VEB.RF published its interim condensed consolidated financial statements prepared in accordance with IFRS as at 31 March 2021.
“We are pleased to report a net profit of RUB 22.7 bn for the VEB.RF Group for the first quarter of 2021 in accordance with IFRS. At the end of the first three months we observe the growth in the loan portfolio, net interest income and fee and commission income.
Support for business during the pandemics remains high on our agenda. Guarantees issued by VEB.RF against interest-free and low-interest loans for commercial banks enabled companies to retain jobs and resume operations. We can see the results of our efforts. We note the general trend for improved performance of our borrowers.
With support from the Russian Government, VEB.RF is vigorously building up its new portfolio of high-quality projects in infrastructure, industry, exports and urban development. Liquidity and capital adequacy ratios allow VEB.RF to be actively involved in priority business areas,” VEB.RF Chief Financial Officer Andrey Moskovskikh said.
Key financial results of the VEB.RF Group in Q1 2021:
- In the first quarter of 2021, the VEB.RF Group made a profit of RUB 22.7 bn against a loss of RUB 22.5 bn as compared to the corresponding period of last year.
The positive financial result was driven by:
- net operating income of RUB 33.9 bn;
- reversal of allowance for expected credit losses of RUB 16.7 bn. In the corresponding period in 2020, the allowance for ECL was charged in the amount of RUB 10.5 bn;
- the decrease in non-interest expense from RUB 51.7 bn in Q1 2020 to RUB 26.0 bn;
- Operating income (net of allowances) was RUB 33.9 bn in Q1 2021, or RUB 9.2 bn less than in Q1 2020.
- The decrease in operating income was attributable to the decrease in non-interest income to RUB 13.0 bn against RUB 33.0 bn in Q1 2020. The dynamics is related, among other things, to the loss on initial recognition of guarantees issued in Q1 2021 on preferential terms as part of the new state COVID-19 rescue scheme.
- Net interest income grew to RUB 3.0 bn in the reporting period (Q1 2020: RUB 0.7 bn) largely as a result of the decrease in interest expense on amounts due to banks, the Government of the Russian Federation and the Bank of Russia due to reduced liabilities and interest expense on debt securities issued because of lower interest rates in debt markets.
- Net fee and commission income also went up from RUB 2.3 bn in Q1 2020 to RUB 9.2 bn in Q1 2021 due to the amortisation of loss on initial recognition of guarantees issued as part of the state anti-crisis programme.
- The VEB.RF Group’s assets decreased by 4.4% (–RUB 150.9 bn) against the beginning of the year to RUB 3,255.2 bn as at 31 March 2021. The amounts of reverse repurchase agreements with non-banking credit institutions for up to 90 days went down, brought about by the decrease in idle cash balances largely due to the increase in the loan and leasing portfolios and settlement of VEB.RF’s obligations as at 31 March 2021.
- As compared to the beginning of 2021, the loan portfolio (net of provision for impairment) increased by 5.8% (+RUB 67.4 bn) to RUB 1,236.5 bn. The leasing portfolio grew by 11.3% (+RUB 19.9 bn) to RUB 195.7 bn. In total, the loan and leasing portfolios account for 44.0% of the Group’s total assets.
- The loans granted by VEB.RF in Q1 2021 totalled RUB 89.6 bn. Investment priority sectors were industry, infrastructure and urban economy as well as export support.
- Allowance for expected credit losses was reversed in the amount of RUB 16.7 bn in Q1 2021. The allowance for financial guarantees was reversed in the total amount of RUB 8.8 bn largely due to the decrease in guarantees issued under the state support programme for business during the pandemics. The loan loss provision was reversed for RUB 4.4 bn.
- The Group’s liabilities decreased by 6.7% (–RUB 181.1 bn) in Q1 2021 to RUB 2,536.0 bn as at 31 March 2021. This dynamics was attributable to the decrease in amounts due to banks by 22.9% (–RUB 136.3 bn) and to the Government of the Russian Federation and the Bank of Russia by 5.5% (–RUB 34.0 bn).
- The Group’s equity went up by RUB 30.2 bn (+4.4%) in Q1 2021 to RUB 719.2 bn as at 31 March 2021. The equity growth was primarily driven by the profit in Q1 2021 and the increase in gains from investment financial assets at fair value through other comprehensive income. There were no changes in the authorised and additional paid-in capital.
- VEB.RF’s capital adequacy ratio in accordance with RAS was 17.0% as at 01 April 2021 (17.0% as at 01 January 2021).
Sber, VEB.RF, and RDIF have reached an equity investment agreement under which they will each hold a 25% stake in JSC Prosveshcheniye. The closure of the deal on RDIF’s part is pending approval from its Supervisory Board.
The deal is a continuation of many years of joint work to develop contemporary Russian education.
One hundred percent of the company’s shares were valued for the purposes of the deal at approximately RUB 108 bn. The new shareholder structure is expected to be established in June.
Eight directors will be on the Prosveshcheniye Board of Directors, with two representatives each from Sber, RDIF, VEB.RF, and the current Prosveshcheniye shareholders. The current management of the Group will continue to handle operations.
