Vnesheconombank published consolidated financial statements of the VEB Group for the three-month period that ended March 31, 2018 as prepared in compliance with IFRS
Vnesheconombank published consolidated financial statements of the VEB Group for the three-month period that ended March 31, 2018 as prepared in compliance with IFRS.
The VEB’s Group key performance indicators are as follows:
- The VEB’ Group assets as at March 31, 2018 went up by 1.9% (+ RUB 62.8 bn) as compared to the beginning of 2018 to reach RUB 3 438.8 bn, stipulated by the increase in current accounts with banks due to the proceeds of federal budget’s subsidy received at the end of March.
- Loans to customers account for 52% of the Group’s total assets. As compared to the end of 2017 loans to customers less allowance for impairment went up by RUB 8.5 bn (+0,5%) and reached RUB 1 792,5 bn. The total amount of loans to customers less allowance for impairment was impacted by the adjustments to loss allowance according to IFRS 9, which presupposes expected credit loss rather than incurred loss model.
- Total liabilities of the Group as at March 31, 2018 went up by 0.7% (RUB +22,3 bn) to RUB 3 002.6 bn, primarily due to the rise in the book value of subordinated deposits due to the change initial terms of fund raising. Additionally in accordance with requirements of the new IFRS 9 standard, allowance for impairment of financial guarantees recorded in liabilities was made.
- Amounts due to banks and debt securities issued account for 54% of total liabilities (as at the end 2017 this share was 55%). In the first quarter the share of amounts due to Western banks and Eurobond investors in liabilities continued its decline, decreasing from 33% to 28% by RUB 82.8 bn.
- As of the first quarter end the Group recognized a loss of RUB 21.5 bn. The major factor that contributed to the negative financial result was a one-time non-interest expense of RUB 44.5 bn reflecting an unamortized part of the previously recognized gain on NWF foreign currency-denominated deposits.
- The Group’s equity in the first quarter of 2018 increased by RUB 40.5 bn (+10.2%) and as at March 31, 2018 amounted to RUB 436.2 bn. In the first quarter of 2018 VEB received a subsidy from the federal budget in the amount of RUB 95.6 bn, out of the budgeted RUB 100.0 bn for 2018, as a compensation of costs related to servicing foreign capital market borrowings. The equity decrease was affected by the new IFRS 9 introduction in the amount of RUB 31.2 bn, as well as the financial result of the first quarter.
- VEB’s capital adequacy ratio (according to RAS) as at March 31, 2018 amounted to 13.1%.
Vnesheconombank to continue improving the regulatory framework for syndicated loans
Vnesheconombank's Legal Directorate took part in the 8th St. Petersburg International Legal Forum.
The Bank organized the session “Vnesheconombank’s role in transforming Russian economy: changes in regulation, the project financing factory, syndication, high technology and export projects” to encourage public discussion of the new federal laws approved by the President at the end of 2017 creating the regulatory framework for Vnesheconombank’s implementation of its new Strategy 2021 and unlocking the potential of syndicated loans. The session was moderated by Mikhail Rasstrigin, Deputy Economic Development Minister.
Vnesheconombank’s Senior Vice President and Head of Legal Directorate Igor Krasnov told about changes made to the Law “On Bank for Development”. “The amendments introduced to the Federal Law “On Bank for Development” allowed us to substantially revise the options available to Vnesheconombank for investing in Russian economy and to launch the Bank’s new business model while addressing the existing issues. Moreover, the new legislation sets in law tools which can be used by Vnesheconombank to provide comprehensive financial and guarantee support for projects and transactions aimed at expanding supplies of high-tech products to foreign markets. The amendments are not just some minor changes. In effect, they form a new version of the law. This will allow Vnesheconombank to focus on its investment priorities and use new forms of project finance. The new law establishes a uniform risk management system in VEB Group and determines the development strategies of the bank’s core subsidiaries. Importantly, the law provides for a number of new tools such as syndicated lending, mezzanine financing, partner financing and investment consulting. Thanks to this measures, Vnesheconombank will be able to efficiently deliver its development strategy 2021 and to become a leader in long-term financing for Russia’s most important economic development projects,” said Igor Krasnov.
“Vnesheconombank has already been playing an important role in realising the potential of syndicated lending. Vnesheconombank took an active part in developing the federal law on syndicated loans that took effect in February 2018. The need for a legislative framework for syndicated loans was seen both by the banking community and government authorities,” said Roman Fomin, Senior Managing Director of Legal Support Department, Vnesheconombank’s Legal Directorate. “The law, inter alia, establishes the syndicated loan concept and expands the composition of participants on the primary syndicated loans market.”