Рiчний Звiт. Annual Report

Transcription

1 Рiчний Звiт 2004 Annual Report

2 Змiст Змiст Бачення, Мiсiя, Цiнностi 2 Звернення голови Правлiння 4 Звiт Правлiння банку 6 Основнi показники дiяльностi 7 Корпоративний бiзнес 8 Приватнi клiєнти 10 Довiдковий центр 16 Програма «Послуги найвищої якостi» 17 Фiнансовий звiт 18 Звiт незалежних аудиторiв 19 Баланс 20 Звiти про прибутки та збитки 21 Звiти про змiну у власному капiталi 22 Звiти про pух грошових коштiв 23 Вiдзнаки та нагороди 24 Соцiальна дiяльнiсть 25 Основнi фiнансовi послуги 26 Мережа фiлiй 28 Керiвництво банку 31 Група РЦБ та Райффайзен Інтернешнл 32 Content Vision, Mission, Values 34 Foreword of the Chairman of the Management Board 36 Managment Report 38 Key Figures Trend 39 Corporate Banking 40 Retail Banking 42 Call Center 48 SCSQ (Superior Customer Service Quality) 49 Financial Statement 50 Independent auditors report 51 Balance sheets 52 Statements of income 53 Statements of changes in shareholders' equity 54 Statements of cash flows 55 Acknowledgements and Awards 56 Social Activity 57 Main Financial Products 58 Branch Network 60 The Bank s Management 63 The RZB Group and Raiffeisen International at a glance 64 Addresses and contacts of selected RZB Group-members

3 Vision, Mission, Values Vision, Mission, Values

4 Vision, Mission, Values Vision, Mission, Values Vision Raiffeisenbank Ukraine the leading Ukrainian bank, part of Raiffeisen International Group. Raiffeisen International Group is the leading banking group in Central & Eastern Europe. Mission We seek long-term customer relationships. We provide a full range of highest quality financial services in Central & Eastern Europe. As a member of the RZB Group we co-operate closely with Raiffeisen Zentralbank and the other members of the Austrian Raiffeisen Banking Group. We achieve sustainable and above-average return on equity. We empower our employees to be entrepreneurial and to show initiative and we foster their development. Gable Cross The symbol of Raiffeisen Group is the Gable Cross, which decorates roofs and symbolises peace and wellbeing. Raiffeisenbank Ukraine (RBUA) was founded in March 1998 as a subsidiary bank of Raiffeisen Zentralbank Vienna. RBUA s banking license (No. 191 of ) enables the bank to provide a full range of banking services not only to corporate clients but also to individuals. Today RBUA is among the top10 Ukrainian banks in terms of total assets, capital and loan portfolio. 35

5 Foreword of the Chairman Foreword of the Chairman of the Management Board Dear Sirs, The year 2004 was a very successful year for Raiffeisenbank Ukraine. We have been developing more quickly than the Ukrainian banking system in general, consequently our market shares have grown in many market segments. You will see this in our financials in the annual report you hold in your hands. As before, the basis for the bank s financial success were its corporate clients. The volume of project finance deals has doubled within the year. The growth leader in volumes among corporate loans was construction project finance. During last year the corporate bonds portfolio of Raiffeisenbank Ukraine increased by 6.5 times. Together with dynamic growth of the own bonds portfolio the bank became more active on the capital market and actively participated in bond issues as lead-manager and underwriter. As of the end of 2004 the bank entered the top 10 Ukrainian banks in the bonds market dealing mostly with corporate rather than state bonds. Being one of the leaders in corporate banking, the bank is heading confidently towards leadership in retail banking. Last year was remarkable in the development of this segment of banking services: we 36

