Vostochny Express Bank is one of the most recognizable brands on the Russian financial market. This credit and financial institution offers one of the widest spectrum of credit products.
The bank specializes in consumer loans and cards, but at the moment actively develops other areas of activity - in particular, it expands its presence in the deposit market. What is the specificity of the business model of the organization? How do customers and employees evaluate the effectiveness of the bank?
General information about the bank
Bank Vostochny Express, whose responses 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 "Dalvneshtorgbank". In 2006, the company received the status of OJSC and rebranded the name - so on the Russian market appeared JSC CB "East Express Bank". At the same time, there is information that the economic company with this name was registered back in 1991.
By the time of entering the market under a new brand, the credit and financial institution has already mastered the segment of consumer lending. Appearing on the market, Vostochny Express Bank (many experts confirm this) was ready to offer its customers a wide range of competitive products. The main profile of the institution's activities, many financial analysts call issuing consumer loans and plastic cards.
Now, according to some experts, "Oriental Express" is the third largest Russian financial institution in terms of the size of its own network of branches. Bank "Orient Express", reviews of which customers from many regions of Russia write, owns more than 1 thousand operational offices. According to many analysts, this is a decent figure by Russian standards.
Despite the importance of evaluation by clients, it is by no means the only indicative criterion by which the East Express Bank can be assessed - reviews. The rating by assets is also an important indicator of the effectiveness of the institution. Now, according to a number of analysts, the organization is confidently included in the top 30 Russian businesses of its profile. The current portfolio of bank loans is, according to various estimates, about 209 billion rubles. International rating agencies, for example, Moody's, also do not stand aside from attempts to evaluate the bank "Orient Express" (reviews of many experts, however, are characterized by a certain degree of distrust towards foreign analysts). According to Moody's, the bank has a rating of B1.
Features of the activity
According to estimates of a number of analysts, "Orient Express Bank" (customer reviews include a very high rating of this fact) ranks second in Russia in terms of the number of its own offices after Sberbank. The bank's activities are characterized by frequent precedents of merging with other credit and financial institutions. For example, the "Orient Express Bank" (feedback from staff of the organization of top managers, expressed in the media appreciate the relevant initiatives) assets combined with the "Etalonbank" in 2009, and with ZAO KB "Movement". In 2010, the East Express and KAMABANK merged. In the same year, the institution merged with Rospromstroybank. In 2010, the bank also acquired a 100% interest in the City Mortgage Bank and Santander Consumer Bank.
As we have already noted, "Orient Express" specializes in consumer lending. However, in the range of proposed solutions for loans, the bank works with virtually all types of credit products that exist on the Russian market - car loans, mortgages, etc. Also, the institution works with deposits. Bank Vostochny Express (reviews on deposits that clients leave on thematic online portals, confirm this) offers quite comfortable conditions for savings.
Facts from history
Many experts note the fact that the regional bank - the head office of the institution is located in the Far East, in Blagoveshchensk - was able to become a powerful financial organization of federal scale. Particularly impressive analysts call the results of the institution in 2006-2008, when the bank's assets grew several times. At the same time, to Moscow and St. Petersburg, "Orient Express" reached only in 2007. That is, the growth of the institution's assets, as analysts say, for a long time was due to regional markets. This fact, according to many experts, leads to the conclusion that "the Bank of the Orient Express" (feedback from staff in St. Petersburg, which are expressed, in particular, the high qualification requirements for employment, indirectly confirm it) came to the "capital" markets competitive and prepared for the struggle for customers. Some experts note the novelty of a number of credit products that the institution offered the Russian market in the first years of its expansion under a new brand.
For example, analysts say that the growth of clients in the Moscow market was largely due to the competitive offer of the "Orient Express" in the car loan market - a loan program targeted by women. Top managers of the bank, at the same time, admitted in an interview with the media that they watched this idea from the large mobile operators offering tariff plans to the market, also targeting the fair sex. The essence of the program was to offer loans to women on more favorable terms, as the ladies are characterized, as noted by the bank's leaders, 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 grab a large share of the Moscow market.
