Vnesheconombank Participates in Autumn Session of the International Monetary Fund and the World Bank

17 october 2013 года
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Vnesheconombank’s delegation headed by Chairman Vladimir Dmitriev participated in a series of bilateral meetings and multilateral events held as part of an autumn session of the International Monetary Fund and the World Bank (11-13 October 2013, the city of Washington).

In the course of their working meeting Vladimir Dmitriev and President of the European Investment Bank (EIB) Werner Hoyer discussed issues of EIB’s participation in Vnesheconombank’s current projects on supporting small and medium-sized enterprises in Russia, forthcoming joint events in 2014 devoted to funding infrastructure projects on Russia’s territory, pointed out a successful implementation of the Memorandum of Understanding signed as part of the initiative “Russia-the EU: Partnership for Modernization” and discussed the possibility of holding an annual meeting of G20 countries development banks by the European Investment Bank (similarly to the meeting of G20 countries development institutions’ heads organized by VEB in July of 2013).

As part of events in the city of Washington, Vnesheconombank Deputy Chairman – Member of the Board Alexandr Ivanov held talks with Vice President of the International Finance Corporation Dimitris Tsitsiragos. They discussed issues of the current cooperation including an agreement on projects in energy efficiency. There were also bilateral meetings with representatives of the World Bank and the Multilateral Investment Guarantee Agency (MIGA) which is a member of the World Bank Group.

Vnesheconombank’s representatives participated in the second annual meeting of the International Development Finance Club where the Club’s performance results for the year 2013 and its action strategy for the year 2014 were approved. UN Secretary General Ban Ki Moon was a Guest of Honor at the meeting, in his address he spoke about green financing which is one of the Club’s top-priority lines of activity.

 

Press Office of Vnesheconombank
Phone: +7 (495) 608-46-93, Fax: +7 (499) 975-21-34
E-mail: press@veb.ru

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Vnesheconombank Deputy Chairman – Member of the Board Sergei Lykov’s Interview to Prime News Agency

16 october 2013 года
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Vnesheconombank Deputy Chairman Sergei Lykov told in his interview to Prime Agency how the dynamic growth of the Bank’s loan portfolio influenced Vnesheconombank Group’s indicators in the first half of 2013, as well as in which sectors companies received the largest volume of credits and if VEB’s main borrowers are state corporations.

-How would you assess VEB’s performance for the 1st half of 2013?

-As a whole, I should say that despite the extremely negative situation abroad and known problems in the Russian economy Vnesheconombank Group was able to maintain stable development rates. Its consolidated financial statements, that is, statements with due regard to its subsidiary and affiliated institutions including foreign ones show that assets increased by 204 billion rubles from the start of 2013 or almost by 7%. This is higher than the growth in assets of the entire Russian banking sector that amounted to 6.5% for the same period of time. In our capacity of development institution we’re very happy that our loan portfolio increased by 230 billion rubles or by 15.4% (including in project financing where the growth amounted to 148 billion rubles, almost 24%) while in the banking sector as a whole these indicators in non-finance enterprises and institutions amounted to 5.3% and 13.7% - for natural entities. The proportion of credits to customers in Vnesheconombank Group’s assets increased from 51% to 55% for the first half of 2013.

-What economic sectors does Vnesheconombank regard as the most important in terms of extending credits?

-It’s well-known that the Bank’s main principles and lines of activity are set forth in the federal law “On the Bank for Development” and the Memorandum on its Financial Policies. Vnesheconombank’s subsidiaries are commercial institutions but their activities are closely related to addressing tasks that are set before Vnesheconombank. These tasks include overcoming infrastructure constraints, modernizing and developing non-raw materials economy, stimulating innovations, exports and implementing other projects.

In the first half of this year the Bank for Development played a major role in Vnesheconombank Group’s loan portfolio growth. Its proportion in the total volume of growth was almost 76% but I’d also like to underline excellent performance of such members of the Group as OJSC VEB-Leasing, its portfolio increased by almost 21.53% to 214 billion rubles as well as OJSC Belvnesheconombank, its portfolio increased by 23.3% to 47 billion rubles.