Today Prosveshcheniye, well known to all children and parents, is the largest brand on the educational literature market in Russia. The company operates in all regions of Russia and in 190 countries worldwide, with annual print runs of over 130 million copies. Prosveshcheniye also provides direct support to educators and school students. The company’s digital platforms count 30 million unique users per month.
The parties joined efforts to increase access to Prosveshcheniye’s well-established learning content for teachers, students, and parents nationwide. The partners’ modern digital technologies, services, and competencies will facilitate the development of next-generation educational content and ensure a personalized approach to each student and new education management tools for teachers.
The partnership will also establish the necessary conditions to increase the export potential of educational products and to develop school infrastructure, including through a PPP-based model.
We understand that access to quality educational content and to modern teaching methods for every child and every teacher lays the foundation for a successful future. Combining our ecosystem’s resources together with those of our partner companies and Prosveshcheniye creates new opportunities for the sector-wide development of education and for the achievement of national development goals.
CEO, Chairman of the Executive Board, Sberbank
The goal of our partnership is to develop a modern learning environment in Russia. Prosveshcheniye went from an educational publishing house to a systemically important company in the industry, providing its clients with a wide variety of solutions: from building new schools to the creation of digital content. The new shareholder composition will enable the company to grow dynamically, contribute to the achievement of national goals, and, in time, become a global education leader.
This agreement sees the partners joining efforts to develop the basis for Russia’s future achievements and the country’s most valuable asset – human capital. A strong company that plays a key role in the education infrastructure and builds on the best Russian and international practices can take the lead in this area globally. The collaborative work of RDIF and its partners is centered on achieving these goals for all students and teachers and for Russia as a whole.
CEO, Russian Direct Investment Fund (RDIF)
The public-private partnership tool has demonstrated that the business sector can become – and is becoming – a serious source of support for the state. Prosveshcheniye Group is a key element of the education system, as well as a national educational integrator, whose products and solutions are used in every single family and school in the country. Today we are talking about pooling our resources to handle the full range of challenges currently facing the state: creating modern education infrastructure, improving quality of education in all of Russia’s regions, developing and using digital educational technologies reasonably and efficiently, and formulating new tasks. We firmly believe that the effects of this deal will be seen throughout the country in the very near future.
Chairman of the Board of Directors, Prosveshcheniye Group
Sber Press office
PJSC Sberbank is Russia’s largest bank and a leading global financial institution. Holding almost one-third of aggregate Russian banking sector assets, Sberbank is the key lender to the national economy and one of the biggest deposit takers in Russia. The Government of the Russian Federation represented by the Ministry of Finance of the Russian Federation is the principal shareholder of PJSC Sberbank owning 50% plus one voting share of the bank’s authorized capital, with the remaining 50% minus one voting share held by domestic and international investors. Sberbank has customers in 18 countries. The bank has a major distribution network in Russia with about 14,000 branches, while its international operations – subsidiary banks, branches, and chapters – include the UK, US, CIS, Central and Eastern Europe, India, China, and other countries. It holds general banking license No. 1481 dd. August 11, 2015, from the Bank of Russia. Official websites of the bank: www.sberbank.com (Sberbank Group website), www.sberbank.ru.
In 2020 Sberbank underwent a rebranding, offering financial and non-financial services of the bank and Sberbank Group to individual and corporate customers. Today, the Sber ecosystem is a raft of services for life and daily assistance in handling pressing everyday issues for individual customers and businesses. The Sber ecosystem website: www.sber.ru.
VEB.RF Press service
firstname.lastname@example.org, +7 (495) 721-94-90
VEB.RF is a state development corporation that implements national projects in partnership with commercial banks and private investors. The scope of its activities includes providing support for high-tech industry, non-resource exports, modernization of infrastructure, and urban agglomerations. VEB.RF Group’s capital amounts to RUB 689.0 bn, with assets of RUB 3,406.1 bn and a capital adequacy ratio of 17.1% (as of December 31, 2020).
RDIF Press service
email@example.com +7 (495) 644-34-14
Russian Direct Investment Fund (RDIF) is Russia's sovereign wealth fund established in 2011 to make equity co-investments, primarily in Russia, alongside reputable international financial and strategic investors. RDIF acts as a catalyst for direct investment in the Russian economy. RDIF has experience in the successful joint implementation of more than 80 projects with foreign partners totaling over RUB 2 tn and covering 95% of the regions of the Russian Federation. RDIF portfolio companies employ over 800,000 people and generate revenues equating to more than 6% of Russia’s GDP. RDIF has established joint strategic partnerships with leading international co-investors from over 18 countries that total over USD 40 bn. Further information can be found at rdif.ru
Prosveshcheniye Group Press service
firstname.lastname@example.org,+7 (495) 789-30-40
Prosveshcheniye is a national educational integrator with 90 years of history. The Group comprises leading educational literature brands. Its key areas of activity are digitizing and exporting education, building and outfitting schools and summer camps for children, training educators, educational and legal consulting, and textbook publishing. Products and solutions by Prosveshcheniye can be found being used by teachers in every school and every family in the country.