6 Foreword of the Chairman started mass sales of retail products and results appeared immediately: actually within one year since the launch of loans for private clients, Raiffeisenbank entered the list of the top10 Ukrainian banks, granting loans to individuals. The number of current and deposit accounts increased dynamically. This led to an increase in clients account balances and a considerably increased share in Ukrainian liabilities in the bank s balance sheet structure. Another achievement in 2004 relates to the branch network development. This year our network of branches and representative offices of Raiffeisenbank Ukraine reached the break-event point and became profitable. The number of corporate clients doubled. This is another evidence of active performance of branches which have not only entered new regions but also earned a good reputation as financial institutions. The trust to our branches and representative offices boosted the growth of the customer base. Also, the bank started SME (small & medium enterprises) business. Today we offer our banking products to all groups of corporate clients including small companies and private entrepreneurs. In the reported year representative offices of the bank started their activities in the regions the results of their activity are significant especially in terms of servicing of individuals. Raiffeisenbank Ukraine was the first bank to open representative offices as outlets for banking products sales in Ukraine. Their success is also explained by well-structured and standardized products of Raiffeisenbank Ukraine which are easy to sell. Standardized products and easy procedures of the bank s services became the basis for success of projects with third parties: car dealers, real estate agencies, etc. We quickly managed to teach managers of the partners to sell our products which considerably influenced the quantity of car and mortgage loans granted. Almost half of all car loans issued in Kiev were done via our partners the car dealers. As usual, in 2004 the bank focused on service quality improvement and personnel sales trainings. Thus, last year we introduced quick transaction zones aiming to service frequent but easy operations. Quick transaction zones shorten our customers visit time and improve service quality. Those clients who came for more complicated products and not using quick transaction zones also benefit from this innovation, which unloads retail officers who may service such customer more quickly. A 6 Sigma project was launched in the reporting year aiming to rationalize internal processes, improve job efficiency and most important stabilize the quality of services rendered. The Call-center continued to develop and provided new services. In 2004 it turned from an information center to a pre-sale consultancy center. Having called to the call-center, a potential client may estimate his chances for obtaining a loan from Raiffeisenbank Ukraine for different purposes. Analyzing our achievements in 2004, we may state that the success of Raiffeisenbank Ukraine is based on the fact that the bank became more open to the Ukrainian market, turned into a real universal bank servicing all groups of clients. We managed to improve the quality of services rendered; the absolute majority of our customers are truly satisfied with the results of our cooperation. I would like to assure you, that service quality and customer satisfaction levels will also be our key priorities in future. Igor Frantskevych Chairman of the Board 37

7 Management Report Management Report

8 Management Report Key Figures Trend Assets Capital in bln of UAH in mln of UAH , , , , , ,502 1, , , , Net Profit Deposits in mln of UAH in bln of UAH ,935 1,5 1, , ,408 0,5 684, ,489 3, , , , Loan Portfolio Personell in bln UAH , , ,139 0,403 0,

9 Management Report Corporate banking Johann Jonach, Deputy Chairman As in previous years, corporate banking achieved fast growth in Such growth was fueled by a very strong development of the Ukrainian Economy and the expansion of RBUA s network throughout Ukraine. We managed to further improve the overall quality of our services and to shorten internal processes. As a result of these efforts, RBUA s customer base doubled during the year to almost 4,000 corporate clients. In 2004, Corporate banking expanded its corporate products range for legal entities in the area of corporate lending and especially in cash management. Our Electronic Banking System (ELBA) is widely considered as one of the best on the market. Products like zero balancing and automatic transmission of statements of account (SWIFT MT 940) became very popular among our customers. RBUA also managed to strengthen its positions on the deposit side. In terms of corporate deposits Raiffeisenbank reached the 6th position among all banks according to the ranking of the Association of Ukrainian banks increasing its deposit base by almost 200% in comparison to the preceding year. 40

