Promsvyazbank develops cooperation with China on international factoring

25.05 | 2009

The volume of Promsvyazbank’s (PSB) international factoring transactions with China increased by 55.7% to €52 million in 2008, with the number of invoices factored to PSB amounting to 780 and the number of credit covers issued by PSB under international factoring transactions - to 14. According to Factors Chain International (FCI), a global network of leading factoring companies, PSB is a number one Russian factor in the Russian-Chinese trade.

In 2008, the volume of PSB’s international factoring transactions, including both export and import transactions, reached €64.7 million. As a result, PSB’s market share, according to FCI, reached 74% and 73% in export and import factoring, respectively. In addition, China was PSB’s leading partner by the volume of international factoring among the countries of the Asia-Pacific region. For comparison, the volume of factoring transactions (a two-factor model) with South Korea amounted to €3.1 million, with Thailand – to €3.6 million and with Taiwan – to €1.2 million in 2008.

"The use of factoring in trade with China has a great potential for growth", says Victor Nosov, Head of PSB’s Factoring Department. "We frequently attend Russian-Chinese high-level gatherings on interbank and trade cooperation in order to boost the efficiency and scope of factoring operations between our countries."

PSB deals with its Chinese partners within the framework of a two-factor model (i.e. in cooperation with a factor in China) under open account terms, with payments made in contract currencies.

Additional information: PSB has been operating in the factoring market since 2002, providing its customers with a broad range of advanced factoring services, including domestic (recourse and non-recourse factoring) and international (recourse and non-recourse export factoring, and import factoring).

According to Q1 2009 results, PSB factoring portfolio reached RUB 22.3 billion (as at 01.04.2009), an 11% increase in comparison with the same period last year. As per 1Q 2009 results, the volume of accounts receivable assigned to PSB stood at RUB 27.8 billion, while the volume of funds provided by PSB to its clients reached RUB 20 billion. During Q1 2009, PSB had over 140 000 deliveries turned to it by clients and signed 120 factoring contracts, including 54 contracts signed by the regional offices.

According to Expert RA rating agency, PSB was an undisputed leader in Russia’s factoring market in 2008, with a 23.5% market share.

The volume of accounts receivable assigned to PSP reached RUB 142 billion in 2008; the volume of funds provided by PSB to its clients amounted to RUB 108 billion; clients turned to PSB for factoring services on approximately 700,000 deals with 4,900 debtors.

PSB has been a member of Factors Chain International, a global network of leading factoring companies, since 2003, and held, according to FCI, leading positions in international factoring in Russia in 2008, with 74% and 73% market shares in export and import factoring, respectively.

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About Promsvyazbank

OJSC Promsvyazbank, founded in 1995, is one of the leading privately-owned Russian banks, with total assets of RUB461.8 billion, and total capital of RUB49.9 billion under IFRS as of 31 December 2008. Holding company Promsvyaz Capital B. V. owns 84.68% of the Bank, the remaining 15.32% are owned by Commerzbank Auslandsbanken Holding AG, a subsidiary of the second-largest German bank Commerzbank AG. PSB has the following international credit ratings: “Ba2” from Moody’s Investors Service; “BB-” from Standard & Poor's; “B+” from Fitch Ratings. As at 1 April 2009, the regional network of the Bank in Russia encompassed 48 branches, 196 sub-branches and other types of outlets and 1 representative office; as well as a foreign branch in Cyprus; and foreign representative offices in Kyrgyz Republic, Ukraine, China, and India.

Banking Group Promsvyazbank includes OJSC Promsvyazbank (head organization), OJSC Volgoprombank, OJSC Yarsotsbank and OJSC Nizhny Novgorod Bank. www.psbank.ru