ZENIT's client base increased by 23% in 2005
The growth of the Bank's client base in 2005 was 23%. Bank ZENIT opened accounts to about 1,700 new corporate clients representing construction, power, oil chemistry, metal, automobile and coal industries, wholesale and retail trade, and financial sector. Thus, the Bank continued to diversify its client base in 2005.
The total amount of funds credited to the corporate clients' settlement and current accounts in 2005 increased by 10.4% per cent relative to 2004. Balances in the corporate clients' settlement and current accounts as of 1 January 2006 exceeded RUR12 billion.
In 2005, Bank ZENIT made an emphasis on the establishment of a sustainable liability base as the principal source of funds for long-term investment and lending programmes and project financing for corporate clients. The Bank used deposits and debt instruments, including veksels, to mobilise the clients' funds for the medium and long term. As of 1 January 2006, balances of the corporate clients' mid- and long-term funds were in excess of RUR20 billion, i.e. up 46% compared to the beginning of the 2005 financial year. The amount included RUR8.2 billion as balances in the Bank's debt instruments. The Bank's counterparties were mostly represented by oil chemistry, automobile and construction industries, enterprises of the military and industrial complex, as well as financial sector entities (banks; insurance, investment and management companies; and nongovernmental pension funds).
A sustainable liability base enabled the Bank to conduct active transactions in support of the secondary market of its veksels through early redemption, loans collateralised by veksels, and REPO transactions. The amount of such operations increased 2.7 times over the year. The Bank's veksels remained a profitable and convenient means of payment for the supply of products and provision of services between counterparties. The clients bought payment veksels both for their own money and through veksel loans. The total amount of extended veksel loans was up 36% compared to 2004.
In 2005, the Bank, as a domicile bank of companies' veksels, took an active part in arranging veksel programmes for oil, automobile and food industries, and trade. The annual amount of accepted domiciled veksels was RUR2.4 billion, with the total amount of domiciled veksels of RUR3.8 billion, which is 4 times higher than the 2004 level.
In 2005, the Bank's major performance outcome relating to its debentures was increased veksel lending in regions and a broader geography of veksel circulation, as well as the establishment of a long-term liability base due to close cooperation of the Bank and its subsidiaries with the counterparties.
Pursuant to the approved Regional Network Development Concept, the Bank's regional network covered 13 regions as of the year end. There was a further significant growth of the subsidiaries' business: e.g., their total assets increased by more than 50% relative to 2004 and amounted to RUR14.9 billion.
The subsidiaries' loan portfolio increased by 73% to RUR10.4 billion and its share in the Bank's loan portfolio amounted to 30%.
In 2005, the subsidiaries obtained 936 new corporate clients, and their aggregate client base totalled about 3,000 clients as of the year end. The subsidiaries' profit in 2005 was up 70% from 2004. The list of transactions performed by the subsidiaries, including transactions with individuals, also increased. The amount of household deposits grew by 62%.
The first specialist regional retail additional office was opened in Rostov-on-Don.
The Bank's network in the Moscow region continued to grow. It opened 19 new operating offices in support of large corporate clients, including the Kuntsevo and Incom-Avto Car Dealerships; Grand and Maxlevell Trade Centres; and MIRAX Group Construction Company.
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