Specificity of the business model
Consider some details of the business model of the institution. There is information that "Orient Express Bank" (reviews of employees working at the level of senior management, confirm this) chose to deploy the network of offices, not renting, and buying out the premises. This, according to many experts, has become a factor in improving the financial stability of the bank, could help it to withstand the consequences of the financial crisis of 2008-2009 and cope with the complexities of business that are relevant for the period of sanctions initiated in 2014.
At the same time, as some analysts point out, "Orient Express" approaches the appropriate costs for the acquisition of real estate sufficiently rationally, if possible acquiring, in particular, accommodation, in order to subsequently convert them into office. It is much cheaper than buying a ready-made commercial facility of the appropriate type.
Which banks can be considered direct competitors to the Orient Express? The opinions of analysts on this subject are different. But in an interview with the media, senior executives of the institution note that "Orient Express Bank" (customer reviews with extensive credit experience indirectly confirm this) is working on a business model that is close to VTB24. And therefore, these credit and financial organizations can be considered the closest competitors. At the same time, as some experts note, VTB24 operates in a higher price segment of loans, and Vostochny in the lower price segment. At the same time, the top managers of the institution express their plans to come to a higher niche.
Assessment of the borrower's solvency
Among the key aspects of the performance of any bank specializing in lending is the quality of the performance of the borrower's solvency scoring system. Vostochny Express Bank (whose credit reviews often include dissatisfied epithets that the application was denied) is assessed by experts as an institution that has created one of the most effective models for conducting a relevant survey of the borrower's profile.
The specificity of the scoring scheme of the "Orient Express" is in the priority of the automated algorithms. The main part of credit decisions is taken by a computer program. Which, of course, if necessary, is being finalized (mainly to better adapt the scoring to the peculiarities of the regional markets). Another notable feature of the scoring system of the institution is that it gives a low priority to the so popular in the Russian banking target, as a percentage of refusals. In general, the Bank "Orient Express" (reviews of employees involved in interaction with computerized algorithms confirm this) is characterized by high technology of business processes.
Along with the automated system of scoring, in the system of assessing the borrower, which is practiced by the institution, the role of credit specialists is also significant. The case in the specifics of labor contracts of employees of the appropriate profile with the bank. The remuneration of a credit expert depends on the quality of loan servicing. Bank Vostochny-Express (customer feedback on loans received from 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 direction of work.
Plans for further development
Heads of the bank in an interview with the media periodically disclose 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, in addition, is complicated by sanctions. Is the Orient Express ready for testing?
Top-managers of the institution and experts are cautious in assessments. Of course, such a powerful financial institution as "Orient Express Bank" does not threaten to revoke the license - with stability indicators and other criteria of the Central Bank, analysts believe, everything is in order in the institution. However, ambitions for further growth in the bank's management are not expressed. The most important thing that the owners of Orient Express want to achieve in the near future are cuts in costs. The bank needs to optimize the business model for the current market realities - the top managers of the credit and financial organization themselves say this in a media interview.
Due to what factors can the bank "East Express" improve 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. Top-managers of the institution give an example of the procedure for calculating the salary of employees of the bank within the state, exceeding 5,500 people. In fact, a group of several specialists in the head office of a credit and financial organization is responsible for the corresponding part of business processes.
Another factor of increasing the efficiency of the Vostochny Express Bank, which is noted by experts and analysts, is the reduction of costs 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 improving the efficiency of the bank is a system of motivating staff. One of its key aspects was identified above - the loan inspector is interested in issuing a loan to a solvent client, which causes confidence not only in terms of good scoring results, but also in the personal psychological profile.
Bank in the deposit market
Consider an aspect reflecting the activities of the financial institution in question in the deposit market. "Orient Express Bank" (reviews of investors 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 the situation on the deposit market is unpleasant for private banks (which include the "Oriental") trend. In connection with the crisis phenomena in the economy, many citizens prefer to place deposits in a financial and credit organization with a predominant share of state capital - in Sberbank, in "VTB24". This circumstance, according to analysts, can complicate the activities of the "Oriental Express", as well as other private banks, in the deposit market.
