May 2012 Belagroprombanks Overview Universal commercial bank Key - - PowerPoint PPT Presentation

May 2012

 Universal commercial bank  99% state-owned bank  Government Agent on servicing State Programs  #9 among 25 largest banks of CEE by equity (July 2011)  Leading positions in banking sector of Belarus: – #1 by corporate loan portfolio in national currency – #2 by authorized fund and equity – #2 by total assets and retail deposits  7 regional branches, 57 local branches and 217 outlets*  More than 42 000 corporate and 1.4 mln retail clients  Credit ratings : – S&P – В- (at the sovereign level) – Moody’s – Caa1 (1 notch lower than the sovereign level)  Deep expertise of the agricultural sector  The only Belarus corporate issuer

• n the international debt capital market

 The agricultural sector has been announced as the “growing point”

• f the economy in Belarus

 Belarus ranks №1 among CIS countries in terms

• f vegetables, meat and milk

production per capita

Key financials, BYR bn 2011 Assets 45,550 Equity 10,052 Loans to customers 33,415 Customer accounts 17,651 Net interest income** 2,533 Profit before loss on net monetary position 1,378 Tier 1 capital adequacy ratio, % 25.8

Belagroprombank‟s Overview

2

* As of 01.05.2012 ** Before allowance for impairment and effect of initial recognition

Source: Consolidated Financial Statements in accordance with IFRS as of 31.12.2011

100% 107% 106% 116% 121% 127% 133%

100%111%121% 134%130% 146%154%

2005 2006 2007 2008 2009 2010 2011

Agricultural Output Indices 2005 = 100% Industrial Production Indices 2005 = 100%

Ratings On April, 18th, Belarus’s credit rating outlook was raised to stable from negative by S&P

Rating Agency Rating S&P B- Moody’s B3

Real GDP Growth in 2011 vs. European countries 2011 GDP Structure Agricultural & Industrial Production Indices

Republic of Belarus

Sources: National Bank of Belarus, National Statistical Committee of Belarus Data as of 01.01.2012

3 USD 55.1 bn

Other 15% Agriculture, Hunting, Forestry & Fishing 9% Financial Intermediation, Real Estate,

• etc. 10%

Manufacturing 30% Construction 13% Transport & Communi- cations 10% Wholesale & Retail Trade 13%

Assets Retail deposits Equity Corporate Loan Portfolio

Source: National Bank of the Republic of Belarus Data as of 01.05.2012

4

Belagroprombank‟s market positions

Belagroprombank Belarusbank BPS-Sberbank Bank “BelVEB” Belinvestbank Priorbank

Others

21%

48% 4% 4% 4% 5% 14%

30%

31% 11% 5% 7% 5% 11%

20%

39% 10% 5% 6% 4% 16%

15%

46% 10% 3% 8% 6% 12%

1991–1996

03.09.1991 JSC Belagroprombank was created on the basis of Belarussian branch of Agrobank

• f USSR

1992 – the Bank

• btained general

license to perform banking activities in foreign currency 1994 – the Bank became a member of SWIFT international settlement system 1996 – the Bank

• btained the status
• f the Government

Agent on serving state programs

• n financing

agricultural sector

• f the economy

JSC Belagroprombank joined Reuters system 2002 – JSC Belagroprombank was awarded with the title “The Bank of the Year 2002” by The Banker magazine 2004 – for the first time the Bank’s financial statements were prepared in accordance with IFRS and audited by Deloitte and Touche Long-term rating of the Bank was assigned at CCC+ by Fitch Ratings 2005 – the Bank joined Visa International payment system 2006 – Fitch Ratings upgraded the Bank’s rating to B- The Bank tapped international debt capital markets, the total volume

• f borrowings reached

USD 340 mln by the end

• f the year

2007 – Global Finance named JSC Belagro- prombank The Best Bank in Belarus The Bank opened its representative office in Milan, Italy Euromoney magazine awarded the Bank with Award for Excellence The Bank became a member of CICA (International Association of Agricultural Credit) 2008 – Moody’s assigned rating for the Bank for the first time For the second time Global Finance named JSC Belagroprombank The Best Bank in Belarus Financing provided by foreign financial institutions totaled to USD 1 bn. 2009 – The Bank in cooperation with Italian company Agrotecnica s.r.l. held conference devoted to the issues

