Chairman of the Board of Primorye Bank Andrei Zverev visited the open studio of Komsomolskaya Pravda at the Eastern Economic Forum, where he spoke about the development of the region, the state of the banking sector and life under sanctions.
“Tourists give the city new opportunities”
– Today, at the Eastern Economic Forum, Sberbank and Primorye Bank signed a memorandum of cooperation on bankruptcy, debt regulation and the sale of non-core assets of companies. What exactly are we talking about?
– These are interbank agreements that regulate intrabank activities. It is no secret that banks own certain assets, including problematic ones. When some of the borrowers do not pay or default (each of the banks has its own positions on these clients, collateral, etc.), in such situations, banks initiate legal proceedings to collect debts. Sometimes it is necessary to strengthen their position against the borrower. It is necessary to buy back someone’s debt. For this purpose, agreements are concluded so that debts can be bought or exchanged without any problems under certain conditions.
– The EEF is being held for the ninth time. Experts say that the forum allowed the Far Eastern and Siberian regions to take a new step in their development. How did this affect the socio-economic well-being of the Primorsky Territory?
– Of course, the region is developing. You see how the region in general and the city in particular are changing. How developed is the tourist flow now? This was facilitated, among other things, by the actions of the authorities, who directed efforts to attract tourists, which gives the city, the region and the budget new opportunities. In general, I think that our region is extremely promising. But what has been done now is not the limit; much more can be done. In my opinion, the main efforts should be focused on the development of infrastructure: from roads to ports and checkpoints at land crossings between China and Russia.
Companies switched to yuan loans
– Six months ago, the Central Bank of Russia raised the refinancing rate to 18%, which severely affected the cost of borrowing. How did this affect the banking system in the region?
– Of course, with such a cost of money, running a business is much more difficult. The demand for money has fallen. But since our region is heavily dependent on exports and imports, the monetary component often plays a key role, so many of our clients are reorienting themselves towards yuan loans. The yuan exchange rate at the beginning and middle of the year was quite acceptable, but now it remains… unpredictable. Recently, the overnight value of the yuan on the stock exchange has fluctuated between 30 and 80 percent per annum. These are one-day fluctuations, the situation should calm down. But the value of the yuan will in any case not return to its previous values: if at the beginning of the year it was 6-8 percent per annum, now it will no longer be like that – most likely it will stabilize at around 12 percent. -15%. This is for business.
Six months ago, the Russian Central Bank raised the refinancing rate to 18%.
Photo: Andrey MINAEV. Go to Photobank KP
It is clear that no one will lend to individuals in yuan on a large scale. Lending in rubles will decrease significantly. This is logical: the Bank of Russia has pursued this goal by raising the interest rate.
– In June, the United States and Great Britain announced sanctions against the Moscow Stock Exchange. How did this situation affect investors in Primorye?
– As far as I understand, no way. When sanctions against the Moscow Exchange were introduced, up to 95% of Russian banks were unable to conduct settlement transactions in dollars and euros. Yes, there were swap transactions on the exchange, transactions in which currency was bought or sold within the exchange itself, but without dollars leaving the exchange. Companies have opted for alternative payments in yuan. Therefore, the sanctions against the Moscow Exchange had a minimal impact on investors.
The future belongs to financial markets
– How does Primorye Bank feel in the current conditions?
– Frankly, it is a difficult time right now. Last year we were included in the SDN list of the American OFAC (Office of Foreign Assets Control, a division of the US Treasury Department dealing with financial intelligence, planning and implementation of economic and trade sanctions, “KP”). From the moment we were included in this list, foreign economic activity was closed to us. And one of the key points of the bank’s work was its competence in foreign economic activity: in the field of exchange rate fixing, urgent foreign exchange instruments… We were really strong in this. We probably had one of the largest correspondent networks in Asia. Therefore, we were a major player with great opportunities for the Asian market, because our corset was of high quality.
But it should be said that since this year China has also changed its policy. Now there is no division between authorized and unauthorized banks. In general, Chinese banks prefer not to operate with Russian money.
In addition, of course, an increase in the official interest rate for a Russian commercial bank, especially a regional one that does not have cheap budget funds, is also a serious blow, because funding must be obtained from the market. These are difficult times.
– What role do digital technologies play in the development of the bank?
– Key. I probably won’t give away the secret if I say that banks are moving from physical to telephone format. Now there are even financial markets. In general, we advise the bank that in the near future we should be present in the markets and not with a physical office in a particular city. Tinkov’s strategy: 10 years ago it seemed that one could work without offices in the field of the Internet – it already seems to be a reality. Financial markets will develop, they are the future. Our task, of course, is to get there.
More than half of foreign exchange turnover comes from China
– China is Primorye’s closest neighbour. Do residents of the region have the opportunity to exchange Russian currency for yuan?
– Of course. In our exchange offices, cash yuan is present in any volume, but, again, only due to the fact that Primorye Bank has historically specialized in foreign exchange transactions. We are quite competent in this area, although we feel comfortable in this regard in the Moscow market.
– How much has the volume changed?
– Until relatively recently, 90% of cash turnover was in dollars and euros, as these currencies were considered the main ones. Now the trend has changed. More than 50% of turnover is now in yuan. After the start of the SVO, the import of cash in currencies hostile to the country is not only limited, but practically impossible. Banks, in general, have nothing to sell. Russian tourists take the remaining dollars and euros abroad. But it is still possible to import yuan into Russia. And if the trend is not stopped at the political level, then the future belongs to the yuan.
On the other hand, the yuan has already become a global and freely convertible currency. We recommend to our clients: take the yuan and go to any country in the world, and there you can exchange it for the currency you need.
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