27 May 2010 17:50
VTB Group announces the new strategy
The JSC VTB Bank Supervisory Council has approved VTB Group's business development strategy for 2010-2013. The new strategy aims at achieving effective growth. It envisages a substantial increase of income through an improved revenue structure and increased business efficiency. While previously the focus was on the aggressive growth of business and market share, the current priority is improved efficiency, increased returns on equity and growth the Group's market capitalization.
By the end of 2013, the key targets of VTB Group are as follows:
• more than doubling the income against the 2010 plan;
• at least 15% ROE across the Group and at least 20% for high-margin business lines;
• significant growth of market capitalization;
• a material improvement in the income structure; and
• higher resilience of the financial results.
The Group intends to further diversify its business and to build up its strongest lines, such as the corporate, investment and retail businesses, the CIS network and the share of high margin retail and investment businesses. The Group is set to boost its fee and commission income in the aggregate operating income, as well as improve its funding structure and reduce business concentration.
The new strategy sets specific goals for each business line.
The key corporate business targets are:
• to develop strong transaction banking capability and transform VTB Bank into the main settlement bank for its customers;
• to develop an integrated corporate-investment bank; to grow the share of large-scaled corporate business through cross-sales of IB products;
• to increase the number of active customers in lower segment of the large corporations and medium business;
• to create the best-in-class teams for the priority industries.
The primary objectives for the investment business are:
• to build a platform for sales of investment banking services to key customer segments within the VTB Group;
• to increase the revenues substrantially;
• to retain its ranking within the Top 3 Russian banks in terms of major products.
The key objectives for the retail business include a substantial growth in income through further dynamic development and increased business efficiency as well as enhancing market share and the retail business share in the Group's portfolio. In terms of retail business development the Group aims to:
• further develop its branch network and alternative channels;
• shift to a segment-oriented approach in serving customers;
• improve its IT platform and technologies;
• increase the quality of services;
• leverage VTB24 expertise and technologies to develop the retail business in the CIS.
The 2010-2013 development strategy for the VTB Group's financial subsidiaries aims at establishing efficient, diverse and profitable businesses as well as achieving and strengthening the company's positions in the respective segments through a wider product range, industry and customer diversification, development of regional network and other sales channels.
The priority for international development is placed on enhancing business in the markets where the Group is operating. The key region for the Group is the CIS where we aim at strengthening market position, boosting retail business and increasing the efficiency of the network and business processes. In Europe, Asia and Africa the Group continues to focus on serving customers from Russia and the CIS thus contributing to international cooperation and the CIS customers' expansion on the international markets. That enables VTB Group to offer a unique range of products on global financial markets.
An important task is to support the growing business by building a stronger infrastructure. We are planning to significantly increase operational capability by streamlining automated business processes and integrating advanced IT platform and technologies across the Group.
Our aim is to improve the Group management system to achieve greater synergy across business lines and benefit from our geographical reach outside the Russian Federation.
"Achieving these goals will enable the VTB Group to establish a business of a completely different scale and scope, which, in turn, will produce a positive impact on its market capitalization," said Ekaterina Petelina, Member of VTB Bank Management Board.