• f the development of agroecotourism

in Belarus 2010 – the meeting of the Central Committee of CICA was held under the auspices of JSC Belagroprombank The Bank was awarded with “EUR Straight-Trough Processing (STP) Excellence Award” by Deutsche Bank for the exceptional quality of payment messages The Bank joined MasterCard Worldwide payment system Belagroprombank was the first Belarusian bank to implement quality management system ISO 9001 2011 – The Bank has improved its positions in The Banker’s Top 1000 World Banks. It ranked 325 among 1000 world’s largest banks in terms

• f tier 1 capital having moved from

403rd place a year earlier Deutsche Bank awarded Belagroprombank with “EUR STP Excellence Award” for the second time 5

History and Development

1997–2006 2007–2008 2009–2011

GENERAL SHAREHOLDERS‟ MEETING MANAGEMENT BOARD

FINANCE COMMITTEE CREDIT COMMITTEE OTHER COMMITTEES (BUDGET, IT)

SUPERVISORY BOARD

Includes Deputy Prime Minister Includes Independent Members 6

Governance Structure

 Headquartered in Minsk  Implementation of regional network optimisation strategy – low-profit branches are re-organised into outlets (i.e. less staff, limited operations) Belagroprombank‟s Branch Network as of 01.05.2012 Belagroprombank‟s subsidiaries

Vitebsk Mogilev Gomel

Minsk

Grodno Brest

The Bank is a parent company of a Group which consists of the following enterprises consolidated in the financial statements

Name The Bank‟s Share, % Type of

• peration

1 PUE “Ozeritskiy-Agro” 100 Agriculture 2 JSC “Agroleasing” 66.7 Finance leasing 3 PE “Agrobusinessconsult” 100 Consulting 4 OJSC “Turovschina” 95.03 Agriculture

7

Belagroprombank‟ Group and its Branch Network

7

Regional Branches

57

Local Branches

217Outlets

The Development Program of Belagroprombank for 2011-2015

8

Strategy

Pursuing client-oriented policy both in retail and corporate business

1

Active developing of international cooperation

2

Goal-directed adopting of modern technologies

3

Securing safe performance

4

Promoting economic effectiveness

5

Risks

Credit Risk

Legal entities Individuals Banks

Market Risk

Currency Risk Interest Risk Stock Risk

Operational Risk

Technical & Technological Risks Accounting Risk Risk of Operation Operational Activity Risk Legal Risk Other Risks Organizational Structure Risk

Other Risks

Liquidity Risk Strategic Risk Country Risk Interest Rate Risk Reputation Risk

9

Risk-Management

Сommodity Risk

Corporate banking Retail banking International operations  More than 42,000 clients (as of 01.04.2012)  The clients are the large and medium-sized entities in the agricultural sector and manufacturing companies  Total corporate loan portfolio of over USD 4 bn.  State lending programs for the agricultural sector  Wide range of services includes: – Lending, Leasing, Factoring operations – Support of trade

• perations

– Advisory services  More than 1.4 mln. clients (as of 01.04.2012)  Area of strategic importance and development for the Bank  Total retail loan portfolio

• f more than USD 190 mln.

 Product offering includes: – Multi-currency deposits – Money transfers – Foreign currency exchange – Plastic cards (BelCart, Visa, Maestro, MasterCard) – Payments services – SMS-banking – Internet-banking – Consumer lending, car lending, mortgages – Selling of gold, platinum and silver bullions  Top-priorities of the Bank: – Increase the scale of business via raising funds from international markets – Involve international markets to diversify liabilities structure  More than USD 3.45 bn. raised since 2005 by means of forfaiting, trade finance, capital markets transactions, etc.  Cooperation with more than 100 financial institutions from 30 countries  Recognition by 17 ECAs (SACE, Hermes, KUKE, EKF, OeKB and others)  More than USD 1 bn.

