Russian Agricultural Bank carries on 130-year old tradition of the Peasant Land Bank

25 December 2012

Radio of Russia interviewed Dmitry Patrushev, Chairman of the Board and CEO of Russian Agricultural Bank on the Bank’s activity in 2012 and its plans and strategic prospects.

Dmitry Nikolaevich, would you please tell us about key events in 2012?

State Program on Agribusiness Development and Market Regulation for Agricultural Products, Raw Materials and Foodstuffs till 2020 was adopted in summer 2012. This document is a flagship for the agribusiness development for the next decade. Russian Agricultural Bank is specified as the core financial institution for the new Program implementation. The Bank was also the key Bank for the State Program 2008-2012 implementation. State scale objectives of agribusiness development set for the Bank and the approved State Program allowed us to define the core development targets through 2020. The approval of the Bank’s Strategy became one of the core events in 2012. In the framework of the Strategy elaboration we were obliged to incorporate the Bank’s unique character and its role in agribusiness development. On the one hand, the Bank is a market instrument for the State Program on Agribusiness Development implementation, on the other – a universal commercial institution of federal importance. We faced the task to elaborate Strategy that will provide for further effective development of the Bank maintaining the balance of interests of the government, clients and the Bank.

Signing of the agreement on strategic cooperation with the Ministry of Agriculture of Russia became a hallmark event of the year. I am sure that its implementation will contribute to the modernization of agribusiness infrastructure, resolving food security issues and improvement of living standards of the rural population.

What are the principal guidelines of the Bank’s development through 2020?

Serving agribusiness and related sectors, small and medium enterprises, rural population remains the key area of the Bank business. The share of agribusiness in the Bank’s loan portfolio will stay at minimum 70%.

According to the Strategy the Bank’s loan portfolio will reach RUB 3 trillion by 2020. At least RUB 2 trillion of this amount will be extended to agribusiness, fishery and forestry and rural population. Lending under the programs for rural areas and small and medium-size town development and improvement of living standards of the rural population is one of the core directions of the Bank operations. By 2020 the Bank plans to serve from 12 to 18 million retail clients.

The Bank will continue to extend its product range, adapting it to the clients’ needs, including ready-made solutions, project finance, investment lending, lending within the WTO green basket and lending adapted to the WTO yellow basket and some other.

I believe that under conditions of uncertainty of financial markets the new Strategy will provide the Bank with an opportunity to continue an ongoing effective implementation of the state objectives of agribusiness development.

The Bank’s plans to develop retail business receive active media coverage. What kind of products different from the peers can you offer?

We have 78 regional branches and over 1.5 thousand points of sale. With such an extensive branch network we are bound to develop retail business. All banks offer services to individual clients, however not all of them are ready to run business in small towns and rural areas and to serve rural population. We are ready for this, as the Bank was established with this purpose. We offer a wide range of services attractive to rural borrowers. Any man of any profession who moves to the rural area is willing to have an opportunity to take a loan, to build a house. He wants to have an opportunity to get a consumer loan.

Operations in the rural areas are traditionally considered as risky and complex. Do you feel any impact of the industry problems and risks this year?

It is obvious that to a large extent lending to rural areas depends on weather conditions. We faced consequences of the severe winter and dry summer this year when agribusiness producers suffered heavy losses. Nevertheless, even in such conditions, as experience shows, that peasants in difficult financial situation are more disciplined borrowers compared to urban population.

This year is the 130th anniversary of the Peasant Land Bank, the pioneer of the Russian agribusiness lending. What does this date mean for you?

This is another occasion to take stock of our results – financial resources allocated to the industry this year provided for an increase in crops and livestock production, renovation of technical base, setting up of new modern enterprises. Onwards, we have large-scale targets to increase efficiency and competitiveness of the domestic agribusiness, well-being and livingstandards of the peasants.

As we approach the holiday, I would like to wish our audience success and prosperity, endurance and patience on the way to the desired goals. Best holiday wishes!

We talked to Dmitry Patrushev, Chairman of the Board and CEO of Russian Agricultural Bank. Happy New Year!

Source: Radio of Russia