OREANDA-NEWS. July 13, 2009. The meeting participants discussed issues of cooperation of UNIASTRUM BANK and the St. Petersburg Administration to implement the program of lending to small businesses operating in the region. In compliance with the program, UNIASTRUM BANK and the Bank of Cyprus will provide, in the period from 2009 to 2011, an amount exceeding RUR 5 bln. to be lent to small and medium-sized businesses of St. Petersburg, reported the press-centre of UNIASTRUM BANK.

A special importance will be attached to cooperation with the regional SME Assistance Fund. The parties intend to sign and implement a joint program of lending to SMEs in the region aimed at expansion of lending volumes, reduction in interest rates, simplification of the loan disbursement procedure. Besides, the parties intend to introduce new products for SMEs (leasing, factoring, bank guarantees, etc.).

The meeting participants pointed out the necessity of developing and improving mechanisms of financing small and medium-sized businesses which will provide a better efficiency of utilization of borrowings for development of the city economy and a bigger mutual trust between the banks, borrowers and governmental bodies.

“At present the SME lending program has two difficulties, Chairman of the Board of Directors of UNIASTRUM BANK George Piskov observed. The first issue is the interest rate which has grown significantly as compared to the same period last year. How should the issue be handled? Today one of the measures offered by the government is the so-called partial subsidization of the interest rate provided under SME lending programs by the SME Assistance Fund.

The value of this subsidization depending on the lending conditions constitutes from one half to two thirds of the refinancing rate of the Central Bank. That is, if the refinancing rate is 11.5% p.a., this means the subsidy may constitute 6 to 8%. And 10% is more comfortable for small businesses. The second issue is security. It is a well-known fact that the biggest problem of small businesses is that many businesses, especially starter companies, have practically nothing to offer as security. In such cases the resources of the municipal SME assistance fund may be used – guarantees up to 50% of the total loan amount.

For example, the borrower needs a loan of RUR 5 mln., the fund is ready to give a guarantee for an amount of up to RUR 2.5 bln. The remaining portion of the collateral should be provided by the borrower. Again, this is a partial solution. But this is a functioning model and I think this experience may be used both in St. Petersburg and in other regions. These steps may help simplify, at least partially, the loan disbursement to small businesses in the present tense economic situation”.

“The long-term development strategy of UNIASTRUM BANK implies assistance to small businesses. This is a promising and fast-growing market”, George Piskov stated. According to him, “in conditions of the economic crisis, lending to small and medium-sized businesses is of a great importance, as SMEs are potential employers and bring high profits to the municipal treasury through tax deductions”.

UNIASTRUM BANK was founded in 1994. UNIASTRUM BANK is a universal bank making all types of banking transactions offered in the market of financial services and specializes in retail banking and SME banking. UNIASTRUM BANK is a member of the Bank of Cyprus Group. UNIASTRUM BANK is in the TOP-20 list of Russian Banks with the biggest distribution network, is ranked 61st in the amount of assets, 15th in the amount of retail deposits, 15th in the mortgage lending volumes and 14th among the most dynamically developing banks in 2003 to 2007 (according to ratings of the RosBusinessConsulting Agency).

According to financial reporting as of 01.01.2009, the net assets of UNIASTRUM BANK exceeded RUR 47 bln., net worth amounted to RUR 7,55 bln. Moody’s Investors Service upgraded the UNIASTRUM BANK long-term global scale rating to Вa2 and national scale rating to Aa2.ru. At present the Bank is operating over 220 outlets (including 42 branches) in 45 Russian regions.