• f unsecured short-term lines

 Representative Office in Milan, Italy

10

Business Overview

Data as of 31.12.2011 (IFRS audited figures)

Total assets Assets structure, %  Major part of assets formed by loans to clients (mostly to corporates)  100% of the loan portfolio is secured

2.7 4.6 8.1 15.2 19.3 28.3 45.6 1.2 2.2 3.7 6.9 6.7 9.4 5.5 2005 2006 2007 2008 2009 2010 2011 BYR trn USD bn

Data as of 31.12.2011 (IFRS audited figures)

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Аssets

Loans to customers 73% Investment in securities available for sale 5% Cash and balances with the National Bank of the Republic of Belarus 6% Fixed assets 4% Derivative financial instruments 9% Other assets 3%

Sector breakdown

 The risk of high industry concentration within agricultural sector is mitigated by variety

• f specialization of these entities

 Conservative credit policy on the back

• f stable low NPL level

Loans structure by collateral NPL

„06 „07 „08 „09 „10 „11 ‟12 (as of 01.05) Share of NPL in total loans, % 1.1 0.3 0.2 1.0 0.3 0.2 0.6 Provisions against losses/Total loans, % 2.3 2.5 1.9 2.1 3.5 5.4 5.7 12

Loan Portfolio Breakdown

Data as of 31.12.2011 (IFRS audited figures)

 In 2011 Belarusian Development Bank was founded for the purpose of state programmes’ financing  Belagroprombank has started to transfer assets under Government programs to Belarusian Development

• Bank. In 2011 loans in the amount of BYR 1.5 trn

( 5% of total loan portfolio) were transferred

Construction 1% Other 7% Agriculture 43% Manufacturing 31% Trade 13% Individuals 5% Cash 2% Property & inventory 23% Guarantees of the government & local authorities 45% Other 7% Real estate 10% Lien over property & receivables 13%

Structure of liabilities, % Growth of share capital Capital adequacy ratio

 At the end of 2011, the Authorized Fund of JSC Belagroprombank was increased by BYR 1.6 trn (USD 191.4 mln.)  The capital/assets ratio provides significant capability to cover unforeseen loan losses in addition to existing reserves  Capital adequacy rates of JSC “Belagroprombank” conform to Basel standards and meet all requirements of the National Bank

• f the Republic of Belarus

1.0 1.0 2.4 4.4 4.4 5.6 17.1 0.5 0.5 1.1 2.0 1.5 1.9 2.1 2005 2006 2007 2008 2009 2010 2011 BYR trn USD bn

Data as of 31.12.2011 (IFRS audited figures)

2008 2009 2010 2011 Tier 1 capital adequacy ratio, % 31,8 26,9 24,2 25,8

Basel Committee’s on Banking Supervision requirement to tier 1 capital adequacy ratio: no less than 4 %

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Capital and Sources of Funding

Other 2% Due to National Bank

• f the Republic of

Belarus 1% Due to banks 25% Debt securities issued 22% Customer accounts 50%

0.3 0.4 0.6 1.0 2.0 2.7 8.6 0.2 0.2 0.4 0.8 1.5 1.7 6.0 3 5 8 10 2005 2006 2007 2008 2009 2010 2011 Interest income Interest expenses Net interest income

Interest Income and Expenses Dynamics, BYR trn

0.2 0.3 0.3 0.4 0.6 1.1 3.3 0.2 0.2 0.3 0.3 0.4 0.6 1.4 1 2 3 4 2005 2006 2007 2008 2009 2010 2011 Operating income Operating expenses Profit before income tax

Operating Income and Expenses, BYR trn Operating Expenses Breakdown Operating Income Breakdown

BYR 3.3 trn

Income and Expenses

14

* After allowance for impairment and effect of initial recognition

Data as of 31.12.2011 (IFRS audited figures)

Other non-interest income 24% Net interest income* 57% Net fee & commission income 19% Other 30% Personnel 38% Contributions to The Agency of Deposit Compensation 5% Rent & maintenance 5% Depreciation 10% Social security contributions 12% BYR 1.4 trn

According to magazine “The Banker”

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Belagroprombank‟s position in the world

№ 325

Top 1000 World Banks

№ 9

Top 25: Central & Eastern Europe

among 25 largest banks of Central and Eastern Europe

№ 1

Top 1000 by Country

among Belarusian banks

JSC “Belagroprombank” Ranking by Equity (July 2011)

ECA-covered business

 Belagroprombank has been accepted by a number

• f ECAs for participation in co-financing
• f applicable transactions

 The average term of such transactions is between 3 and 5 years

Trade Finance

 Belagroprombank has obtained credit lines from 76 banks from 25 countries of the world for the purposes of trade finance operations with maturity up to 1 year  As of 1 May 2012 the Bank had more than USD 1 bn. of unsecured credit lines

