Vnesheconombank’s First Deputy Chairman Nikolay Tsekhomskiy: ‘Vnesheconombank’s Strategic Goal Is to Support Tomorrow’s Economic Sectors’
A pillar of Vnesheconombank’s new strategy is to focus its efforts on the key areas of support for the Russian economy. This was stated by Nikolay Tsekhomskiy, First Deputy Chairman and Member of the Board of the Vnesheconombank, at the plenary session “Russian Financial System: How to Best Match Industrial Growth” during the 9th Moscow Financial Forum.
“We divide our priorities into two main areas: the economic sector with catching-up development and the economic sector with outstripping development,” Nikolay Tsekhomskiy said. “In the area of catching-up development, Vnesheconombank supports high-technology production, infrastructure and non-resource exports. These areas are key drivers of the Russian economy today. However, no less significant is our goal to support the sectors that will shape the future of the Russian economy. Therefore, Vnesheconombank finds it important to support innovation, a digital economy and projects of the National Technology Initiative.”
According to Nikolay Tsekhomskiy, in the conditions where the sources of Russian and foreign investment are limited, the development of effective mechanisms for raising funds is of particular significance. One of these mechanisms is the Project Financing Factory, which is based on the principle of risk sharing through syndicated lending.
Vnesheconombank’s participation in the Project Financing Factory will make it possible not only to spread risks among lenders but also to obtain financing from new long-term institutional investors. One of the main instruments of government assistance within the Project Financing Factory is subsidised loan interest rates linked to inflation and compensation for inflationary expectations in the country.
Concerning medium-term inflation in Russia, the Forum participants gave an optimistic forecast. According to Andrey Lipin, Deputy Director of the Monetary Policy Department of the Bank of Russia, inflation will be low in the medium term, about 4% per year until 2021.
To improve the workflow with customers, VEB has introduced the Customer Electronic Office. The bank’s customers now will be able to submit documents electronically using enhanced encrypted and certified digital signature.
“This is an important step both for the bank and VEB Group in general. The new system will save customers’ time allowing them to submit filings online and will significantly reduce the circulation of printed documents. This is of particular importance for investment business where time is the most valuable of all commodities,” pointed out Dmitry Kurdyukov, Vnesheconombank’s First Deputy Chairman and Member of the Management Board.
First customers are expected to be connected to the system by the end of 2017 and starting from 1 Quarter 2018 the service will be available to all bank clients.
The electronic office will help optimise the document flow with the customers, inform the customers of the progress of the conditions precedent and ensure the prompt feedback on applications. However, the bank reserves the right to request printed copies.
The new customer service procedure will primarily be applicable to the bank’s investment units. The bank also plans further optimisation of the electronic document and work flow with customers, including by introducing new functions to the Customer Electronic Office.
State Corporation "Bank for Development and Foreign Economic Affairs (Vnesheconombank)" redeemed its Eurobonds Series 2 issue on November 22, 2017.
The Eurobonds for a nominal amount of USD 600 mn were issued on the Irish Stock Exchange in 2010 with a seven-year maturity period and an annual coupon rate of 5.45%.
The redemption of the Eurobond issue and coupon payments were executed in full and in accordance with the terms of the prospectus.
Irish Stock Exchange cancelled listing of Eurobonds Series 2 with effect from 22nd November 2017.
VEB selects the ‘second wave’ finalist candidates for regional manager positions
Vnesheconombank has completed the evaluation of the ‘second wave’ candidates for regional manager positions. The winners include 28 candidates from 23 Russian constituent entities who will enter into cooperation agreements with the Bank and set about to search for ambitious projects in their respective regions.
Candidates from these regions submitted their applications via the Agency for Strategic Initiatives LEADER-ID platform as part of the VEB new regional-level interaction model. The highly-skilled professionals will search for investment projects for the Bank’s loan portfolio.
During the second qualifying round held in 62 regions, VEB received 323 applications for regional manager positions. From August to October, the Bank experts conducted a closed review of the application forms followed by the interviews with candidates. Afterwards, the candidates took part in remote testing that comprised the assessment of skills such as business-thinking, entrepreneurship, project and task administration, relationship building and influence, open-mindedness and leadership. Following the results, the Bank expert commission identified 28 winners representing 23 regions.
