REPUBLIC OF SERBIA Ministry of Finance I NVESTOR P RESENTATION J - - PowerPoint PPT Presentation

Ministry of Finance

INVESTOR PRESENTATION JANUARY 2017

REPUBLIC OF SERBIA

• 1. Republic of Serbia – Overview
• 4. Fiscal Policy and Debt Management Strategy
• 3. Banking Sector
• 2. Macroeconomic Background

Serbia at a Glance

Key Facts

Resilient economy on the path to full integration with Europe



Form of Government: Parliamentary Republic



Territory: 88,361 sq. km



Capital: Belgrade



Population: 7.2 million(1,2)



GDP per capita: EUR 4,778(1,2)



Nominal GDP: EUR 34.1bn(1,2)



Credit ratings: BB-/BB-/B1



Currency: Serbian Dinar (RSD)



Current exchange rate: EUR/RSD = 123.4723 (3) USD/RSD = 117.1353 (3)

Vilnius

EU Non-EU

SERBIA

Nis Kragujevac Novi Sad

Belgrade

1 National Statistics Office, Minstry of finance as of 2016, 2 Excluding Kosovo and Metohija, 3 NBS as of 30 December 2016

Recent Milestones and Progress to EU accession

EU membership application Responses to the European Commission’s Questionnaire

2008 2006 2009 2011 2009 2011 2012

EU candidate status awarded EC agrees to start Serbia’s EU accession negotiations in January 2014

2013

3

Jan 2014

Serbia started EU accession negotiations

April 2014

Formation of new Government

Nov 2014

Serbia reached IMF agreement

Dec 2015

Serbia opened chapters 32 and 35 in the process

• f EU accession

July 2016

Serbia opened chapters 23 and 24 in the process of EU accession

Aug 2016

Formation of new Government

Dec 2016

Serbia opened chapters 5 and 25 in the process of EU accession

Dec-16 Dec-15 Change Dec-16 Dec-15 Change Dec-16 Serbia BB- BB- No Change BB- B+ B1 Bulgaria BB+ BB+ no change BBB- BBB- no change Baa2 Croatia BB BB no change BB BB no change Ba2 Hungary BBB- BB+ BBB- BB+ Baa3 Romania BBB- BBB- no change BBB- BBB- no change Baa3 Latvia A- A- no change A- A- no change A3 Lithuania A- A- no change A- A- no change A3

Serbia’s Rating In Comparative Perspective

Credit Rating History

 Standard and Poor's – In December 2016, the S&P affirmed Serbia’s credit rating at BB-, while outlook revised to positive from stable. Main factors which contributed to revision are Serbia`s improved fiscal performance and the prospects for further gains. The improved result comes from better collections of VAT and excise taxes revenues and higher non-tax revenues. This credit rating agency emphasizes improvement of Serbia`s CAD, and it is expected that the FDI net inflows will fully finance the CAD. The Serbian economy saw a continued recovery throughout 2016, with real GDP expected to grow by 2.7%.  Fitch Ratings – In December 2016, the Fitch ratings affirmed the Republic of Serbia credit rating at level 'BB-'. The outlook is stable. The affirmation of credit rating reflects the view that Serbia will continue to implement fiscal consolidation and structural reform program, as well as to continue EU accession negotiations and implement further the IMF reform program. The government of the Republic of Serbia continues resolving structural issues in conditions of economic growth based mainly on investments, public enterprises restructuring and FDI attraction. Fitch Ratings also emphasizes that the Serbia`s CAD has been fully covered by FDI inflows since 2015, leading to a gradual decline in net external debt.  Moody's – In March 2016, Moody’s Investor Service has changed Serbia’s credit rating outlook to positive from stable and affirmed Serbia’s credit rating at B1. Moody’s decision to raise Serbia’s credit rating outlook reflects primarily the successful implementation of the fiscal consolidation program and structural reforms, as well as enhancements to the quality of Serbia's institutions and improved economic growth prospects.

4

• 1. Republic of Serbia – Overview
• 4. Fiscal Policy and Debt Management Strategy
• 3. Banking Sector
• 2. Macroeconomic Background

Exports Have Been A Major Driver Of Economic Growth

Source: National Statistics Office, Ministry of Finance Source: Eurostat

Real GDP Growth (Y-o-Y) Real GDP Growth 2011 – 2016 (Y-o-Y)

• In 2015 the Republic of Serbia marked 0.8% growth, while estimated

growth for 2016 and 2017 is revised up to 2.7% and 3.0% respectively.

