Q309 saw a 35% increase in the portfolio of loans issued by Uniastrum Bank to small businesses

Loans issued by Uniastrum Bank to small businesses in 3Q2009 amounted to Rb 1.5 bn

After 9 months of 2009 the SME loan book of Uniastrum Bank totaled Rb 3.4 bn. The third quarter of 2009 was the main growth period. Only in September the Bank issued to small businesses about Rb 700 mn. The growth of the loan portfolio of this category was brought about by the substantial increase in loans granted in the regions. The regional SME loan portfolio of Uniastrum Bank constitutes 82% of the total loan book. The industrial structure of the portfolio remains unchanged. The dominating portion is loans granted to businesses engaged in wholesale and retail trade, service industry, production of vehicles, equipment, timber, foods.

The year 2009 turned out to be very difficult for the enterprises of the real sector of economy including small businesses, the experts of Uniastrum Bank observe. But the third quarter saw a stable upward trend in demand for Uniastrum loans by small businesses. To increase the demand for loans, Uniastrum Bank is taking active steps to expand cooperation with the regional SME assistance funds with regard to interest rate subsidies and provision of guarantees by such funds in case such businesses need extra collateral to get loans.

At the beginning of 2009 Uniastrum Bank launched a new line of products for small businesses considering their industrial peculiarities. Such businesses included neighborhood retailers, manufacturers of semi-finished products, producers and sellers of medical equipment, etc. The U-PRIME loan offer in the framework of which the borrowers could get amounts from Rb 5 to 20 mn for a term of up to 10 years aroused intense interest among small businesses. The key distinctive feature of the program is its “recession-fighting” price of 17.7%. Considering the fact that loan repayments are calculated on the annuity basis (equal monthly installments), the actual cost of the loan will be 10.7%, and with all the fees it will be 13.4%. Thus, for example, a client will pay Rb 134,000 for a loan of Rb 1,000,000.

According to information supplied by RosBusinessConsulting, Uniastrum Bank is ranked one of the leaders among the Russian banks in loan amounts granted to SMEs in H109. During the first nine months of 2009 the total corporate loan book of Uniastrum grew by 31% to reach Rb 28.6 bn, out of which Rb 10.2 bn were issued to small businesses.

On November 19, 2008 President of Russia Dmitry Medvedev and President of the Republic of Cyprus Dimitris Christofias signed the memorandum on cooperation between UNIASTRUM BANK and the Bank of Cyprus Group which provides for roll-out of a joint program of lending to SMEs in the Russian territory to the total amount of RUR 15 bn planned for three years (2009-2011).

“Provision of funding to small and mid-sized businesses is one of the Bank’s priorities, says President of Uniastrum Bank Gagik Zakaryan. We have already started to implement regional SME lending programs and are planning to gain support of the local administrations. Such support will boost overall development of small businesses in the regions and make loans more accessible and affordable to them”.