Short-Term Exchange-Traded Bonds Issued by VEB.RF

1 april 2019 года
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VEB.RF issued short-term bonds in additional placements to companies and corporations on 27 and 29 March 2019.

The Bank raised 0.7 billion roubles, including 0.4 billion roubles from bonds with a maturity of 14 days and a coupon of 7.60% p.a. and 0.3 billion roubles from bonds with a maturity of 28 days and a coupon of 7.59% p.a.

The par value of one bond is 1,000 roubles. The bonds were sold at 100% of their par value. The coupon is payable at maturity.

The arrangers of the bond issue are Gazprombank and Svyaz-Bank.

The bonds are on the Moscow Exchange’s Quotation List Level 1. The depository is National Settlement Depository.

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VEB published its consolidated financial statements for 2018 as prepared in accordance with IFRS.

29 march 2019 года
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VEB published its consolidated financial statements for 2018 as prepared in accordance with IFRS.

The VEB Group’s key performance indicators for 2018 are as follows:

  • The VEB’s Group assets for 2018 remained largely unchanged and as at 31.12.2018 amounted to RUB 3, 361.9 bn. The decrease against the beginning of the year was 0.4% (RUB-14.1 bn).
    • Loans to customers account for 46.5% of the Group’s total assets. As compared to 2017 year end loan portfolio less allowance for impairment declined by 12.5% (RUB -222.4 bn) reaching RUB 1,561.6 bn. Major contributing factors to this decrease were assignment of certain loans to other lenders due to VEB’s fulfilment of its task of a development institution, reclassification of some loans at fair value through profit/ loss and corresponding negative revaluation of such loans.
    • The amount of loans granted by VEB in 2018 reached RUB 95.3 bn.
    • VEB’s key focus in 2018 was project finance tools elaboration. The new mechanism of project financing aims at investment growth in the real sector of the Russian economy as well as investors’ risks minimization. The main concept implies syndicated projects lending through commercial banks and other development institutions involving state subsidized rates and state guaranteed bonds. The model envisages VEB’s non-competition with commercial banks.     

      Legislative framework was laid in 2018, including Russian Government Resolution dated 15.02.2018 №158 on launch of a specialized project finance programme based on syndicated lending principles. State guarantee was received in accordance with Russian Government Resolution dated 06.06.2018 № 654.

      First pilot deals in spheres corresponding to the major areas of VEB’s activity   were approved and countersigned. These included a project of sulphuric acid production facility construction at the site of Kuibyshevazot and a project of Phase 3 methanol production facility construction at Shchekinoazot site, in Tula region.

      The investment portfolio will address national projects (programmes) implementation, as stipulated by the Russian President Executive Order dated 07.05.2018 № 204 “On National Goals and Strategic Objectives of the Russian Federation Through 2024”.

      VEB Supervisory board approved another project in March 2019 – construction of Stage 1 of the mining and metallurgical plant at the Udokan copper deposit. The deal became third and largest to date under this project finance programme.

    • In the reporting period net investment in leases went up by 16.6% (RUB +28.7 bn) to reach RUB 201.8 bn.
  • Total liabilities of the Group as at 31.12.2018 changed insignificantly reaching RUB 3,077.8 bn, increasing by 3.3% (RUB +97.5 bn). It is largely attributable to the increase in amounts due to the Russian Government and the Bank of Russia by 10.9% (RUB +58.2 bn) and rise in the book value of subordinated deposits by 48.4% (RUB +46.3 bn) due to the conversion of NWF foreign currency-denominated deposits to rubles. Additionally under the 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 52.5% of total liabilities (as at 2017 year end this share was 55.2%). In 2018 the share of amounts due to OECD-banks and Eurobond investors in total amounts due to banks and investors in debt securities declined from 32.9% to 26.7%, the amount of the said liabilities decreased by RUB 110.9 bn, inter alia due to the redemption of Eurobond issue for the nominal value of EUR 1.0 bn in February 2018 and redemption of Eurobond issue for the nominal value of USD 850.0 mn in November 2018.
  • The financial result of 2018 was RUB -175.8 bn, with a positive trend of loss decrease by 38.9% against the result of 2017. The major factor contributing to the 2018 result was revaluation of loans to customers at fair value, as well as a recognition of non-interest expense from NWF foreign currency-denominated deposits conversion to rubles.
  • In 2018 the Group’s equity went down by RUB 111.6 bn (-28.2%) to reach RUB 284.1 bn as at 31.12.2018.
    • Equity decrease was largely driven by the 2018 financial result, transition to IFRS 9 and result on investment financial assets at fair value through other comprehensive income, and foreign currency conversion in the total amount of RUB 71.9 bn.
    • This negative impact was partly offset by the state support measures. In 2018 VEB received federal budget subsidies for a total amount of RUB 136,1 bn, RUB 125.5 bn of which as compensation of costs related to servicing foreign capital market borrowings.
    • VEB’s capital adequacy ratio as at 01.01.2019 was 11.8% (RAS), (10,8% as at 01.01.2018).
  • In 2018 for the first time state support measures were codified in law in order to maintain or amend VEB’s authorized capital structure.  
    • Federal law dated 28.11.2018 № 452-FZ “On Amendments to the Federal Law On the Bank for Development and Certain Legislative Acts of the Russian Federation” provides for the procedure of callable capital allocation to VEB.RF. Under Russian Government Resolution dated 21.12.2018 № 1611 VEB’s authorized capital is to be built inter alia through further asset contributions from the Russian Federation in the amount of RUB 300 bn.
  • VEB.RF’s strategic role of a development institution and state support measures are confirmed by the leading international rating agencies that assigned VEB with credit ratings at the level of the Russian Federation sovereign rating, as well as by the national rating agency, ACRA, that assigned highest credit rating of AAA to VEB.


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