“VEB is taking a new approach to building its federal representative network. The selection was conducted in a highly competitive environment. The successful candidates have shown a comprehensive knowledge of the economy and investment potential of their regions. The best results were demonstrated by candidates from the Novosibirsk, Amur and Chelyabinsk Regions, as well as the Krasnoyarsk Territory. Notably, the Krasnoyarsk Territory has got a complete team of three managers, which is the maximum in compliance with the selection criteria. However, not all regions were represented by strong candidates meeting the strict requirements of Vnesheconombank. In such regions, the selection process continues as the ‘third wave’, the results of which we will announce in December”, said Alexey Ivanchenko, Vnesheconombank Deputy Chairman and Member of the Management Board.
In the near future, the ‘second wave’ winners will undertake on-line training to acquire necessary knowledge and skills to search for investment projects compliant with the VEB requirements.
In December, Moscow will host the Second Conference of regional managers where our new colleagues will be able to better familiarize themselves with Vnesheconombank profile, current business processes, project preparation and implementation stages, as well as take part in practical work, sign cooperation agreements and receive certificates to validate their status.
Thus, based on the first and second qualifying rounds, Vnesheconombank regional team will be represented by 53 regional managers in 39 constituent entities of the Russian Federation. We expect Vnesheconombank to have its representatives in more than a half of the country’s regions.
The First Conference of Vnesheconombank regional managers was held from 25 to 26 September. The VEB regional manager network project was supported by Russian Minister of Economic Development Maxim Oreshkin, ASI General Director Svetlana Chupsheva, Business Russia Association President Alexey Repik, Kaliningrad Region Governor Anton Alikhanov and other government officials and business officers who spoke at the conference.
During the first wave, the Bank selected 25 regional managers from 16 Russian constituent entities who got down to work in September.
Regional managers are not on the staff of Vnesheconombank, operate in compliance with cooperation agreements and are remunerated on a ‘success fee’ basis.
Regional managers, project initiators and the Bank interact on a specially-built on-line platform, which became operative in September. The on-line platform is designed to automate the following stages of the investment project lifecycle:
- Origination of clients’ applications and project filtering;
- Rapid project assessment by regional managers;
- Initial project filtering by the VEB control team;
- Providing the Bank with a project concept and business model to initiate in-house expert review
State Corporation “Bank for Development and Foreign Economic Affairs (Vnesheconombank)” is a national development bank and one of Russia’s largest financial institutions. Established in 1924, Vnesheconombank has been operating in compliance with the special Federal Law “On Bank for Development” since 2007. The Bank’s supreme governing body is its Supervisory Board headed by Chairman of the Russian Government Dmitry Medvedev.
The VEB Strategy 2021 provides for an increased focus on financing sophisticated industrial projects, infrastructure, non-resource exports, innovations and projects of the National Technological Initiative (NTI). Seeking to operate at a whole new level of quality, VEB will pro-actively search for projects complying with the state priorities, conduct in cooperation with its customers in-depth analysis of business projects, raise private co-investment, and monitor project delivery using state-of-the-art technology.
Agency for Strategic Initiatives (ASI) is a Russian autonomous company established by the Russian government in 2011 to implement a set of economic and social measures. The Agency promotes priority projects, takes measures to enhance Russia’s business environment, develops human resources, etc.
LEADER-ID is ASI information platform designed to search for, develop and promote leaders. Start of work: July 2013. Number of users: over 91,000.
VEB has launched disbursement of funds to JSC Saratov Institute of Glass for the upgrade of glass manufacturing facilities. The project will boost the plant's capacity from 150 to 350 tonnes per day and will enable manufacturing of new products. As a result, the annual output is expected to reach 10.2 million sq m. VEB’s commitment approximates RUB1bn.
As set out in the strategy, VEB’s activity will facilitate achievement of a wide range of government’s goals in social and economic development, including import substitution. In some sectors, Vnesheconombank’s projects will allow to reduce dependence of the Russian market on import supplies.
“Products manufactured by Saratov plant are one of a kind. There are no other facilities manufacturing glass of this type in Russia, Saratov Institute of Glass is the sole manufacturer of special glass. The reconstruction of the existing facilities will help increase the plant’s output. The products will be made available on the open architectural and structural glass market. The institute can ensure full import substitution,” said Dmitry Kurdyukov, Vnesheconombank’s First Deputy Chairman - Member of the Board.
Special glass (tinted, in bulk tinted, colourless glass with high light transmittance factor and strength) is used in aviation, transport, construction, industrial processing and furniture industry.