As far as economic sectors are concerned most credits were extended to construction and production sectors including mechanical engineering and defense industrial complex – 846.4 billion rubles (taking into account formed reserves) an increase of more than 23% for the first half of the year. Next in terms of growth rates are transport (18.1%), raw materials industry (19.3%), telecommunications (8%) science and education (almost 41.15%) but unfortunately the volume is still small).

Somehow it is believed that Vnesheconombank’s main borrowers are state-controlled companies. Vnesheconombank Group’s financial statements show that this is not the case. Almost 1552.2 billion rubles (taking reserves into account) were extended to private companies, that is, almost 80% of the whole loan portfolio.

-You’ve mentioned reserves formed against extended credits. What are their volumes and dynamics?

-As a whole in the first half of 2013, credit depreciation reserves increased by 21.1 billion rubles from 193.4 billion rubles to 214.5 billion rubles or by 10.9%. We view this increase as more than normal keeping in mind the dynamic growth rate of our loan portfolio as well as the fact that investment projects account for the greater part of this portfolio. Here I mean projects that are not attractive for commercial and financial sectors. During the first half of the year reserves ratio changed insignificantly from 11.4% to 11.1%.

-How did Vnesheconombank Group manage to ensure such a high growth rate of assets and loan portfolio?

-Vnesheconombank Group is making strenuous efforts to diversify its sources of financial resources. There’s no doubt that the state provides a great deal of support. Owing to subsidies received from the Russian Finance Ministry in the total amount of 77 billion rubles (62 billion rubles - for forming the Russian Direct Investment Fund and 15 billion rubles - for implementing top-priority projects in the Far East and in the Baikal region) the Group’s capital was increased to 599.5 billion rubles. I’d like to say that at the start of the 3d quarter the state made another financial contribution to Vnesheconombank’s capital in the amount of 4.068 billion rubles with Rostelecom’s shares.

VEB raised more funds from the Bank of Russia through using REPO transactions with securities in Vnesheconombank’s portfolio. As a result the debt to the Russian Government and the Bank of Russia increased by 33.1 billion rubles (+3.4%) to 1.015 trillion rubles. The Bank made strenuous efforts to expand volumes of financial resources raised on foreign and domestic capital markets. The amount of Vnesheconombank’s and its subsidiary banks’ and companies’ debt securities increased by 100.1 billion rubles (+25.7% from the start of the year) to 489.1 billion rubles. During this period the amount of funds raised from OECD credit institutions increased by 75.02 billion rubles (+28.0%) to 341.5 billion rubles. As a result the total amount of raised financial resources in the 1st half of 2013 increased by 192 billion rubles (+8.4%) and was 2.469 trillion rubles.

Thus, Vnesheconombank managed to raise 3.2 rubles for each ruble invested in its capital. The raised funds were used for modernizing the economy.

-As Vnesheconombank is a state corporation, that is, a nonprofit institution, generating profits is not an end in itself for it. Does Vnesheconombank continue to operate on a break-even principle?

-If we perform an analysis through comparing data for the first half of 2013 and the first half of 2012 on the basis of average chronological balance indicators we can see that profits went down from 21.6 billion rubles to 0.8 billion rubles. The main reasons are pretty objective: this is additional formation of reserves (and the reason for it is quite obvious – a sharp increase in the amount of investment projects in the Bank’s loan portfolio) and negative dynamics in foreign currency revaluation of balance sheets, the amount of balance decreased by 7 billion rubles for a comparable period of the last year.

And I’d like note that net interest income amounted to 46.7 billion rubles - an increase of 8 billion rubles (+20.8%) from the same period in the last year. Net interest margin remained stable at a level of 3.4%. The main reason for it was the growth of interest incomes to117.6 billion rubles due to the increased volume of the loan portfolio. Expenses also increased by 11.6 billion rubles (+19.5%) to 71 billion rubles. The growth in expenses was influenced by increased volume of raised funds and a certain increase in fund-raising rate from 6% in the first half of 2012 to 6.1% in the first half of 2013. In this respecrt it should be noted that Vnesheconombank’s capacity to raise financial resources is limited compared to major commercial banks as they can raise deposits from legal and natural entities and use balances of these accounts to conduct active transactions.

