Bank "Orient Express" - one of the most recognizable brands in the Russian financial market. This financial institution offers one of the widest ranges of credit products.
The Bank specializes in consumer lending and cards, but at the moment it is actively developing other areas of activity, in particular, expanding its presence in the deposit market. What are the specifics of the organization's business model? How do the bank's employees and employees evaluate the performance of the bank?
General information about the bank
Vostochny Express Bank, reviews of which are found on a huge number of forums due to the popularity of this financial institution, was founded in 1991. Its first name sounded like “Dalvneshtorbank”. In 2006, the organization received the status of a joint stock company and re-branded the names - this is how the JSCB Vostochny Express Bank appeared on the Russian market. However, there is information that the economic company with this name was registered in 1991.
By the time they entered the market under a new brand, the credit and financial institution had already managed to get comfortable in the segment of consumer lending. Having appeared on the market, Vostochny Express Bank (reviews of many experts confirm this) was ready to offer customers a wide range of competitive products. The main profile of the institution, many financial analysts called the issuance of consumer loans and plastic cards.
According to some experts, Vostochny Express is now ranked third among Russian financial organizations in terms of its own network of branches. The Vostochny Express Bank, reviews of which are written by customers from many regions of Russia, owns more than 1,000 operating offices. According to many analysts, this is a decent indicator by Russian standards.
Despite the importance of customer evaluation, it is far from the only indicative criterion by which Vostochny Express Bank can be rated - reviews. An asset rating is also an important indicator of an institution’s performance. Now, according to a number of analysts, the organization is confidently entering the top 30 Russian businesses of its profile. The current loan portfolio of the bank, according to various estimates, is about 209 billion rubles. International rating agencies, for example, Moody’s, also do not stand aside from attempts to evaluate the Vostochny Express Bank (reviews by many experts, however, are characterized by a certain degree of distrust towards foreign analysts). According to Moody’s, the bank has a B1 rating.
Features of the activity
According to a number of analysts, Vostochny Express Bank (customer reviews include a very high appreciation of this fact) ranks 2nd in Russia in terms of the number of own offices after Sberbank. The bank's activity is characterized by quite frequent precedents of merger with other credit and financial organizations. So, for example, Vostochny Express Bank (reviews of the organization’s employees from among the top managers expressed in the media highly appreciate the relevant initiatives) in 2009 combined assets with Etalonbank, as well as with ZAO Dvizhenie Bank. In 2010, there was a merger of "Orient Express" and "KAMABANK". In the same year, the institution merged with Rospromstroybank. In 2010, the bank also acquired a 100% stake in City Mortgage Bank and Santander Consumer Bank.
As we have noted above, Orient Express specializes in consumer lending. At the same time, in the spectrum of the proposed loan solutions, the bank works with almost all types of loan products existing in the Russian market - car loans, mortgages, etc. The institution also works with deposits. Vostochny Express Bank (reviews on deposits that customers leave on thematic online portals confirm this) offers quite comfortable conditions for savings.
Facts from the story
Many experts note the fact that a regional bank - the head office of the institution is located in the Far East, in Blagoveshchensk - was able to become a powerful financial institution of the federal scale. Particularly impressive analysts called the results of the institution in 2006-2008, when the bank's assets grew several times. At the same time, Vostochny Express reached Moscow and St. Petersburg only in 2007. That is, the growth of the institution’s assets, as analysts say, has long been at the expense of regional markets. This circumstance, as many experts believe, allows us to conclude that “Bank Vostochny Express” (reviews of employees in St. Petersburg, who express, in particular, high qualification requirements for hiring, indirectly confirm this) came to the “capital” markets competitive and prepared to fight for customers. Some experts note the novelty of a number of credit products that the institution offered to the Russian market in the early years of its expansion under a new brand.
For example, the growth of clients in the Moscow market, analysts say, was largely due to the competitive offer of Vostochny Express in the car loan market — a program of loans whose target audience was women. The top managers of the bank, at the same time, admitted in an interview with the media that they had spotted this idea from the major cellular operators that offered tariff plans to the market, also targeted at the fair sex. The essence of the program was to offer women loans on more favorable terms, because the ladies are characterized, as the bank managers noted, by a more stable payment discipline. Through such an unusual initiative, Vostochny Express Bank (credit reviews under this program confirm this) was able to attract the attention of borrowers and snip off a significant share of the Moscow market.
