Transcript of the beginning of the meeting:
Vladimir Putin: Mr Dmitriyev, I have two questions for you. First, how do you support small companies? I know that you have issued Eurobonds, so my second question is about this process.
Vladimir Dmitriyev: Support for small and medium-sized companies is one of our priorities. We pledged to expand this programme by the end of this year and to provide support for small and medium-sized business all over Russia. We are confident that by the end of the year about 100 billion roubles will be transferred to small and medium-sized companies through the Russian Bank for Development (RBD). We are also launching new programmes in this area, primarily those connected with co-financing. In the past, Vnesheconombank (VEB) and the RBD transferred money to other banks that funded small and medium-sized companies. Now in exchange for lower interest rates, we are encouraging other banks to co-finance small and medium-sized companies. For instance, for every rouble provided from our funds, the bank in question directs another rouble to small and medium-sized companies, getting a rate that is much lower than usual.
Vladimir Putin: How much lower?
Vladimir Dmitriyev: We hope that by the end of the year the average interest rate for the borrower will stand at 12%. When the programme was launched the rates of regional banks for borrowers reached 20%, but now they have gone down considerably. On average, we have reached 12%. The lowest rates are given to the banks that are involved in co-financing and issuing loans to small and medium-sized innovative companies.
Vladimir Putin: How much will you contribute this year?
Vladimir Dmitriyev: We will provide borrowers, that is, small and medium-sized companies, with 100 billion roubles. But since VEB is a group, we intend to channel a total of 125 billion roubles into the support of small and medium-sized companies through our subsidiaries – the Globex bank, Svyazbank and the National Trade Bank.
Vladimir Putin: Not bad. This is a solid figure.
Vladimir Dmitriyev: We are going to increase this assistance to small and medium-sized companies to 250 billion roubles by 2015.
Vladimir Putin: How is your work proceeding with small and medium-sized companies? You must understand their capabilities, their economic and financial status, and how they observe financial discipline...
Vladimir Dmitriyev: We have a very low rate of loan default or bad loan service. As I've reported to you, we have placed our bets on supporting the real economy although small and medium-sized companies are also actively involved in trade. But we have refocused our support to the real economy sector. Five years ago, about 60% of our funds went to small and medium-sized companies in trade, whereas now 60% go to the companies involved in industry, construction and transport. We issue this monthly bulletin (shows the bulletin to Mr Putin) that specifies the spheres in which we work in every city and region.
Vladimir Putin: This means that small and medium-sized companies in the real sector of the economy are reliable and stable borrowers.
Vladimir Dmitroyev: Absolutely. Incidentally, support for small and medium business was a major anti-crisis measure. We felt a lot of demand particularly during that time when people were laid off, for obvious reasons. Unemployment was a devastating consequence of the crisis, but small and medium-sized companies employed many people.
Vladimir Putin: Let's briefly discuss the placement of Eurobonds.
Vladimir Dmitriyev: Our team has just returned from a world tour. We visited different parts of the world, meeting investors from South-East Asia, America and Europe. Luckily, we managed to place two loans, one of which was a 15 year-long debut loan for domestic corporate borrowers. We expected the demand to be high. We took a billion dollars at an unprecedentedly low rate for our domestic borrowers. Oversubscription was four times over and we stuck to suitable parameters.
The second issue was a $600 million loan for seven years. So, this year we placed our successful debut loan of $1.6 billion, and now we have two tranches – for 15 and seven years. This shows that trust in Russian borrowers has been restored. Understandably, our ranking is at the sovereign level and our risk is considered to be quasi-sovereign, but this is still a serious bid for the success of Russian borrowers in capital markets. There is great interest and the investors are different. They are evenly distributed in America, Europe and other parts of the world. I'm sure that investors trust Russia and are ready to invest huge amounts of money in the long term.
Vladimir Putin: Are you happy with the results?
Vladimir Dmitriyev: Absolutely.
Vladimir Putin: Good.