How VTB “knocks out” debts. Closed Joint Stock Company VTB Debt Center

The path of return.

According to Ernst & Young, IPO activity on global financial markets has virtually frozen. Deal volume between January and March fell 70% year-on-year to $14.3 billion. There is a way to increase investment attractiveness. To do this, it is necessary, first of all, to eliminate bad debts. One of the structures that knows exactly how to do this is VTB Debt Center, which has returned more than 60 billion rubles to the VTB group in three years.

THE CRISIS AS IT IS
There is a debt crisis in Europe. And the likelihood of its development is quite high. This was openly stated by former Russian Finance Minister Alexei Kudrin. "Large corporations in Europe and the world have calculated this scenario for themselves and are trying to be prepared for it, he noted. - We as a country, as a government, must also be prepared for such a scenario." Investors do not want to risk money and are reconsidering their investment policies. Emerging markets are becoming the key players. "The investment attractiveness of Russia can be increased by its accession to the WTO,- says Ian Art, vice-president of the Association of Regional Banks of Russia, editor-in-chief of the Bankir.Ru portal. - But in the end, everything will be decided by the rate of return on invested capital. For Russia, one of the fundamental issues here is the low competitiveness of jurisdictions. “Putin noted this problem in his program articles, but, unfortunately, the quality of jurisdictions does not immediately improve with instructions from above.”

Foreign investors say one of the most important criteria when choosing partners in Russia is the transparency of the work of large financial institutions and investment banks, as well as their ability to work with problem debts. A good example in this area is VTB. For the fourth year now, the bank's subsidiary, VTB Debt Center (DC), has been successfully solving the problems of corporate financing.

“Even before the crisis, there was an understanding that we needed such an instrument in the group,- says VTB Deputy Chairman, Chairman of the Board of Directors of VTB Debt Center Andrey Puchkov. - Borrowers were simply not ready for the crisis. Many withdrew funds from circulation, hoping that the market would always grow. But this did not happen."

Meanwhile, Russia is now experiencing noticeable growth dynamics in a variety of industries. "There are problems in companies, but not in industries,- the deputy chairman of VTB is convinced. “With ineffective management, even the most promising enterprises can fail.”

DEBT CENTER IS HURRY TO HELP
The salvation of companies in distress lies in competent anti-crisis management. The working circuits of the DC are based on the lightning rod principle. VTB takes control of the situation and tries to protect debtors from bankruptcy. "We do not transfer debts from the bank's balance sheet to our own balance sheet,- explains Andrey Puchkov. - The debt center acts as an agent of the credit organization. The Bank grants us all rights to act on its behalf in relation to a specific borrower in the framework of judicial and non-judicial procedures."

In other words, the DC’s task is to convince the debtor to pay. “Work with one or another non-core asset is structured in such a way as to help the client sell this asset and pay us with real money,”- adds the deputy head of VTB.

The most obvious example of the efficiency of the DC is its work on loans from the Bank of Moscow. "We can say that two banks operated under the same banner of the Bank of Moscow. One was, conditionally, retail, the second was the Department of Investment Assets,"- says Andrey Puchkov. - This department was mainly involved in lending to top management’s own projects, or issued loans under some non-standard schemes, offshore. Part of the loan portfolio consists of loans to industrial holdings. The total volume of the department's portfolio amounted to 366 billion rubles. By the beginning of April 2012, we managed to reduce it to 272.5 billion rubles."

When working with one-day companies or offshore companies, VTB DC enters into litigation, and when working with industrial holdings, the first thing the Debt Center does is change ineffective top management. Then evaluates production equipment and production processes to understand opportunities for optimization. Next - debt restructuring and, if necessary, additional capitalization of the enterprise.

Thus, for the period from June 2011 to April 2012, about 93.5 billion rubles of problem debt from the portfolio of the investment department of the Bank of Moscow were repaid.

MAXIMUM RETURN
The Debt Center, which deals with overdue debt, is separated into an independent legal entity in the VTB Group, so that it can become a counterparty for banks not only within the group. And this is a big advantage. “Mid-level banks, which are in the top division, but not among the top five, will come to the conclusion that it is better to outsource work with problem debts to companies such as VTB DC,”- Andrey Puchkov is convinced.
Returning to the assets of the Bank of Moscow, the bulk of the identified problem debtors are operating companies or so-called “special borrowers” ​​that do not carry out real economic activities and do not have property sufficient to repay the debt.

“For each case, we find out the reasons for the delay, the client’s potential for repaying the debt, we figure out why the borrower cannot repay the debt,- says the deputy chairman of VTB. - If it turns out that this happened as a result of the client’s unlawful actions, the borrower’s funds were withdrawn or there were other manipulations, we contact law enforcement agencies. In a normal situation, if the client’s difficulties are temporary, we give him the opportunity to regroup and fulfill his obligations.”

At the same time, VTB Group emphasizes that it is not interested in becoming a strategic investor in such assets. This is confirmed by the words of Andrei Puchkov: “Our task is to get out of these assets in the medium term and sell them on the market, to find an industry investor who will be interested in this. At the same time, the main task is to maximize returns.”

It happens that you cannot do without the help of law enforcement agencies. For example, it was found that the Investlesprom shares were manipulated in violation of criminal law. As a result, part of the holding's stake was arrested. “If we can’t get in touch with the client, we resort to the help of lawyers, go to the courts, and demand bankruptcy of the borrower. Clients who refuse to repay the debt for far-fetched reasons will always be faced with legal means of protecting our interests,- Andrei Puchkov assures. - Our situation is rarely hopeless. We are trying to bring it to its logical conclusion, find all the funds that were stolen and ensure their return."

The Bank of Moscow has already filed more than 260 claims in court for a total amount of more than 72 billion rubles.

TO BE OR TO BE?
How effective will DC be in the future? Will the bank need such a structure in the future? So far, VTB management is satisfied with the work of the Debt Center. “In three years, we have achieved a result that we are not ashamed to show. More than 60 billion rubles were returned to VTB Bank in cash. Thus, the idea of ​​​​creating an independent company for working with problem debts justified itself,”- says Andrey Puchkov.

Financial experts also have no doubt about the relevance of this project. “In my opinion, theoretically such an initiative by VTB can only be welcomed,- says Jan Art. - For two reasons. First, in banking, a prototype of a single center for working with debts is being created, which will unite the entire chain - legal work, business work with borrowers who are in arrears, conducting operations, debt restructuring, etc. This means that there is a chance that banks will perceive the debtor not only in the immediate situation (we need to get the debt out of him as soon as possible, period), but in some perspective (today - the debtor, tomorrow - the client). The second reason is that, other things being equal, I believe that from a social point of view, a bank debt center will be more careful in dealing with debtors than a third-party collection agency. The debt center, if its work is organized correctly, willy-nilly will think about the future relationship of the bank with clients. This means that we can expect that he will begin to work more thoughtfully, socially acceptable, with an eye on the bank’s reputation and taking into account the simple truth that at least a quarter of today’s debtors will again become profitable clients for the bank in the future.”

As for trends in world markets, they are not so clear. “The global crisis of 2008-2009 played the role of a sort of “forest orderly,”- says Jan Art. - The American economy is already demonstrating its cleansing effect, the European economy is on the way to this. I absolutely agree with those experts who believe that the world is facing a decade of fairly tough economic conditions. Overall, however, it offers the chance for a very healthy impact on global finance."