10 Management Report The Corporate banking strategy also aimed at a stronger penetration into the Small and Medium size corporate client segment. A separate department dealing with SME companies was established, offering a full range of banking products, including but not limited to current account services, deposit products, term loans, investment financing, revolving credit lines, payment guarantees, etc. Our approach is to offer SME clients standard banking products. However, we remain flexible in discussing the terms and conditions of our products and services with the sole purpose to deliver the kind of banking services that meet the needs of our clients and help them to expand and grow their business. Dedicated SME Corporate managers are available in each and every branch and outlet in order to provide our existing and potential SME customers with professional advice and the full range of banking products. Corporate lending is traditionally a major business line for Raiffeisenbank Ukraine. As of year end 2004 the corporate loan portfolio exceeded EUR 400 mio and brought RBUA the 6th position among all Ukrainian banks. Among the credit products project finance being a quite new product on the Ukrainian market, was in high demand. The volume of project finance loans increased twice in 2004 and made up more than EUR 43 mio by the end of the year. It provided a unique niche for RBUA among the Ukrainian banks. Raiffeisenbank Ukraine remains one of the leaders in financing of real estate projects in the country. Structured trade finance (STF) is traditionally one of Raiffeisenbank Ukraine core financing products. By the end of 2004 the STF loan portfolio made up EUR 168 mio. In 2004 Raiffeisenbank Ukraine increased financing of the metallurgical sector and of big national agricultural trading companies. We also started financing enterprises in the chemical sector. Documentary payment instruments were widely used by the customers in 2004 and the volume of documentary business increased by 32%. Increasingly payment guarantees denominated in Hryvnya to secure settlements between local entities within Ukraine were in demand. Besides, mid-term financing for new equipment purchases as a rule include in its structure payment guarantees or letters of credit. RBUA is always ready to render qualified assistance to its customers and to advise the optimal payment and financing structure that will ensure safe delivery of equipments or goods and the best possible price for financing. In order to meet the financial needs of its customers RBUA continuously widens the range of credit products. In 2004 RBUA launched an overdraft product which immediately met with high demand on the market. Additionally we plan to start factoring operations in the first quarter of

11 Management Report Retail Banking Volodymyr Lavrenchuk, Member of the Board In 2004, the bank served over private persons, about of whom were new clients. Their number, as compared with the preceding year, increased by a factor of 5.5. The number of adherents to a high-quality service by European standards among private persons has been noticeably growing from year to year and they make their choice in favor of Reiffeisenbank. Credits to private clients Since the commencement of implementation of the program for crediting of private persons in mid-2003, the bank granted over 7,000 credits for a total of over UAH400 million. The portfolio of consumer credits of Raiffeisenbank grew at the highest rate among all Ukrainia banks. In 2004 there were granted over UAH300 million of credits; the portfolio of credits granted to physical persons increased 25% a month on average and fourfold over the year. 42

12 Management Report Structure of consumer credit portfolio by types Car credits 60% Housing credits 40% In such a short time, the bank made a considerable advance on the market of consumer credits and became one of top ten creditors of the population, which include large systemic banks having 5 years' experience in the crediting of private persons. Today, the share of Reiffeisenbank on the consumer credit market exceeds 3%. In 2004, the most important retail credit products were car and housing credits. At the end of the year, the structure of the portfolio was as follows: car credits, 60%; housing credits, 40%. The bank is continuously working on the improvement of its credit services to the population, making them more attractive and affordable for a broader circle of private persons. In 2004, the bank offered the following types of credit products: (1) a wide range of mortgage credits: credit for purchase of housing on the secondary real estate market; credit for repair or reconstruction of housing; credit for the refinancing of an existing mortage loan; credit for renovation of housing or for consumer needs based on a mortage. (2) car credits: for purchase of new medium-class cars; for purchase of new elite-model cars. (3) payment cards with a credit line. Volumes of credits granted to private persons by types 250 in mio UAH Jan 04 Feb 04 Mar 04 Apr 04 May 04 Jun 04 Jul 04 Aug 04 Sep 04 Oct 04 Nov 04 Dec 04 Jan 05 Car loans Mortage loans 43

