· Leading positions in the Samara Region. Gazbank is the leader among the banks of the Samara Region and is among the top-10 biggest banks in the Povolzhskiy Federal District, with total assets of RUB21.54 bn ($818.2 mn) and capital worth RUB2.32 bn ($88.1 mn) at the end of 2006. Gazbank occupies 93rd place in terms of capital and 79th place in terms of assets (survey by Expert, 1 January 2007) among all Russian banks.
· Growth of capital / asset ratio. In 2006 Gazbank grew its capital, increasing the low capital adequacy, which had been restraining further asset and loan book growth: as a result of an additional issue and drawing of two subordinated loans, at the end of 2006, the capital to assets ratio stood at 10.8%, while capital adequacy ratio stood at 14.1%, higher than CBR requirements (currently 11%). Although the increase in bank''s capital resulted in decrease of ROE from 40% in 2005 to 28.5% in 2006.
· B2 credit rating from Moody''s. In October 2005 Gazbank became the first bank in the Samara Region to be awarded an international long-term credit rating by Moody''s ratings agency: A long-term rating stands at B2 level and a short-term rating of financial strength is Å+, with a stable Outlook for both ratings.
· Transparency and experience in the bond market. Since 2002, Gazbank has been publishing financial reporting according to IFRS, audited by KPMG. From 2004, Gazbank has been a member of the mandatory retail deposit insurance system. The bank''s effective tax rate is close to 24%; the bank does not use any tax optimisation schemes. Since its ruble bond issue in 2005, Gazbank has complied with all necessary disclosure requirements for a Russian bond issuer.
· Stable and transparent ownership structure. The bank''s stable and transparent ownership structure substantially reduces the shareholders risk of Gazbank. Moreover, the bank receives both administrative and operational support from its shareholders. There are currently 7 individual owners of the business: V. Avetisian, A. Gridnev, O. Dyachenko, G. Zvyagin, P. Ivanov, A. Kislov, and A. Titov.
· Transformation form services for Gazprom-related entities to a universal bank. Gazbank started its operations in 1993 and originally developed as a niche bank orientated on providing services to Gazprom related companies: distribution and sale of gas, oil and gas extraction, pipe-line construction and transportation. Recently Gazbank''s strategy has been shifted to servicing retail customers.
· Low NPL resulting in high margins. The bank''s high net interest margin, low NPL (0.9% as of 2006), decreasing operating costs (in proportion to operating income) and high proportion of interest income explains solid and improving results of the bank''s operations. At the end of 2006, the ROE of the bank stood at 28.5% and the ROA at 3.1%.
· Loyalty of local customer base. Gazbank and local banks of the Povolzhskiy Federal District in general, are focusing on providing services to small and medium-sized businesses and private individuals. These types of customers are loyal to local banks and prefer to use the banking services of the regional credit institutions. Three quarters of Gazbank''s total assets consist of loans to retail and corporate clients, the basis of the total loan portfolio is made of loans to corporate clients with a 52.1% share.
· Branch network. Six of the bank''s seven branches and all its subsidiary offices are located in the Povolzhskiy Federal District, a region with a developed industry, infrastructure, and intensive trade flows. The high level of competition in the area is one of the main factors holding back rapid growth: the developed industry and infrastructure of the Povolzhskiy Federal District are responsible for high level of competition in the region and the high level of attention paid to the area by outside players.
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