• In Q1 2016, GDP grew by 3.5% primarily on the basis of better

construction and industrial performance, while real economic growth in Q2 2016 was 2.0%. In Q3 2016, real GDP increased by 2.5% in comparison to the corresponding period of the previous year, while in Q4 increased by 2,5%.

• The GDP growth in 2016 was dominantly based on investments in fixed

assets 6.4% (Y-o-Y).

• In 2016 exports of goods increased by 11.5% compared to 2015, while

imports of goods increased by 6.1% (in EUR terms).

• Exports of motor vehicles in 2016 kept the leading 14.3% share followed

by processed food products with 11.1% share, electrical equipment 8.4% share and basic metals 7.6% share in total exports (in EUR terms).

• In 2016 the export-import ratio was on the level of 77.2%, while in 2015

was 73.5%.

Source: National Statistics Office, National Bank of Serbia

Exports of Goods – Nominal Growth (Y-o-Y)

6

• 3
• 2
• 1

1 2 3 4 5 2012 2013 2014 2015 Q3 2016* Serbia Romania Bulgaria Croatia Hungary *Preliminary Data 33,4 31,7 34,3 33,3 33,5 34,1 1,4%

• 1,0%

2,6%

• 1,8%

0,7% 2,7%

• 3%
• 2%
• 1%

0% 1% 2% 3% 4% 30 31 31 32 32 33 33 34 34 35 35 2011 2012 2013 2014 2015 2016 GDP, EUR bn GDP growth rate 3,8% 26,0% 1,4% 7,8% 11,5% 0% 5% 10% 15% 20% 25% 30% 2012 2013 2014 2015 2016

External Position

Exchange Rate USD/RSD (Dec 2015 – Dec 2016) Exchange rate EUR/RSD (Dec 2015 – Dec 2016)

Source: National Bank of Serbia Source: National Bank of Serbia Source: National Bank of Serbia

• At the end of December 2016 Serbia had a level of FX reserves at

EUR 10.2bn (about 6 months of imports coverage) and net reserves at EUR 8.4bn which provide a good cushion for the Serbian external position

• At the end of September 2016 external debt stood at EUR 25.3bn,

including private sector external debt of EUR 10.4bn

• During 2015 and 2016 EUR/RSD exchange rate showed limited
• volatility. In 2015 and 2016 the average exchange rate EUR/RSD was

120.7 and 123.1 respectively

Foreign Exchange Reserves (mln EUR)

7 116,0 117,0 118,0 119,0 120,0 121,0 122,0 123,0 124,0 125,0 95,0 100,0 105,0 110,0 115,0 120,0 125,0 10,9 11,2 9,9 10,4 10,2 9,0 9,5 10,0 10,5 11,0 11,5 2012 2013 2014 2015 Dec-16

Trade Balance

Balance of Payments (% of GDP)

Source: National Statistics Office, National Bank of Serbia Source: National Statistics Office

Trade Deficit (% of GDP)

Source: National Statistics Office, National Bank of Serbia

External Trade as (% of GDP)

• Current account deficit in 2015 reached historical minimum level of

4.8% of GDP, while estimated CAD in 2016 was planned at level of 4.2% of GDP

• In the first eleven months of 2016, CAD was about 17.5% less

compared to the same period last year mainly due to strong growth of exports of goods and services

• The significant growth rates in 2016 were recorded in tobacco

products (+48%), electrical equipment (+32%), chemical products (+22%) and computer and electronic products (+20%) comparing to last year

8 27,6% 32,1% 33,6% 36,6% 39,4% 46,5% 45,1% 46,8% 49,8% 51,0% 0% 10% 20% 30% 40% 50% 60% 2012 2013 2014 2015 2016 Export Import 5,9 4,5 4,3 4,4 4,0 18,8% 13,0% 13,0% 13,3% 11,6% 5,0% 7,0% 9,0% 11,0% 13,0% 15,0% 17,0% 19,0% 21,0% 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 2012 2013 2014 2015 2016 Trade deficit (EUR bn) Trade deficit (% of GDP)

• 6,1%
• 6,0%
• 4,8%
• 4,0%

2,2% 1,4%

• 1,8%

3,8% 3,7% 5,5% 5,2%

• 8,0%
• 6,0%
• 4,0%
• 2,0%

0,0% 2,0% 4,0% 6,0% 8,0% 2013 2014 2015 2016 Net FDI Financial Account ex. FDI Current Account

