On March21, 2005, Vneshtorgbank and the Government of the Moscow region signed a Cooperation Agreement aimed at pooling efforts to conquer social and economic development challenges the Moscow region is presently faced with.
The Agreement was signed by Boris Gromov, Governor of the Moscow region, and Andrey Kostin, Chairman and CEO of Vneshtorgbank.
Under the Agreement, Vneshtorgbank shall participate in financing industries which are of crucial importance for the social and economic development of the Moscow region, in providing support to key enterprises and extending a wide spectrum of sophisticated banking services and products to businesses located in the region.
Also, Vneshtorgbank shall contribute to enhancing investment growth potential of the Moscow region. The Bank will help the Government implement its projects and programs designed to encourage small- and mid-size businesses, as well as to support entrepreneurship. Lending programs will be offered to municipal entities and unitary enterprises. Vneshtorgbank and the Moscow region Government have already established and maintained mutually rewarding relationships, which, among other things, enable the Government to overcome the problem of the region budget deficit. Presently, Vneshtorgbank has set a limit to allow extending credits to and accepting guarantees of the Moscow region Government.
At year-end 2004, Vneshtorgbank jointly with the Moscow region Ministry of Finance succeeded in implementing the program of lending Moscow region municipalities to help them meet their commitments under budget loans extended by the Moscow region Ministry of Finance. At the end of 2005, the Bank plans to continue its participation in the program of short-term lending to municipal entities and unitary enterprises eligible for getting loans from the region budget.
Furthermore, a number of Vneshtorgbank's strategic customers are also operating in the Moscow region. Striving to support regional industries, VTB is pro-actively participating in financing such key enterprises as Orekhovo-Zuevo glass company, 'Tsentrtelekom' JSC, 'Mosselprom' company, and Schelkovsky vitamin factory. Besides, Vneshtorgbank has already established a positive record of offering payroll services to military and law enforcement divisions located in the Moscow region.
The Agreement also stipulates that Vneshtorgbank shall continue to structure and develop Moscow region securities market. Acting in this capacity in 2004, Vneshtorgbank arranged a placement of the Moscow region Government bonds, which proved to be the largest on the Russian market of sub-federal borrowings.
In the near term, Vneshtorgbank is set to considerably increase the volume of mortgage lending to the region's households and is considering its participation in the regional mortgage projects, which would also involve the Moscow region investment trust company (an authorized entity of the Moscow region Government in housing construction with the use of targeted budget loans to be replaced by commercial mortgage loans).
Currently, operating in the Moscow region are the following Vneshtorgbank's offices - in Zukovka, Lyubertsy, Mitischy and Podolsk. Vneshtorgbank also plans to increase its activities with those municipal entities where the Bank`s offices are already open. Within the framework of such activities, credit limits set for Podolsk and Mitischy will be most actively used.