Transcript Factoring market in Russia and CIS: market trends and future

Establishing a factoring
business in Russia?
Factoring market in Russia and
CIS:
market trends and future
scenarios.
ILYA POKAMESTOV
Business Development Director,
Financial Company
POLITEKS(Russia)
ABOUT POLITEKS
• POLITEKS LLC was created in 2003 as an affiliate
company of B&N BANK. POLITEKS offers financial
lease (leasing) and a whole range of factoring services.
In 2008 a limit of operation of financial lease reached 1,1
billion RUB. During operating time such companies
became our clients: SBARRO, REN-TV, OOO “City
Bowling”, OAO “Volgatelecom”, OAO “Ulyanovskenergo”
and others.
• May 2011 POLITEKS commenced operations of
factoring services.
• November 2011 POLITEKS member of IFG.
B&N BANK‘S NETWORKS
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B&N Bank – is a successfully
developing universal bank with a
wide sales network over 120
offices in different regions of the
Russian Federation.
B&N Bank is among TOP-50
Russian banks. As of included in
TOP-30 biggest Russian banks
according to CBR Consolidated
Statistical Data.
Moreover, the Bank’s sales network is
supplemented by branches of two banks
consolidated in the banking Group (14 points of
Bashinvestbank and 27 points of Vyatka-Bank).
RUSSIA-Market size
140
120
Growth Rate [CAGR, 2005-2007]
China
100
80
Russia
60
40
UK
India 20
0
Brazil
0
100 000
Bubble size shows GDP penetration
Market Size, [mln. euros]
200 000
300 000
Market Volumes
Market historical volumes and forecast [mln. euros]
0.8%
1.1%
1.6%
2.1%
2.7%
3.0%
45 864
+58%
30 576
23 520
Penetration
[% to GDP]
14 700
8 420
4 633
2005
2006
2007
2008
2009
2010
Forecast
Source: Expert RA, AFC analysis
882 bln. RUB-TURNOVER 2011,
165 bln. RUB-OUTSTANDING Dec. 2012,
Forecast 2012-1500 bln. RUB
Benchmarking against mature
markets
Financing per client, mln. euros
Germany
10,0
Finland
8,9
UK
Russia
Source: FCI, AFC analysis
5,0
1,8
Segmentation
LE
5700
Clients
10%
49%
ME
47%
17200
Debtors
36%
SE
43%
14%
2011
2011
73
Operators
Factoring
clients base
Regional aspects
High Coverage
2002
2003
2003
326
423
958
Source: Expert RA, AFC
2007
75,000
Medium Coverage
Market players
Factoring market: breakdown by type of player [2011]
3%
35%
62%
Factoring departments under bank's umbrella
Factoring companies that operate with banking
mother structure
Non banking factoring companies
Source: Expert RA, AFC analysis
Market players
Label
Label
Label
Label
Source: Expert RA, AFC analysis
Market Trends
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Consentration
IT problems
HR problems
Legal aspects
Risk issues
No infrastructure
Lobbying
Market Trends
•Russia's potential to play a major role in
the world economy is to be underpinned
through the establishment of a financial
hub
•So far international factoring in Russia
takes only 1% of the factoring turnover, far
behind the world's 11%
Regulations-bound scenario
•Tough Way suggests the appearance of
the state regulator in the factoring market.
I.E., the licence regime would appear that
would be the main lever of the market
•Effectively this would bring the market
under state control, undermining its
flexibility and adaptability
Regulations-free scenario
•Liberal Way means, that factoring market
will be developed with a self-regulation
scheme.
•In this case – The Russian Association of
Factoring Companies will become the
main regulation body on the market.
•Flexibility but "fair-play" rules followed
To start factoring business in
Russia: Challenges
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Legislation
Lack of professionals
IT platforms
Unstable macro and micro perfomance
Political risks
To start factoring business in
Russia: Benefits
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Gross margins
Huge potential market
Leading role in community
CIS markets
Low entrance barriers
Ways to enter Russian Factoring
market:
• Affilate Company
• Factoring departments in international
Banks
• Buy out Russian Factoring Company
• Joint venture with Russian Factors
• Joint venture with international investors
FACTORing in CIS
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Ukraine
Belorussia
Kazakhstan
Moldova
Armenia
Questions?
Many Thanks!
Contacts:
• ILYA POKAMESTOV
www.politeks.ru
• +7(495) 748-50-50
Director of Business Development
Financial Company POLITEKS
[email protected]
www.factoringpro.ru
+7(499) 940-8798
General manager
[email protected]