Serbia’s Exports and Imports in 2016

Import of Goods Import of Goods Export of Goods

Source: National Statistics Office Source: National Statistics Office

Export of Goods

Source: National Statistics Office Source: National Statistics Office 9 66% 7% 17% 10% EU CIS MEDA Other 63% 10% 7% 20% EU CIS MEDA Other 16% 13% 8% 5% 5% 5% 48% Italy Germany Bosnia and Herzegovina Romania Russian Federation Montenegro Others 10% 13% 8% 8% 5% 4% 52% Italy Germany Russian Federation China Hungary Poland Others

…And By Types Of Products

Source: National Statistics Office

Export 2016 (FOB) Import 2016 (CIF)

Source: National Statistics Office

External Trade as % GDP

• Serbia’s exports are reasonably diversified, covering the full range of

products from intermediate inputs, to consumer and capital goods

• This confirms that Serbia is already being integrated into the

European trade system and is able to export goods to multinational companies operating in the global supply chain

• Intermediate and capital goods have been the fastest growing export

product categories in period 2011-2016, one of the positive results of the direct foreign investment that Serbia has attracted in recent years due to the Government of Serbia subsidy program

Source: National Statistics Office 10 27,6% 32,1% 33,6% 36,6% 39,4% 46,5% 45,1% 46,8% 49,8% 51,0% 0% 10% 20% 30% 40% 50% 60% 2012 2013 2014 2015 2016 Export Import 2% 35% 25% 5% 24% 9% Energy Intermediate goods Capital goods Durable consumer goods Non durable consumer goods Unclassified by MIG destination 9% 33% 22% 2% 14% 20% Energy Intermediate goods Capital goods Durable consumer goods Non durable consumer goods Unclassified by MIG destination

Foreign Direct Investments

Net FDI Diversification by Geography (2015) Net FDI Diversification by Sector* (2015) Net Foreign Direct Investment (EUR mln)

• NFDI’s in 2015 reached the level of above EUR 1.8bn and fully

covered CAD. The biggest FDIs were in manufacturing sector (rubber production, motor vehicles, food production), financial sector, construction, retail trade sector, telecommunication and IT sector

• In the first eleven months of 2016 NFDI’s were EUR 1.6bn, while

estimated level of NFDI’s in whole 2016 is revised up to EUR 1.8bn

• FDI projection for the coming years also envisages full coverage of

CAD

• Air Serbia improved performance of the Belgrade Airport Nikola

Tesla which became very attractive to potential investors

• Serbia improved the position on the World Bank’s Doing Business

List 2017 and ranked at the 47th position in comparison to previous 54th in 2016

Source: National Bank of Serbia Source: National Statistics Office; National Bank of Serbia Source: National Statistics Office, National Bank of Serbia *2012 data affected by Telekom Srbija’s buyback of its Treasury shares from OTE (EUR 380m) 11 20,1% 19,5% 9,4% 8,0% 6,7% 4,9% 4,8% 4,4% 4,0% 4,0% 0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 34,1% 9,9% 12,5% 5,1% 22,9% 3,2% 3,0% 9,3% Manufacturing Wholesale and retail trade Construction Information and communication Financial intermediation Transport and communication Agriculture Other 1.133 3.320 753 1.298 1.236 1.804 1.794 500 1000 1500 2000 2500 3000 3500 2010 2011 2012 2013 2014 2015 Nov-16

Inflation in the Target Band in the first half of 2017

Source: National Bank of Serbia Source: National Bank of Serbia Source: National Bank of Serbia

• Inflation has been moving below the target tolerance band since March

2014 mainly due to movements in food and oil prices

• According to the NBS estimate, y-o-y inflation is expected to rise

moderately and to enter the target tolerance band in the first half of 2017

• During 2015, the NBS gradually reduced its key policy rate (KPR) by

350 bps and at the end of December 2015 KPR was at the level of 4.50%, meanwhile in 2016 NBS reduced KPR for additional 50 bps to the level of 4.00% in July 2016

• NBS reduced inflation target to the level of 3.00%±1.50% (starting from

January 2017)

Y-o-Y Inflation eop Key Policy Rate and Money Supply Contribution of CPI Components to Y-o-Y Inflation (%)