13 Management Report Cars loans At the end of 2004, the bank's portfolio of credits granted to private persons for the purchase of new cars amounted to over 4,800 loans with a total of over UAH240 million; the average amount of a loan was of UAH50,000. In 2004, the bank's portfolio of car credits to private persons increased by a factor of 3.6; during the year, the bank granted more than 320 loans per month for a total of over UAH14.5 million for the purchase of new passenger cars. Portfolio structure of car credits to private persons by currency of credit Credits in foreign currency 67% In the past year, the bank introduced a "Bank's Partner" crediting system which enables a client (at an Credits in natiomal currency 33% interest rate 1% lower than the basic rate), to perform the procedure of execution and obtaining of a loan at the premise of a trade partner, car trader. This crediting project was commenced on 1 April As of the end of the year, nearly 15% of car loans were granted by this scheme. As of the end of the year, more than 300 car showrooms became partners of the bank in car crediting. At the end of the year, the bank launched a Trade-In program enabling a bank's client who already has a car credit to obtain a credit for a new car model, the advance payment for which will be the car already being in pledge of Raiffeisenbank. As a result, as of the end 2004 the bank won nearly 3% of the car loan market. Mortgage lending Portfolio structure of mortgage credits to population In 2004, the bank intensively continued to increase volumes of mortgage lending, offering clients convenient and standardized products for purchase and repair of dwellings as well as for consumer purposes. In a period beginning from the second half of 2003, Raiffeisenbank Ukraine granted over 2,300 standard housing mortgage credits for a sum of UAH160 million, about 70% of them in the regions of Ukraine. The average amount of a credit was of UAH70,000. Most housing credits were granted by the bank to residents of Kyiv, Zaporizhia, Donetsk, Odesa, Dnipropetrovsk, and Lviv. Refinancing 1% Credits for consumer purposes 33% Mortgage credits for purchase of housing are in greatest demand in towns of Ukraine. Their share in the structural distribution by types of housing mortgage credits amounts to over 60%; credits for improvement of the quality of dwelling (repair/reconstruction) account for 13%, and credits for consumer purposes on the security of a real estate, for 24%. Credits for purchase of housing 67% Аnalysing demands of clients, the bank permanently continues to improve conditions for granting credits on the security of real estate, enhancement of their accessibility and attractiveness for clients. The offer of mortgage crediting products of Reiffeisenbank for the population is one of the broadest among banks in Ukraine. In June 44

14 Management Report 2004, the bank introduced a new product: credit for refinancing of mortgage housing credits. This made it possible to expand the clientele through attraction of qualified borrowers with a positive credit history. The overall portfolio of mortgage credits of the bank in the current year increased fivefold. On average, the volumes of crediting on the security of a real estate increased by UAH10.5 million each month. Introducing the program of mortgage housing crediting, Raiffeisenbank attracts as partners independent appraisers, realtors, and insurance companies. Such a cooperation reduces the bank's risks and opens up opportunities for mass-scale sales of mortgage credits, making crediting procedures convenient and transparent, and enhances the confidence of borrowers in their protection at a pledge of dwelling for a long term. During 2004, Raiffeisenbank greatly strengthened its positions among the main mortgage creditors of Ukraine, which have long-term programs of the housing mortgage crediting. This is shown by the growth of the Raiffeisenbank's market share to 5% as compared with 2% in 2003, and today the bank is among the seven leading mortgage creditors of Ukraine. At the end of 2004, Reiffeisenbank promoted a new credit product, card with a credit line, and was one of first banks on the consumer crediting market which introduced opening of unsecured credit lines on a plastic card. A pilot realization of this project through direct sales agents yielded 10% of total sales of such credits. Intensive promotion on the market and mass-scale sales of this credit product resulted in a considerable increase of the clientele. 45

15 Management Report Retails deposits Structure of deposits of private persons in terms of currencies EUR 16% UAH 20% The year 2004 was successful for Raiffeisenbank also in respect to attracting deposits from private persons. The Bank made a large dash on the retail banking market, gaining the 15th place in the banking rating (according to data of the Association of Ukrainian Banks) in retail deposits, compared to the 24th place at the beginning of the year. Thus, at the end of 2004 Raiffeisenbank held 1.5% market share in retail deposits compared to 2003 when its market share was only 0.69%. The rate of growth of private clients deposits in Raiffeisenbank was the fastest in the Ukrainian banking system. USD 64% Aimed at meeting the demands of our clients, the Bank offers diverse and attractive deposits and savings products starting from servicing current accounts with a standing order for effecting regular payments to savings deposits, which are very popular at present. In addition, the Bank offers private persons traditional short-term and long-term deposits, certificates of deposit, child deposits, and settlements by cards of international payment systems Visa and EuroCard/MasterCard. To improve the service quality and increase the speed of opening of deposit and current accounts for individuals, the Bank introduced a special project within the framework of the 6 Sigma, which significantly shortened the time for opening of accounts for private persons. Dynimics of deposit portfolio in Thousands of UAH 60,000 50,000 40,000 30,000 20,000 10,000 0 Jan 04 Feb 04 Mar 04 Apr 04 May 04 Jun 04 Jul 04 Aug 04 Sep 04 Oct 04 Nov 04 Dec 04 Jan 05 savings deposits term deposits current accounts certificates of deposit 46