At the same time, as many financial experts note, state banks do not yet feel real competition from the structures that are in private hands. That is why they are not in a hurry to raise interest rates on deposits (as well as to reduce interest on loans). In this regard, "Orient Express Bank" (reviews of investors who remain loyal to the institution, indicate that the conditions for deposits in general are competitive) has a good chance, according to analysts, to gain a foothold in the savings market.
Bank and macroeconomic situation
Crisis phenomena at the current stage of development of the Russian economy predetermine the emergence of a sufficiently wide range of macroeconomic trends. The desire of many citizens to trust deposits to state banks, noted above, is not the only manifestation of crisis phenomena that negatively influence the prospects for development of private credit and financial organizations.
Among the factors most significant in terms of influencing the Russian banking market from the field of macroeconomics are the temporary blocking of access from 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 largely on the refinancing opportunities. Which also was not available. This circumstance confronts the banks with the most difficult tasks to optimize the business model, and the Eastern Express, as some experts believe, is no exception.
It is known, for example, that the European EBRD issued a loan several times in favor of OJSC CB "Vostochny Express Bank". Comments of market experts regarding this cooperation between the institution and the foreign financial institution were generally positive, as the EBRD issued "long" loans with maturities of 5-7 years - such conditions are considered rare for the Russian Federation. Such resources, as some experts believe, may be inaccessible, due to sanctions, for many Russian financial institutions.
Reviews about the conditions of crediting and service
Having considered the aspects reflecting the features of the functioning of the banking model of the "Orient Express", we will study what the degree of consumer sentiment is regarding the terms of lending offered by the bank.
In general, borrowers tend to assess the interest rates of the "Orient Express" as high. However, at the same time, consumers also note more democratic criteria for the approval of the bank loan applications. In addition, according to many clients of the Orient Express, for this credit and financial institution is not characterized by a high level of bureaucracy, which can be traced on the example of many other banking organizations in Russia.
As for the service, here the valuations are exhibited, as in the case of, probably, any service providers, not just financial ones - on the basis of subjective perception. And therefore predictably different. There are critical reviews, and there are also very positive ones.
Prospects of the bank
We investigated the terms and conditions under which loans are provided by OJSC CB Orient Express Bank, deposits, reviews. What are the prospects for the future development of this financial institution?
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 the capital held by legal entities. At the same time, as some experts note, similar phenomena were also characteristic of other players in the Russian banking market. At the same time, in January 2015, in some institutions, in the "Orient Express", among others, a significant increase in deposits was recorded. Citizens attracted favorable interest on deposits, largely due to the policy of the CBR, which raised the key rate in December 2014.
Top-managers of the "Orient Express" speak about the current state of affairs in the institution in a positive way. In particular, the management of the organization notes that the bank fixes a multiple excess of the norms for liquidity of the medium-term and short-term type, significant - for the long-term. In turn, the indicators of sufficient capital are also at an 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.
Emphasis on improving efficiency
In the coming years, the management of the bank, as we have already noted above, plans to increase the effectiveness of the work by reducing costs. Among other significant areas of the organization's activity is the optimization of the presence in the markets. We will analyze the prospects for doing business in certain regions, close unprofitable offices. There is evidence that the focus on development in the near future, "Orient Express", under the name, will be placed just in front of the Far Eastern region, which is promising in terms of attracting capital at the expense of consumer activity of citizens, the activities of commercial enterprises. Top-managers of the "Orient Express" consider it possible to somewhat reduce the activity in the regions that are located in the European part of Russia.
Much attention will be paid, as noted by top managers of the bank, to the improvement of professional skills of the staff. The fact is that the presence of professional, experienced specialists in any financial institution is an important competitive advantage, especially in times of crisis. At the same time, as the leadership of the "Orient Express" notes, many of the financiers express their readiness to move from one city to another in order to actively participate in the development of the bank.