12 7,0% 12,2% 2,2% 1,7% 1,5% 1,6% 0,0% 2,0% 4,0% 6,0% 8,0% 10,0% 12,0% 14,0% 2011 2012 2013 2014 2015 Dec-16

• 15,0%
• 10,0%
• 5,0%

0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 30,0% 0,0% 2,0% 4,0% 6,0% 8,0% 10,0% 12,0% 14,0% Key Policy Rate (left axis) M2 (YoY) (right axis)

• 4,000
• 1,000

2,000 5,000 8,000 11,000 14,000 Unprocessed Food Processed food Industrial goods excluding food and energy Energy Services

• 1. Republic of Serbia - Overview
• 4. Fiscal Policy and Debt Management Strategy
• 3. Banking Sector
• 2. Macroeconomic Background

Banking Sector Overview

Source: National Bank of Serbia *latest available comparable data Source: National Bank of Serbia

Asset Structure Liabilities and Capital Structure Consolidated Balance Sheet of the Banking Sector

14 Source: National Bank of Serbia Source: National Bank of Serbia *latest available comparable data 55% 16% 13% 8% 2% 6%

Loans and receivables from clients Financial assets available for sale Currency and deposits with the central bank Loans and receivables from banks and other financial organisations Fixed assets

9% 67% 1% 13% 6% 3% 1% Deposits to banks, OFO and the central bank Deposits to other customers Subordinated liabilities Share capital and other capital Reserves and unrealised losses Profit Other

Assets 2012 2013 2014 2015 Dec-16

• I. Foreign Assets

35,7% 36,2% 35,2% 34,1% 33,1% Of which NBS 31,4% 32,8% 28,9% 29,3% 27,8%

• II. Domestic credit

56,6% 56,0% 56,9% 58,1% 58,5%

• f which Government

7,3% 8,6% 10,9% 12,4% 14,0%

• f which Companies

28,1% 25,7% 23,2% 22,9% 22,1%

• f which Households

16,4% 17,1% 17,3% 17,5% 18,4% Others 4,8% 4,6% 5,5% 5,3% 4,0%

• III. Other Assets

7,8% 7,8% 7,8% 7,8% 8,4% Total Assets (EUR bn) 35 34,4 34,6 35,7 37,2 Liabilities 2012 2013 2014 2015 Dec-16

• I. Foreign Liabilities

18,8% 14,7% 10,5% 9,1% 7,8%

• II. Government depostis

4,9% 7,3% 8,0% 7,3% 6,6%

• III. Currency in circulation

2,8% 3,1% 3,1% 3,2% 3,5%

• IV. RSD deposits

9,3% 10,8% 11,6% 13,0% 14,2%

• V. FX deposits

29,2% 29,7% 29,9% 29,9% 30,4%

• VI. Other Liabilities

35,0% 34,4% 37,0% 37,5% 37,5% Total Liabilities (EUR bn) 35 34,4 34,6 35,7 37,2

A Strong Capital Cushion Offsets Relatively High NPLs

Source: National Bank of Serbia Source: National Bank of Serbia Source: National Bank of Serbia

Credit Growth Y-o-Y Capital Adequacy Ratio and NPL’s (%) Banking Sector Ownership by Assets (Q3, 2016)

15 18,6 21,4 21,5 21,6 19,5 19,9 20,9 20,0 20,9 21,2 17 17,5 18 18,5 19 19,5 20 20,5 21 21,5 22 2012 2013 2014 2015 Sep-16 NPL's CAR

• At the end of September 2016 CAR stands at high level of 21.2%,

mainly due to recapitalization, higher reserves from capital and lower capital requirements for credit risk

• NPLs are fully covered by balance sheet loan loss reserves. IFRS

provision (66.5% in October 2016) cover more than half of NPLs. Among others, NBS regulatory measures allow the sale of NPLs to non financial entities and better tax treatment on restructured debt

• The share of NPLs has a downward trend - at December 2016 it

stood at 17.03%, 4.5 pp lower compared to December 2015

• Liquidity ratio of the banking system is higher than the regulatory limit

(2.1 in November 2016) and liquid assets represent 36.0% of total assets at the end of November 2016

• The loan to deposit ratio for the banking sector remains on a

conservative low level 0.92 in November 2016

15,1% 26,6% 12,5% 10,1% 11,7% 23,9% Austria Italy Greece France Other foreign banks Domesticaly owned banks