16 Management Report During the year, the total volume of savings on private clients accounts in the Bank increased nearly threefold to UAH 560 million. Structure of retail deposits by types of deposit products Certificates of deposit 2% Current accounts 14% As of January 1, 2005, the Bank opened over accounts. About persons became depositors of the Bank. The share of term deposits in the total volume of Bank's resources attracted from private persons amounted to 64% or UAH357 million; 36% of private persons funds are call deposits. An analysis of the ratio between term deposits and call deposits attracted by Ukrainian banks in retail sector evidences that the share of funds on call accounts was stable and Card accounts 7% Savings deposits 15% amounted to about 20%. The share of similar funds in Raiffeisenbank remained unchanged and amounted to about 30%, that is, the share of cheaper funds, call deposits, in the Bank's portfolio was higher than the average in the market. The average amount of a deposit in the Bank in 2004 was of about UAH In terms of currencies, the structure of deposits attracted from private persons was as follows: deposits in national currency 32%; deposits in USD and EUR 68%. Long-term deposits 49% Short-term deposits 13% Well received among our clients was a savings deposit with free withdrawal and replenishment of funds without a change of the interest rate, a product rather new on the Ukrainian market, but traditional for Europeans. A massscale campaign of Raiffeisenbank on the offer of this convenient product on the market started in May 2004 and during 6 months its share in the total volume of retail funds grew to 15%. 47

17 Call Center Call Center RBUA s Call Centre was opened on 19 September, Its creation was caused mainly by the necessity of providing a quality enhancement and increase of sales. There was formed a range of principles which are based on main tasks, set up for subdivision (that is providing existing and potential private clients of the bank with highly qualified consultations and presale of the whole range of banking products etc.) The range of principles which are used by the Call centre employees in the process of their work with clients are the following: accessible and understandable principle which means to grant complete and useful information, to provide wide information basis and ability of Call Centre employees to answer individual questions of concrete person as well as to explain problematic questions. speed of granting services is based on business-processes automatization, access of employees to bank information and software diversity. The Call centre is divided in 2 groups: Sale of banking products to the private clients Group Support of RBUA plastic cards holders Group Such division is determined by special features of work and functions of employees. The Call Centre helps potential clients to assess their chance to obtain a loan and to define the maximum loan amount which they may expect taking into account their credit worthiness. Such scheme is very comfortable for clients as well as for bank employees because it allows to reduce time. To sign an agreement Call Centre employee arrange a meeting of the client with retail managers in the RBUA branch by means of intranet transmission of information about the clients. With banking infrastructure enlargement the list of questions Call Centre employees should answer, permanently increases proportional to the banking services range widening. Please find below the telephone numbers which allow clients to receive necessary useful information Sale of banking products Support of RBUA plastic card holders The Call Centre is a very important participant in advertising campaigns of RBUA. From the beginning of 2004 the Call Centre received nearly calls. With the help of the Call Centre there were granted 290 loans with total amount of EUR 4 mio and attracted 517 deposits with a total amount EUR 2.5 mio. 48

18 Superior Customer Service Quality Superior Customer Service Quality (SCSQ) Dnipropetrovsk Best branch of 2004 The delivery of highest-quality services is the main obligation of banks in the Raiffeisenbank Group. Raiffeisenbank pays much attention to studying the demands and expectations of clients and, based on its results, develops corporate standards of services to clients in all its establishments. Since 2003, in Raiffeisenbank there has been functioning the program Highest- Quality Services", the principal goal of which is supporting and improving services to the bank's clients. The bank regularly carries out a comprehensive assessment of observance of service quality standards in all branches and information center, based on the experience of the Raiffeisenbank Group. The program of checking the adherence to quality standards helps the bank to understand, in which fields our results are excellent and where we have drawbacks in the delivery of certain services, so as to take necessary measures to eliminate such drawbacks. Corrections include various measures, such as improvement of operational procedures, introduction of additional products, organization of training programs for the personnel. The program of checking the adherence to quality standards gives the bank access to valuable information, which enables the bank to ensure the fulfillment of our promise as to the quality of services to clients. Volodymyr Sakhniuk, expert on work with corporate clients of the Bessarabske division service quality Champion of 2004 Every day, every minute, without exception, we promise: To make our services simple, comprehensible to clients; To display initiative for revealing financial needs of clients and to offer them our professional advice; To treat clients justly, benevolently, and with respect, to prove our competence. 49