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Vnesheconombank was granted observer’s status in the International Investment Bank

14 october 2013 года
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State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ was granted observer’s status in the International Investment Bank (IIB).

Observer’s status was established in IIB this June to ensure effective cooperation with key partners. Vnesheconombank as one of the largest international development institutions and the main partner of IIB on the territory of the Russian Federation was the first institution to have been granted such status. In the near future IIB intend to grant observer’s status to a number of international and national development institutions.

The fact that Vnesheconombank was given observer’s status underlines a strategic nature of partnership between the two financial institutions. Vnesheconombank and the International Investment Bank entered into an agreement on cooperation in January of 2013. The agreement provides for expanding cooperation both on the Russian and international financial markets. IIB is actively cooperating with financing institutions incorporated in Vnesheconombank Group – SME Bank, Roseximbank, the Export Credit Agency of Russia (EXIAR) implementing through them its programs of supporting small and medium-sized enterprises and stimulating foreign economic activity in the Russian Federation.

Vnesheconombank’s expanded partnership with IIB opens up new opportunities for operating on IIB member countries’ markets and promoting Russian economic interests in Central and Eastern Europe and Asia.

The International Investment Bank is an international financial institution established and operating on an appropriate intergovernmental agreement. IIB members are Bulgaria, Vietnam, Cuba, Mongolia, Russia, Romania, Slovakia and Czechia. The Russian Federation has the largest stake in IIB capital (58%).IIB’s activity is aimed at funding small and medium-sized enterprises and supporting economic cooperation between IIB member countries. For the most part, the Bank uses agency funding principle. The Bank gives high priority to cooperation with national and international financial institutions. The Bank focuses on opening targeted credit lines for national development banks and IIB member countries’ export-import banks as well as on participating in programs aimed at syndicated funding of investment projects.

 

Press Office of Vnesheconombank
Phone: +7 (495) 608-46-93, Fax: +7 (499) 975-21-34
E-mail: press@veb.ru

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Vnesheconombank Wins International IAIR Awards

14 october 2013 года
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Vnesheconombank was recognized as the best financing institution in the category “Excellence in Banking/Investment Business/Russia” according to Italian financial and economic magazine IAIR.

The winner was identified by a decision of the magazine’s editorial board on the basis of the internet-research results in which the magazine’s readers participated.

An awarding ceremony was held on the Italian Stock Exchange trading floor (the Group of London Stock Exchange) in Milan. In attendance of the ceremony were more than 50 companies whose main principles are development of innovations and commitment to sustainable development.

The magazine traditionally gives awards to banks, corporations, holdings and companies operating in accordance with principles of ecological and social responsibility.

International IAIR Awards was established by Italian business magazine IAIR (international Alternative Investment Review) in 2010.

 

Press Office of Vnesheconombank
Phone: +7 (495) 608-46-93, Fax: +7 (499) 975-21-34
E-mail: press@veb.ru

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Vnesheconombank’s Financial Statements under IFRS for Six Months of 2013 Published

11 october 2013 года
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Vnesheconombank publishes consolidated financial statements under IFRS for six months of 2013

1. Dynamics of main components of assets and liabilities

(analysis on the basis of comparing balance indicators as of 30.06.2013 and 31.12.2012)

As of the end of the first six months of 2013, assets amounted to 3 123 billion rubles. Assets increased by 204 billion rubles (+7.0%) from the start 2013.

The growth in assets was for the most part brought about by the increased portfolio of loans extended to customers, it increased by 229.9.2 billion rubles (+15.4%) to 1 727.1 rubles. The proportion of credits to customers in the assets of Vnesheconombank Group for the first six months increased from 51% to 55%.

At the same time, in the first six months, the amount of investment financial assets available for sale and withheld before redemption (including investment financial assets made available as security for REPO transactions) decreased from 53.0 billion rubles (-10.1%) to 469.2 billion rubles (as of 31.12.2012 - 522.1 billion rubles). The decrease in the said assets was brought about by the redemption of eurobonds in January of 2013 and the sale by Vnesheconombank Group’s participants of a part of blocks of bonds as well as their decreased revaluation balance sheet.