Specificity of the business model
Consider some of the details of the business model of the institution. There is information that Vostochny Express Bank (feedback from employees working at the top management level confirms this) preferred to deploy a network of branches, not renting, but buying out the premises. This, according to many experts, was a factor in improving the financial stability of the bank, helping it withstand the consequences of the financial crisis of 2008–2009 and coping with the business difficulties that are relevant for the period of sanctions launched in 2014.
At the same time, as some analysts say, Vostochny Express approaches the corresponding costs for the acquisition of real estate sufficiently rationally, if possible acquiring, in particular, residential premises in order to later convert them into office space. It is much cheaper than buying a ready-made commercial object of the appropriate type.
Which banks can be considered direct competitors to the Orient Express? Opinions of analysts on this score are different. But in an interview with the media, the top managers of the institution note that Vostochny Express Bank (customer reviews with extensive lending experience indirectly confirm this) works according to a business model that is close to VTB24. And therefore, these credit and financial organizations can be considered closest competitors. At the same time, as some experts note, VTB24 Bank operates in the higher price segment of loans, and Vostochny operates at the bottom. At the same time, the top managers of the institution express plans for a higher niche.
Borrower's solvency assessment
Among the key aspects of the performance of any bank specializing in lending is the quality of the functioning of the system for assessing the solvency of the borrower - scoring. Vostochny Express Bank (credit reviews of which often include dissatisfied epithets that the application was denied) is evaluated by experts as an institution that has created one of the most effective models for conducting a corresponding study of the borrower's profile.
The specifics of the East Express scoring scheme are in the priority of automated algorithms. The main part of the credit decisions takes a computer program. Which, of course, is refined if necessary (mainly in order to better adapt scoring to the characteristics of regional markets). Another remarkable feature of the institution's scoring system is that it gives a low priority to the target, so popular in Russian banking, as the percentage of failures. In general, the Bank "Vostochny Express" (feedback from employees involved in interaction with computerized algorithms confirm this) is characterized by high adaptability of business processes.
Along with the automated scoring system, the role of lending specialists is also significant in the borrower’s rating system that the institution practices. The point is the specifics of labor contracts for employees of the corresponding profile with the bank. Credit expert remuneration depends on the quality of loan service. Bank Vostochny-Express (customer feedback on loans received at the bank confirm this) is an example of an institution in which automatic scoring can be combined with the subjectivity of the staff responsible for the relevant area of work.
Plans for further development
Bank executives in an interview with the media periodically reveal the essence of plans for the further development of the institution. The specificity of the modern banking market in the Russian Federation is that it is heavily credited. Therefore, it is not necessary to expect such a rapid growth of assets of credit and financial organizations. The situation, moreover, is complicated by the sanctions. Is Orient Express ready for testing?
Top managers of the institution and experts are cautious in their assessments. Of course, such a powerful financial institution like Vostochny Express Bank does not threaten to revoke a license - analysts believe that the indicators of sustainability and other criteria of the Central Bank are met, everything is in order in the institution. However, ambitions for further growth have not been expressed by bank management. The most important thing that Vostochny Express owners want to achieve in the near future is to reduce costs. The bank needs to optimize the business model for the current market realities - this is what top managers of a credit and financial organization express themselves in an interview with the media.
Due to what factors can Vostochny Express Bank increase its efficiency? Many analysts are impressed, in particular, by the fact that in this financial institution there is a pronounced centralization of many business processes. The institution's top managers cite as an example the procedure for calculating the salaries of bank employees within a staff of more than 5,500 people. In fact, a group of several specialists at the head office of a financial institution is responsible for the relevant part of business processes.
Another factor in increasing the efficiency of the Vostochny Express Bank, which is noted by experts and analysts, is cost reduction due to the transparency of domestic financial transactions. This allows, in particular, to have an unambiguous idea of the costs of maintaining units and offices.
Another factor in increasing the efficiency of a bank is the personnel motivation system. We have identified one of its key aspects above - the loan officer is interested in issuing a loan to a solvent client who inspires confidence not only in the aspect of good scoring assessment results, but also in personal psychological profile.
Bank in the deposit market
Consider the aspect that reflects the activities of the financial institution in the deposit market. Vostochny Express Bank (depositors' reviews confirm this) offers citizens quite competitive conditions for financial savings. Therefore, many Russians willingly trust their funds to the institution. At the same time, as some experts note, now on the deposit market an unpleasant trend is emerging for private banks (which include the “Eastern” trend). In connection with the crisis in the economy, many citizens prefer to place deposits in financial and credit institutions with the predominant share of state capital - in Sberbank, in “VTB24”. This circumstance, according to analysts, may complicate the activities of Vostochny Express, as well as other private banks, in the deposit market.