• 15,0%
• 10,0%
• 5,0%

0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 30,0%

Loans to households Loans to enterprises Total loans

• 1. Republic of Serbia - Overview
• 4. Fiscal Policy and Debt Management Strategy
• 3. Banking Sector
• 2. Macroeconomic Background

Fiscal Policy Measures – New IMF Agreement

Fiscal consolidation measures and structural changes for 2017: – Reform of tax administration and public revenue system – Reform of public enterprises – Public administration reform and rightsizing – Improvement of capital expenditure planning and realization – Business environment improvement

• Central

Government budget surplus 0.1% GDP and General Government budget deficit 1.4% GDP in 2016

• Six successful IMF program reviews during 2015 and 2016

Source: Ministry of Finance Source: Ministry of Finance * projected Source: Ministry of Finance

Consolidated Fiscal Balance (% of GDP) Central Government Budget (RSD bn) Tax Revenues (as % of GDP)

17

• 1,5% -1,9%
• 2,6%
• 4,4%
• 4,6% -4,8%
• 6,8%
• 5,5%
• 6,6%
• 3,7%
• 1,4%
• 8,0%
• 7,0%
• 6,0%
• 5,0%
• 4,0%
• 3,0%
• 2,0%
• 1,0%

0,0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 0% 5% 10% 15% 20% 25% 2011 2012 2013 2014 2015 2016 Other tax revenues Duties Profit tax Personal income tax Excises VAT 788 812 881 948 1042 1093 980 986 1128 1063 1050 1162

• 192
• 174
• 247
• 115
• 8
• 69
• 400
• 200

200 400 600 800 1000 1200 1400 2012 2013 2014 2015 2016 2017* Revenues Expenses Balance

 The IMF completed the first review of Serbia’s economic performance under the SBA on 26 June 2015 – The economy has stabilized, inflationary pressures remained subdued, the external position has strenghtened and credit growth remained slow  The IMF completed the second review of Serbia’s economic performance under the SBA on 23 October 2015 – The economic growth has remained positive despite the significant fiscal tightening, the current account deficit has narrowed to a sustainable level, confidence has improved and gradual easing of monetary policy by the NBS has been appropriate in view of still low inflation  The IMF completed the third review of Serbia’s economic performance under the SBA on 18 December 2015 – The economy has continued to recover on the back of efforts to strengthen public finances, address structural weaknesses and improve the business climate  The IMF completed the fourth and fifth reviews of Serbia’s economic performance under the SBA on 31 August 2016 – Serbia’s economic recovery has exceeded expectations, supported by efforts to strengthen public finances, advance structural reforms and boost investment confidence, while authorities indicated their intention to continue treating the arrangement as precautionary  The IMF completed the sixth review of Serbia’s economic performance under the SBA on 16 December 2016 – Serbia’s economy continues to strengthen, supported by the efforts to improve public finances and address structural weaknesses. Employment is rising, inflation remains firmly under control, and public debt has started to decline. Significant progress has been made on fiscal consolidation, on account of strong revenue and on-going expenditure control

Serbia Reiterates the Importance of Cooperation with the IMF

18

Completed first review of Serbia’s Stand-By Arrangement Completed second review of Serbia’s Stand-By Arrangement

2008 2006 2009 2011 June 2015 Oct 2015 Dec 2015

Completed third review of Serbia’s Stand-By Arrangement Completed fourth and fifth reviews of Serbia’s Stand-By Arrangement

Aug 2016 Dec 2016

Completed sixth review

• f Serbia’s Stand-By

Arrangement

Active Debt Management Has Produced Stable Funding Base

Total foreign debt 64% Total domestic debt 36%

Other 15% IMF, 2% IDA, 2% Paris Club, 5% IBRD, 8% Other 1% T-bills and T-bonds 33% Frozen FX bonds 2% Guaranteed external debt 7% Eurobond, 20% EIB, 4%

Source: Ministry of Finance Source: Ministry of Finance Source: Ministry of Finance (RSD bn) Source: Ministry of Finance *In accordance with the Fiscal Strategy for 2017 with projections for 2018 and 2019

Public Debt Public Debt Service (RSD bn) Description of the Debt Structure (As of 31 December 2016) Development of the Currency Structure