The following changes occurred in the resource base.

The amount of liabilities for the first six months of 2013 increased by 136 billion rubles (+5.7%) to 2 523 billion rubles as of 30.06.2013.

The amount of issued debt securities increased by 100.1 billion rubles (+25.7%) to 489.1 billion rubles). Funds received through issuing bonds were raised by both Vnesheconombank and its subsidiary banks and companies.

In the first six months of 2013 the amount of funds in credit institutions increased by 36.5 billion rubles (+6.4%) to 606.4 billion rubles. This was caused by raising long-term financing on market terms from OECD countries’ credit institutions

The debt to the Russian Government and the Bank of Russia increased by 33.1 billion rubles (+3.4%) to 1 015.0 billon rubles largely because of the increased amount of funds raised from the Bank of Russia under REPO agreements.

The amount of other obligations decreased by 57.4 billion rubles to 48 billion rubles. As of 31.12.2012, this item also specified subsidies received from the Russian Finance Ministry in the total amount of 77.0 billion rubles (62.0 billion rubles - for forming the Russian Direct Investment Fund and 15 billion rubles - for implementing top-priority investment projects on the development of industrial, transport and energy infrastructure on the territory of the Far East and the Baikal region). Due to their targeted use these funds were specified in the additional capital.

From the start of the year Vnesheconombank Group’s capital increased by 67.6 billion rubles (+12.7%) and as of 30.06.2013 was 599.5 billion rubles. Besides the subsidies received from the Russian Finance Ministry in the amount of 77.0 billion rubles, capital that accounts for non-controlling participation shares increased by 6.9 billion rubles. At the same time unrealized revaluation of assets available for sale decreased by 20.5 billion rubles (- 49/9%) to 20.6 billion rubles.

2. Dynamics of main profit components

(analysis on the basis of comparing data for the first six months of 2013 and the first six months of 2012, balance indicators were compared on the basis of mean chronological values for respective periods).

In the first six months of 2013 profit amounted to 0.8 billion rubles and this is 20.7 billion rubles less than the profit generated in the same period of 2012 (21.6 billion rubles).

Net interest income was 46.7 billion rubles this is 8 billion rubles (+20.8%) more than in the same period last year.

Interest incomes increased by 19.6 (+20.0%) billion rubles from the first six months of 2012 to 117.6 billion rubles. The main reason was the increased returns (+3.1 billion rubles) on credits and financial leasing associated with increased volumes of the said transactions.

Interest expenses increased by 11.6 billion rubles (+19.5%) to 71.0 billion rubles.

Interest expenses increased by 8.3 (+49.6%) billion rubles to 25.0 billion rubles, with regard to funds raised from credit institutions and the Bank of Russia increased due to the growth in average amounts of raised funds (from 695.8 to 869.1 billion rubles). At the same time an average rate of raising these funds increased from 4.8% in the first six months of 2012 to 5.8% in the first six months of 2013.

Expenses on issued debt securities increased by 4.1 billion rubles (+38%) to 14.6 billion rubles due to the growth in average volumes of issued debt securities from 301.8 billion rubles in the first six months of 2012 to 458.9 billion rubles in the first six months of 2013.

In the first six months of 2013 there was a negative balance of incomes/expenses with regard to transactions in foreign currency in the amount of 8.7 billion rubles In the same period of 2012 net income from the said transactions was 5.3 billion rubles.

In the accounting period non-interest expenses (minus expenses on forming other reserves against depreciation of assets) increased by 4.9 billion rubles to 25.1 billion rubles from the first six months of 2012

The amount of expenses on forming reserves and against depreciation of assets increased by 16.0 billion rubles to 26.8 billion rubles in the first six months of 2013 from the same period in 2012.

 

Press Office of Vnesheconombank
Phone: +7 (495) 608-46-93, Fax: +7 (499) 975-21-34
E-mail: press@veb.ru

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