Bank ZENIT Expanded Its Corporate Loan Portfolio by More Than 41% in 2004 Reaching $889 Million Equivalent by the Year End
Bank ZENIT expanded its corporate loan portfolio by more than 41% in 2004 reaching $889 million equivalent by the year end. The loan portfolio growth is related, first and foremost, to a successful implementation of the Bank's Regional Development Concept (the regional loan portfolio expanded by 79%) and to increased investment lending (the Bank's investment exceeded $324 million by the end of 2004).
The Bank also continued to establish a diversified customer base by extending loans to more than 140 new borrowers, the largest among them operating in the mechanical engineering, car, and food sectors. Taking into account the growing investment needs of the Russian economy, last year the Bank intensified its lending activity in the enterprise sector predominantly oriented to the domestic market. Resources provided by Bank ZENIT were used by Russian companies to develop new production capacities, diversify their production, and establish marketing networks.
In 2004, ZENIT launched 19 new investment projects. Altogether, it financed over 50 local companies operating in various sectors, including seven companies financed using western credits.
Last year, the Bank was vigorously introducing new leasing project finance technologies: it financed over 300 leasing deals under the auto leasing and small leasing project programmes taken alone. The level of leasing project funding reached $53.770 million.
The extension of working capital loans remained among the Bank's key priorities in the sphere of corporate customer funding. The aggregate amount of such loans increased by 30% compared to 2003.
Major users of the working capital loans included food, mechanical engineering (inter alia, military and technical cooperation), metal, petrochemical, and oil companies.
In 2004, Bank ZENIT was active in the trade finance and documentary transaction market. In particular, it transacted the first deal in the amount of $15.2 million to finance agricultural imports from the USA within the credit limit established by the US Commodity Credit Corporation for Bank ZENIT under the GSM-102 Program. It also transacted import financing deals using a credit limit of $10 million established by US Eximbank under the Export Credit Insurance Program for short-term sales.
In 2004, credit line limits established by foreign financial institutions for Bank ZENIT increased by more than $100 million, which reconfirmed the fact that the Bank enjoys a high level of confidence in the international market. Compared to 2003, the Bank's deals to finance the customers' export/import transactions using documentary instruments (guarantees and LOCs) and targeted fund-raising within credit limits established by foreign banks in 2004 increased by 74%.
In addition, the Bank's limit for guarantees to be issued in favour of customs authorities in 2004 was EUR40 million, which made it possible to increase the amount of customs guarantees issued by the Bank in 2004 by 28%.
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