITDA of SCM and our profit before provisions and taxes. If so, then today is about 3%. Our challenge is to increase this share by 3-4 times up to 10% of the total income of over five years. This problem, which we discussed with the CCM.

Rinat Leonidovich is actively involved in the development of the bank?

Of course, the shareholder interest in the fate of the bank, he keeps abreast of, and sets targets. We discussed the development of the bank, and it was a dialogue, it was not: “That’s an order – do.” Something I’ve proposed, and with some initiatives, he agreed.

Certainly, Rinat Akhmetov leadership ambitions, therefore, have a business that is not the leader, in principle, for it is not very interesting. If the banking business will be efficient, but small – it is probably of little interest. If I were a shareholder, I would also like to have the leading companies in its portfolio.

you frequently communicate with him?

Yes, we communicate with him, but I can not say that this work is built. Corporate governance have been built in another way: we have a Supervisory Board consisting of representatives of the shareholder – JSC “SCM”. JSC “SCM” – a management company of the Group of SCM, which is different businesses, each business is responsible for the group level, we have it, Ilya Arkhipov, who is responsible for the banking business of SCM, and other members of the Supervisory Board FUIB. In turn, a CCM is the CEO.

No man with so many businesses can not directly deal with it all.

And this is the best practice, including over Russia, from which I came. If we talk about corporate governance practices, the SCM Group is close to the highest international standards. This does not preclude communication with the shareholder directly, but I would say that such direct communication is not at the forefront.

Will seriously reshape banking market? You expect massive mergers, acquisitions, entry of new major players?

My assessment is rather restrained, I believe that the consolidation process will go in terms of increasing the share of leaders in the organic growth of players. Today, their share of dispersed, even when compared with the Ukrainian system of Russia, where the share of major banks 5.10 significantly higher. Therefore it will be a process of consolidation, but I do not expect a wave of mergers and acquisitions.

As for new players?

The most serious group of players are probably the Russian banks, which exhibit a high level of interest in connection with the political picture in Ukraine after the presidential election is clearly increased interest.

A FUIB considering the absorption of large banks?

Our foundation – this is organic growth, yet may be some kind of point of purchase, that this growth is complete. Because if we do not know themselves how to grow internally, then no merger will not benefit us, not bring a new value for shareholders. Therefore, mergers are not put at the forefront, but we do not deny that the merger will be no more. We watch, scanning the market, this work is a constant. This does not mean that tomorrow will be a deal may be over time, and maybe it will not be at all. We should not depend on the fact that someone will buy.

How to plan to combine product line and FUIB « Renaissance » ?

Brand “Renaissance Credit” should disappear completely in the Ukraine, because this brand is owned by the Russian group “Renaissance”. We have the right to use it for 18 months from date of purchase. Accordingly, the bank “Renaissance” was purchased to supplement FUIB in servicing a wide audience of consumers in the segment of credit purchases of consumer goods, credit in shops, retail outlets. This mass market lending, unsecured loans only.

Retail portion FUIB – this entire line of products: and deposits and loans, checking accounts, Internet banking, all types of accounts, transfers and so on. If we are talking about loans, it is again unsecured loans, overdrafts, credit cards, auto loans is a mortgage – all classic products. What makes us different from each other – this is, above all, focus on different segments, because we (FUIB), we aim to serve middle and upper middle segment, while the “Renaissance” will be more focused on serving the mass segment. It might be different, and geography: we are currently preparing the final strategy will be different in the presence of different cities, even though both lines will be crossed.

What pace FUIB lending recovers?

Loans began to revive in the second half of 2010, especially with respect to the corporate segment, which was reflected in the growth of the loan portfolio. For retailers, we still observe a decrease portfolio, because two thirds of it – it’s the mortgage. Banks, having a big load of problems that arose as a result of the devaluation, the crisis and reduce the solvency of borrowers, have done work on the bugs, revised credit policy. We analyzed how to avoid interest rate risk and how to reduce currency risk, liquidity risk, credit risk, what are the requirements put forward to the borrowers, and so on. It takes time.

If we talk about the mortgage, when there will be packages available in this segment?

The market comes alive, and if we’re talking about a mortgage, then comes to life and property market, improving the status of borrowers. But prices continue to fall, and throughout the world. Market decline has slowed, but the recovery has not yet begun, so hurry on the part of banks is not here. We expect that the market will revive in the second half of this year. Those mortgage programs that are currently on the market, the mortgage in its pure form can not be named: the rate and number of market participants, and its volume. Therefore the output of banks in this market will be gradual. Rates of decline will also be gradual, due to several factors. First, we do not have foreign currency lending, and therefore cheap currency resources can not be adequately utilized and available to the public. If we take the hryvnia, the rates are still high enough in the market average of 14-16% per annum, but will certainly decline over time.

when you yourself are planning to offer a mortgage?

Right now the value of mortgages for customers, the first customers that will take it – it’s availability. So, when we go out, we think that the conditions for the borrower to have been quite interesting. Perhaps, our rates will be slightly below average. But miracles do not happen, so you can not expect the banks that they will operate at a loss, anyway, we will work with the margin. However, the lending rate will decline, I believe that affordable mortgages begins with 10-11% and below, we will come to this fairly quickly – a year and a half, maybe two years.

you think that foreign currency lending to do mass?

I speak as someone who came from Russia. When I see a lack of foreign currency loans in Ukraine, it seems strange to me. Here, everything is explainable, because the currency credit bears the currency risk. So on the one hand, I would like to liberalize foreign currency loans, on the other – I understand that, even for banks that carries some risk. There are several ways to solve this problem. First – absorption of foreign currency liquidity of banks and the ability to convert currency hryvnia through the central bank (NBU), providing long hryvnia National Bank. This mechanism is studied and as such can be started. The second method – a revival of foreign currency lending. If we are talking about corporate borrowers – are clients who either has a currency earnings, either financially stable, have good security in case of stress scenarios are able to service debt.

you consider reasonable requirement NBU to increase the minimum capital?

There should be some kind of extreme solutions. Of course, the banks need to increase capital, and National Bank of bar (120 mln.) Can be regarded as normal. Indeed, smaller banks may allow more risky operations, putting in jeopardy the entire banking system. There should be some general requirements for the organization of banks, the bank can not start with three cents.

It seems to me to raise the minimum amount of capital – it is not all that needs to be done. We have to think about how to facilitate the process of mergers / acquisitions. We need to develop Ukrainian financial institutions namely the Ukrainian capital, whether public or private, their share should be significant. The State and the regulator should monitor market landscape from this point of view. I think in this country may well be large financial institutions to work with the Ukrainian capital – both state and private. And I, introducing the second private bank in the country in terms of capital, I believe that the state should support banks with the Ukrainian capital, it can and immodest sounds.

true that banks are looking forward to the introduction of currency swaps?

Yes, it’s true. This is the mechanism which in principle is present in all countries and will enhance our ability to work with different currencies.

Recall: National Bank of Ukraine adopted the Resolution № 111, which allowed the Ukrainian banks not only to enter into swaps with each other and their customers, but also to enter into swaps with NBU, as well as enter into swaps between residents and nonresidents. According to analysts, innovation will broaden opportunities for currency speculation.

you are far from the policy? Your political preference?

Let’s just say I’m non-partisan. But you can not say that I apolitical, I care about what’s happening in the country. I am interested in the economic component of policy – from this point of view, yes, I’m interested. And this is reflected in a specific set of legislative proposals to the National Bank – liberalization, increasing the number of financial instruments, financial market development, protection of depositors and creditors. Position sufficiently proactive, but in my case it does not appear to belong to any of the parties.