Interview with Michel Perhirin
Russia Today: MDM-bank is one of the largest of the privately owned banks operating in Russia measured by both assets and capital. Where do you see the expansion for the bank coming from?
Michel Perhirin: This is the main challenge. Obviously we have got many large clients but we have even many more medium-size clients. In fact we have 12,000 corporate clients together with a lot of retail clients. The big challenge in Russia is to manage the growth of the organisation. The banking system has grown tremendously quickly over the last six years. Maintaining a growth of 40% in terms of assets is a real challenge. We have found the main solution to ensure that we will continue to grow and remain among the top 15 (we are 11th today) banking institutions in Russia. We have to spread a bit our product and to spread a bit our base. In terms of products we have been relying very much on large corporations and investment banking. We were famous for that and based our growth in the past on these two activities. Obviously, it will not be sufficient in the future with competition coming. We feel a big gap in the corporate segment of medium-size and small enterprises. We are going to be very active there. We are Russian, we know Russian companies very well, we know how to deal with them. This business can offer some sort of profitability. We have been short as well of activity in retail. We are going to pay attention to our network as well as the product base. We plan to re-fit our network to make in attractive, comfortable for the client. In terms of product we know that our clients are aware of the best and they go to the place where it is best. We are going to take this challenge and we have no reason not to be competitive. We want to expand in the regions as well. The regions have been a bit forgotten because it was easier to do business in the centre. All the regional corporations are represented in Moscow but to avoid their locations will be a mistake. We already have a network of 32 branches and plan to adjust it to the needs of the clients. We feel that 50% of our revenue and profit will come from the regions in the next five years.
RT: How do you find the conditions and concerns about transparency within the banking world in Russia? What concerns are there from foreign banks hoping to open branches here?
M.P.: I was much more concerned ten years ago. It was really difficult to think of working in aRussian bank. It was so different from what we are calling a bank in the Western world. Today the difference is quite little. We are talking about trust today. We have the people, the commodities and the possibility to grow. Trust is a problem today and that is being addressed at the forum. It was difficult for me to move from a Western style bank to a Russian bank. I moved after checking I would be fine and would not have to compromise on anything. What I found was a bank which was already on the way to the transformation to become trustworthy. I was right to join this bank. We are paying a lot of attention to corporate governance. I have joined probably the most advanced bank in terms of transparency. My work will be to make it even more transparent to be ready for the competition which is tough. As Oleg Vyugin entered our board it proves I was right because he would never join an organisation he believes has no future.
RT: You have recently placed your IPO. Is the Western business world interested in Russian-based IPOs?
M.P.: I would say that VTB and Sberbank raised $US16.5 BLN which is enormous and reflects domestic and external confidence in the Russian banking system. As for MDM we do not need to get fresh funds in terms of capital, we have enough resources. IPO will be used if needed. There is definitely a need for fresh capital in the banking system because the growth is so big that banks need capital to meet the ratios.