19 125 128,0 134,0 132,5 501 537,2 686,4 608,0 100 200 300 400 500 600 700 800 900 2015 2016* 2017* 2018* Principal Interest 1547,5 2014,8 2309,0 2753,2 3018,6 3064,8 45,4% 56,2% 59,6% 70,4% 76,0% 72,9% 25,0% 35,0% 45,0% 55,0% 65,0% 75,0% 85,0% 0,0 500,0 1000,0 1500,0 2000,0 2500,0 3000,0 3500,0 2011 2012 2013 2014 2015 Dec-16 Public debt (in RSD bn) Public debt (% of GDP) 18,3% 20,3% 21,4% 22,2% 20,9% 51,0% 45,9% 41,7% 39,8% 39,7% 23,1% 27,7% 31,5% 32,9% 33,9% 5,7% 4,6% 4,2% 3,9% 3,7% 1,9% 1,5% 1,2% 1,2% 2,0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2012 2013 2014 2015 Dec-16 Other SDR USD EUR RSD

Debt Mix and Currency Structure

Source: Ministry of Finance, as of 31 December 2016 Source: Ministry of Finance, as of 31 December 2016 Source: Ministry of Finance, as of 31 December 2016 0,5% 1,3% Source: Ministry of Finance, as of 31 December 2016

Internal vs External Debt Interest Rate Mix Currency Breakdown Public Debt Residual Maturity Structure

20 79,0% 21,0% Fixed interest rate Variable interest rate 63,1% 36,9% Total foreign debt Total domestic debt 20,9% 39,7% 33,9% 3,7% RSD EUR USD CHF SDR Others 9,9% 8,2% 11,8% 26,5% 6,4% 11,2% 11,1% 5,9% 9,0% Up to 6 months Between 6 months and 1 year Between 1 and 2 years Between 2 and 5 years Between 5 and 7 years Between 7 and 10 years Between 10 and 15 years Between 15 and 20 years Over 20 years

Government Financing Needs 2017

Source: Ministry of Finance Source: Ministry of Finance

• The improvement in fiscal position of the Government decreased the

level of gross financing needs in 2016

• Total financing needs in 2017 are EUR 6.8bn of which EUR 1.6bn for

buy-back operations while in 2016 were EUR 4.0bn, due to significantly lower budget deficit than initially planned

• Financing plan for 2017:

√ EUR 4.7bn government securities domestic market, of which: * EUR 3.1bn denominated in dinars * EUR 1.6bn denominated in euros √ EUR 1.0bn Eurobond √ EUR 0.4bn IBRD √ EUR 0.4bn Abu Dhabi Emirate concessional loan √ EUR 0.3bn other sources

• February and July 2016, 3Y RSD and 7Y RSD 110bn benchmark

bonds issued

• Improved secondary market trading of government dinar securities due

to benchmark size issues in February and July 2016, 3Y RSD and 7Y RSD 110bn

• New dinar benchmark RSD bond issues planned in 2017
• Central

Government budget surplus 0.1% GDP and General Government budget deficit 1.4% GDP in 2016

Maturity Distribution of Local Currency Government Securities (As of 31 December 2016) Maturity Distribution of EUR Denominated Government Securities (As of 31 December 2016)

21 11% 25% 26% 20% 12% 7% 53W 2Y 3Y 5Y 10Y 15Y 8% 20% 40% 8% 23% 1% 53W 2Y 3Y 5Y 7Y 10Y

Government Securities – Domestic Market

Source: Ministry of Finance Source: Ministry of Finance 22

RSD securities-domestic market (Jan-Dec 2016) EUR securities-domestic market (Jan-Dec 2016) ATM of Government securities RSD weighted average accepted rate on primary auctions

Source: Ministry of Finance Source: Ministry of Finance

• 50

100 150 200 250 300 350 400 450 53W 2Y 3Y 5Y 10Y 15Y

EUR Millions

Redemptions New Issuance

• 20

40 60 80 100 120 3M 6M 53W 2Y 3Y 5Y 7Y 10Y

RSD Billions

Redemptions New Issuance

9,52% 9,38% 10,10% 10,71% 11,02% 12,15% 12,49% 7,35% 7,54% 8,49% 9,21% 10,16% 10,93% 11,99% 12,99% 4,96% 4,42% 5,94% 7,06% 8,62% 6,50% 11,99% 2,78% 3,13% 3,87% 4,78% 5,30% 5,83% 2,50% 4,50% 6,50% 8,50% 10,50% 12,50% 3M 6M 53W 2Y 3Y 5Y 7Y 10Y 2013 2014 2015 2016 2,2 3,1 1 2 3 4 5 6 7 In years ATM RSD Securities ATM EUR Securities