159 273 350 508 895 1 030 1 003 2006 2007 2008 2009 2010 2011 2012 as at 01.05 16

International Cooperation

Credit lines, USD mln

17

International Funding Track Record

Syndicated Loans

Syndicated loan EUR 30 mln 1 year + 1 MLA JSC VTB Bank & VTB Bank Europe plc August 2006 Syndicated loan RUB 1 bn 1 year MLA JSC VTB Bank June 2007 Syndicated loan USD 40 mln 1 year + 1 MLA Commerzbank AG Banco Finantia SA UniCredit Group February 2008 Syndicated loan USD 55 mln 1 year + 1 MLA Banco Finantia SA Credit Suisse Intesa SanPaolo September 2008

 Intesa SanPaolo SpA, one of the leading Italian banks, first enjoys MLA title in Belarus  More than 100% oversubscription  This Loan was redeemed in due time  The first and the only deal effected in the Belarusian banking sector in 2009  Belagroprombank was among very few CIS financial institutions to raise syndicated loan under challenging market environment  The Facility is of club style  In November 2010 Belagroprombank fully and in a timely manner redeemed the Loan  The first deal in Belarus in 2008 in challenging market conditions  100% oversubscription  For the first time in Belarus the leading Italian banking group UniCredit acted as MLA  This Loan was redeemed in full in due time  In June 2007 Belagroprombank raised a Russian Rouble syndicated facility – the first of its kind for Belarusian banks  Named “Deal of the Year” by Trade & Forfaiting Review Magazine  In June 2008 Belagroprombank has successfully redeemed the syndicated facility

Syndicated loan USD 43.5 mln 1 year November 2009

 In 2006 Belagroprombank launched the debut syndication  The syndicated loan was oversubscribed to EUR 30 mln from EUR 15 mln.  In August 2007 the Syndicated Loan was extended. Margin was reduced from 400 bps to 345 bps

Notes issue

Note issue (LPN)

USD 100 mln

3 years MLA “Investment Company “Troika Dialog” & The Royal Bank

• f Scotland plc

November 2010

 In November 2010 Belagroprombank completed placement

• f its USD 100 mln. three-year issue

 The issue was priced at par with a coupon of 9.95% p.a. and listed

• n the Frankfurt Stock Exchange

 On May 2, 2012 Belagroprombank repaid the third coupon on the issue in the amount of USD 5.030 mln.  Belagroprombank became the first bank in Belarus to price internationally distributed notes

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International Funding Track Record

Note issue (LRN)

EUR 70 mln

1 year MLA VTB Bank Europe plc & Banco Finantia SA December 2006

 In December 2006 Belagroprombank was the first Belarusian bank to raise funds via notes issuance  In December 2007 Belagroprombank has successfully redeemed its debut EUR 70 mln LRN issue

19

Awards and Successes

“Bank of the Year 2002” in Belarus “Best Bank in Belarus 2007” “Award for Excellence 2007” Gold medal in National Competition “Brand of the year 2006” Gold medal in National Competition “Brand of the year 2007” “Best Bank in Belarus 2008” “Deal of the year 2007” “Brand of the year 2009” “For exceptional quality

• f payment

messages, 2009, 2010”

Deal

• f the year

2007

Syndicated Loan RUB 1 bn “Deal of the Year” in 2009

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Contacts

• Ms. Tatyana L. KULESHOVA

International Business Department Head of Debt Capital Markets Tel.: + 375 17 229 62 09 Fax: + 375 17 229 62 31 e-mail: t.kuleshova@belapb.by

• Ms. Natalya P. KONUSEVICH

Head of International Business Department Tel.: + 375 17 229 62 08 Fax: + 375 17 229 62 34 e-mail: n.konusevich@belapb.by

• Ms. Marina V. BURGUTO

International Business Department Head of Financial Institutions Tel.: + 375 17 229 62 13 Fax: + 375 17 229 62 51 e-mail: m.burguto@belapb.by

• Mr. Siarhei P. CHUHAI

Deputy Chairman of the Board Tel.: + 375 17 229 62 07 Mob.: +375 29 150 68 05 Fax: + 375 17 229 62 75 e-mail: s.chuhai@belapb.by