At the same time, as many financial experts note, state-owned banks do not yet feel real competition from structures in private hands. And so they are not in a hurry to raise interest rates on deposits (as well as lower interest on loans). In this regard, Vostochny Express Bank (feedback from depositors remaining loyal to the institution indicates that the conditions on deposits are generally competitive) have good chances, analysts say, to gain a foothold in the savings market.
Bank and macroeconomic situation
The crisis at the current stage of development of the Russian economy predetermines the emergence of a fairly wide range of macroeconomic trends. The above-mentioned desire of many citizens to entrust deposits to state banks is not the only manifestation of crisis phenomena that negatively affect the development prospects of private credit and financial organizations.
Among the most significant in terms of the impact on the Russian banking market factors from the macroeconomy area is the temporary blocking of access by banks and many other commercial firms from the Russian Federation to cheap foreign loans. Which played a significant role in relation to the capitalization of enterprises and financial institutions. The situation is complicated by the fact that many banks have already managed to issue significant amounts of loans in foreign markets, the repayment of which in the framework of the previous business models depended to a large extent on refinancing opportunities. Which also turned out to be inaccessible. This circumstance poses the most difficult tasks for banks to optimize the business model, and the Orient Express, as some experts believe, is no exception.
It is known, for example, that the European EBRD issued a loan in favor of OJSC Vostochny Express Bank several times. The reviews of market experts regarding this cooperation of the institution and the foreign financial institution were generally positive, since the EBRD issued “long” loans with maturities of 5-7 years - such conditions for the Russian Federation are considered rare. This kind of resources, as some experts believe, may be unavailable, due to sanctions, for many Russian financial institutions.
Reviews on the terms of lending and service
Having considered the aspects reflecting the peculiarities of the functioning of the banking model of the “Orient Express”, we will study what is the degree of consumer sentiment regarding the loan conditions offered by the bank.
In general, borrowers tend to rate the Orient Express as high. However, at the same time, consumers also note more democratic criteria for bank approval of loan applications. In addition, as many clients of the Orient Express think, for this credit and financial institution there is no peculiar high level of bureaucracy, which is traced by the example of many other banking organizations in Russia.
As for the service, here the marks are set, as well as in relation to, probably, any service providers, not only financial ones - on the basis of subjective perception. And therefore predictably differ. There are critical reviews, and there are also very positive ones.
We investigated the conditions under which loans are provided to OJSC Vostochny Express Bank, deposits, reviews. What are the prospects for further development of this financial organization?
There is information that in 2014, Orient Express showed unprofitable results of activity. There was a significant outflow of deposits from individuals and a reduction in capital owned by legal entities. At the same time, as some experts note, similar phenomena were also characteristic of other players on the Russian banking market. At the same time, in January 2015, in some institutions, in the Orient Express, including, a rather pronounced increase in deposits was recorded. Citizens attracted favorable interest on deposits, largely due to the policy of the Central Bank of the Russian Federation, which raised the key rate in December 2014.
Top managers of Vostochniy Express express a positive view on the current state of affairs in the institution. In particular, the management of the organization notes that the bank records a multiple excess of the standards for liquidity of the medium and short-term type, significant - for the long-term. In turn, indicators of sufficient capital are also at the optimal level.
The main competitive advantage of the Bank's management believes a strong infrastructure, which the organization had to build. Among the other significant advantages of brand recognition, large customer base, the experience of the staff that runs the most important from the point of view of stability of JSC CB "Orient Express Bank" job. Reviews of many of the specialist institutions testify to the effectiveness of the business model of the organization in terms of the impact of the crisis trends.
Focus on efficiency
In the coming years, the management of the bank, as we have already noted above, plans to improve performance by reducing costs. Among the other significant areas of the organization's activity is the optimization of its presence in the markets. Prospects for conducting work in various regions will be analyzed, and unprofitable offices will be closed. There is information that the emphasis in the development in the near future of Vostochny Express, to match the name, will be placed exactly on the presence from the Far Eastern region, which is promising in terms of raising capital through consumer activity of citizens and the activities of commercial enterprises. Top managers of Vostochny Express consider it possible to somewhat reduce activity in the regions that are located in the European part of the Russian Federation.
Much attention will be paid, as noted by top managers of the bank, to staff development. The fact is that the presence of professional, experienced professionals in any financial institution is the most important competitive advantage, especially in times of crisis. At the same time, as the Vostochny Express management notes, many of the financiers express their readiness to move from one city to another, if necessary, in order to actively participate in the development of the bank.