The economic changes in Russia with its huge resources, markets and industrial potential, provide unprecedented opportunities to foreign businessmen. Bashkortostan is one of Russia's major industrial regions, rich in oil, having developed the petrochemical industry, mining, forestry and agriculture.
Since being granted economic sovereignty in 1990 Bashkortostan has sought to develop its economy and use of resources as rapidly and efficiently as possible. It is able to determine its own policy within the Russian Federation while being crucial to the country's economy.
Located in the South Urals at the crossroads of Europe and Asia, and being one of Russia's largest republics, Bashkortostan intends to take maximum advantage of its geographical position. Its territory of 143,600 sq. km is twice that of Ireland.
The population exceeds four million people. Over one million inhabitants live in Ufa, the capital. The Republic has 54 administrative districts.
Of all Russian regions Bashkortostan today seems to be about the most attractive and interesting for foreign investors. This is confirmed by numerous business delegations arriving in the Republic from almost every part of the world. Our region attracts foreign entrepreneurs with its political stability, wealth of natural resources, great opportunities in various economic projects.
The Republic is open for mutually beneficial contacts with any country. Attracting foreign capital into different spheres of the national economy is one of the best ways to ensure good economic growth in Bashkortostan.
In the present economic circumstances the ongoing fall in profitability of operations on financial markets has forced the Russian banks to penetrate more actively into the production sphere. In 1996 amalgamations of financial and industrial capitals already existing or newly formed in this or that shape have become evident. And the Republic of Bashkortostan is not an exception in that.
With this background the Bashkir Republican Investment and Credit Bank BashCreditBank has not changed the strategy of a Regional Development Bank, which is assigned to attract, direct and service investment flows in the Republic of Bashkortostan's economy. From the viewpoint of implementing this strategy the following achievements and developments can be named most significant in the bank's life in 1996:
On 15 November 1996 a decision was taken by the FRG Government interministerial commission for the State Insurance Company Hermes to acknowledge BashCreditBank as a self-sufficient borrower/guarantor within a credit line by Deutsche Bank AG. On 21st November 1996 a base agreement was signed with Deutsche Bank AG to grant a credit line to RICB BashCreditBank.
During 1996 talks were held with major European banks (Kreditanstalt, Germany, Paribas, Eurobank, France, Raiffeisen Zentralbank, Austria; Banco Bilbao Vizcaya, Spain, Banca del Lavoro, Italy, Credit Suisse, Switzerland) to open credit lines for BashCreditBank and to credit equipment deliveries for plants in Bashkortostan under the guarantees of BashCreditBank. A series of consultations with the World Bank were held on carrying out ecological projects in the Republic. In the second half of 1996 BashCreditBank put forward investment proposals on setting up production of home-use machines and equipment to Clinvest bank of the Credit Lyonnais group.
While developing its clearing services and integrating with international settlement system in 1996 BashCreditBank increased the number of its foreign correspondent banks by over 25 per cent. At present the bank's foreign correspondent network incorporates 29 banks in the world financial centres of Europe, North America and Japan. Among the newly joining banks are: ABN Amro Bank BV (the Netherlands), Banque Paribas (France), Eurobank (France), etc. Having wide possibilities in international settlements BashCreditBank renders assistance to smaller Bashkir banks. Today virtually all banks in the Republic of Baskortostan holding hard currency licences work through correspondent accounts of BashCreditBank using them actively to execute their hard currency operations. In the interests of its customers the bank was active in reducing charges and fees on their operations.
Constant attention to the bank's customer demands contributed to increasing the number of bank-serviced plants participating in foreign trade activities by 25 per cent last year alone. Hard currency accounts were opened for major industrial and trade enterprises of Bashkortostan, among which are Bashkir petrochemical company, Sterlitamak petrochemical plant, JSC Kauchuk, JSC Kaustic, Ufa state plant Chimprom, Ufa vitamin plant, Sterlitamak tannery BAKO, etc.
In 1996 the turnover of foreign exchange deals with overseas banks rose significantly due both to the bank's own funds and operations on customers' requests. BashCreditBank's main partners on US$-DM, $-Yen deals are Credit Suisse First Boston (London, Zurich), Dresdner Bank AG (Frankfurt), Deutsche Bank AG (Frankfurt), Commerzbank AG (Frankfurt), Banca Nazionale Del Lavoro S.P.A. (Roma), Raiffersen Zentralbank (London), Bank Austria (London), Paine Webber Ltd (London). Free lines have been established with most of these. To further develop these activities in 1997 option deals are planned.
The bank financed foreign trade developing such forms of settlements as letters of credit, forfeiting and collection, which enable plants to increase the efficiency, promptness and reliability of international payments. The total value of import L/Cs opened to Bashkir plants in 1996 exceeded US$6 million. BashCreditBank issued bank guarantees for over US$1 million.
A great number of new foreign trade agreements prepared last year must, as conceived by BashCreditBank, significantly broaden the range of operations carried out and improve their quality.
Last year BashCreditBank took an active part in preparing and carrying out important intergovernmental agreements of the Russian Federation with France, the FRG and other countries. This presented the Bashkortostan plants with serious possibilities in financing reconstruction projects and creating new businesses.
All this work was accompanied through gathering and handling significant volumes of information, their thorough and overall analysis and complex consultation on the likely objects of investment. In rendering these services the bank has proved to be one of the most professional financial institutions in the country.
The bank's permanent presence in authoritative ratings of Russia's largest credit organisations objectively testifies to the high quality of BashCreditBank's financial management, its efficient activities and conformity with international standards in rendering financial services. According to independent estimates RICB BashCreditBank occupies leading positions in the banking community in terms of steadiness, reliability, stability and efficiency.
Banks we choose (the rating of Russia's largest banks as of 1st June 1996). Izvestiya daily newspaper, No. 185, October 2, 1996.
In this rating experts from the 'Rating' Information Centre analysed the operational scope of Russia's major banks and changes in their performance since the beginning of this year. In the analysts' opinion, BashCreditBank occupies, among the country's leading banks:
Russian commercial banks (The rating of largest Russian banks as of July 1, 1996). Economica y zhiznh weekly newspaper, No. 46, November 1996.
According to this rating based on the data of Economica y zhiznh Banking Information Agency, BashCreditBank ranks among Russia's l00 largest banks as:
This rating is published periodically by the Interfax Financial Information Agency Economic Analysis Centre. According to this the bank takes:
Services rendered by BashCreditBank in the area of project financing: