VEB published interim condensed consolidated financial statements of the VEB Group as at and for the nine-month period ended September 30, 2018, as prepared in accordance with IFRS.

“Today we have released the IFRS financial statements of the VEB Group for the nine months 2018 and we favourably view the results. We recognized a profit of RUB 6.0 bn in Q3 2018. In these nine months there was a reversal of provisions for expected loss in the amount of RUB 1.2 bn, which was also stipulated by the fact that VEB, having accomplished its function as a development institution, exited the projects upon investment stage completion.

   Currently the VEB team together with the Russian government is elaborating necessary conditions for the implementation of the VEB’s new unique role of a coordinator of development institutions activities. VEB’s financial model is being improved now, various financing and guarantee support mechanisms of other development institutions are enabled.   

With regard to its lending activity, VEB aims to more actively cooperate with commercial financial institutions, providing beneficial environment for co-financing. This will help boost financing of projects, crucial for the Russian economy, and create a multiplier effect for the funds invested by VEB.

The rendered state support, including callable capital mechanism will allow to realize the potential of a development institution and efficiently use the available resources, said Mikhail Poluboyarinov, First Deputy Chairman and Member of the Management Board.

The VEB Group’s key performance indicators are as follows:

• The VEB’s Group assets as at September 30, 2018 amounted to RUB 3,385.2 bn. The amount and structure of the assets remained largely unchanged as compared to 2017 year end (+0.3%).
• Loans to customers account for 52.2% of the Group’s total assets. As compared to 2017 year end loan portfolio after allowance for expected credit loss decreased slightly by RUB 16.9 bn (-0.9%) reaching RUB 1,767.1 bn. Major contributing factors were assignment of certain loans to other lenders due to VEB’s fulfilment of its task of a development institution, as well as negative revaluation of loans to customers at fair value.
• The amount of loans granted by VEB in the nine-month period 2018 reached RUB 62.2 bn.
• In the reporting period net investment in leases went up by 14.2% to reach RUB 197.6 bn.
• Total liabilities of the Group as at September 30, 2018 increased by 1.9% (RUB +55.5 bn) as compared to 2017 year end, reaching RUB 3,035.8 bn. Liabilities structure remained unchanged.
• The amount of debt securities issued went down in the nine-month period 2018 by RUB 39.1 bn (-3.6%) due to the redemption in February 2018 of Eurobond issue for the nominal value of EUR 1.0 bn. Also in November 2018 VEB timely redeemed its Eurobond issue for the nominal value of USD 850.0 mn, which is reported in the statements as a subsequent event.
• There is a positive dynamics of the financial result. In Q3 2018 the Group recognized a profit of RUB 6 bn, as compared to the negative financial result of RUB 61.9 bn in Q3 2017. At 9M end a loss shrank by 36.4% as compared to the corresponding period of 2017 and amounted to RUB 69,6 bn. The major factor contributing to the negative result was a recognition of non-interest expense from NWF foreign currency-denominated deposits conversion to rubles, as well as revaluation of loans to customers at fair value at transition to IFRS 9.
• The Group’s equity in the nine months 2018 decreased by RUB 46.3 bn (-11.7%) to reach RUB 349.4 bn as at September 30, 2018. It was negatively affected by the 9M 2018 financial result and IFRS 9 introduction (RUB -31.2bn).     
• The said impact was partly offset by the state support measures. In the reporting period VEB received two federal budget subsidies in the amount of RUB 100.0 bn, as a compensation of costs related to servicing foreign capital market borrowings.
• VEB’s capital adequacy ratio as at September 30, 2018 was 12.1% (RAS).