19 Financial Statement Financial Statement

20 Financial Statement CJS Ernst & Young Ukraudit Kreschatic Street, 19A Kyiv 01001, Ukraine Tel.: 380 (44) Fax: 380 (44) Ukrainian Chamber of Auditors Certificate: ЗАТ Ернст енд Янг Украудит Україна, 01001, Київ вул. Хрещатик, 19А Teл.: 380 (44) Факс: 380 (44) Свiдоцтво Аудиторської Палати України: 0318 Independent auditors report Independent auditors' report to the Shareholders and the Board of Management of Joint Stock Commercial Bank Raiffeisenbank Ukraine We have audited the accompanying balance sheet of Joint Stock Commercial Bank Raiffeisenbank Ukraine (the "Bank") as at 31 December 2004 and the related statements of income, changes in shareholders' equity, and cash flows for the year then ended. These financial statements, on pages 1 to 24, are the responsibility of the Bank's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion the financial statements referred to above present fairly, in all material respects, the financial position of the Bank as at 31 December 2004 and the results of its operations and its cash flows for the year then ended in accordance with International Financial Reporting Standards. 28 February 2005 Kyiv, Ukraine 51

21 Financial Statement Balance Sheets For the years ended 31 December in Thousands of Ukrainian htyvnia Assets Cash and due from the NBU 737,626 75,522 Amounts due from credit institutions 250, ,784 Investment securities 138,209 16,637 Loans to customers 3,349,024 2,324,276 Current tax assets Property and equipment 46,075 39,695 Intangible assets 2,212 1,057 Other assets 3,593 4,471 Total assets 4,527,941 2,979,553 Liabilities Amounts due to credit institutions 1,201,945 1,090,849 Amounts due to customers 1,899, ,528 Tax liabilities 28,243 15,989 Other liabilities 3,600 3,403 Prepaid contributions into share capital 164,441 Borrowings 941, ,700 Total liabilities 4,074,922 2,759,910 Shareholders' equity Share capital 330, ,173 Share premium 2,370 2,370 Retained earnings 120,035 51,100 Total shareholders' equity 453, ,643 Total liabilities and shareholders' equity 4,527,941 2,979,553 Financial commitments and contingencies 52

22 Financial Statement Statements of Income For the years ended 31 December in Thousands of Ukrainian htyvnia Interest income 313, ,349 Interest expense (139,011) (65,756) Net interest income 174,761 51,593 Impairment (charge) release for interest earning assets (58,793) 3,242 Net interest income after impairment of interest earning assets 115,968 54,835 Fee and commission income 52,579 27,605 Fee and commission expense (12,005) (10,335) Net fee and commission income 40,574 17,270 Gains less losses from foreign currencies: dealing result, net 17,796 35,032 translation differences, net 1,856 2,842 Other income 1, Other non interest income 21,216 38,400 Salaries and benefits (34,143) (22,655) Other administrative and operating expenses (40,398) (23,803) Depreciation and amortisation (10,651) (6,997) Other impairment and provisions (charge) release (422) 26 Other non interest expense (85,614) (53,429) Income before income tax expense 92,144 57,076 Income tax expense (23,209) (15,073) Net income 68,935 42,

23 Financial Statement Statements of changes in shareholders' equity For the years ended 31 December in Thousands of Ukrainian hryvnia Share Share Retained Total shareholders capital premium earnings equity 31 December Dividends Net Income (1 684) (1 684) December Increase in share capital Net income December

24 Financial Statement Statements of Cash Flows For the years ended 31 December in Thousands of Ukrainian hryvnia Cash flows from operating activities Interest received Interest paid ( ) (63 464) Fees and commissions received Fees and commissions paid (12 005) (10 335) Gains less losses from dealing in foreign currencies Operating expenses paid (71 713) (45 652) Cash flows from operating activities before changes in operating assets and liabilities Net (increase)/ decrease in operating assets Amounts due from credit institutions (10 837) Securities portfolio ( ) (16 721) Loans to customer ( ) ( ) Other assets 1282 (2 008) Net increase /(decrease) in operating liabilities Amounts due to credit institutions Amounts due to customers Debt securities repaid (23 000) Other liabilities (2 761) 620 Net cash flows from (used in) operating activities before income taxes ( ) Corporate income tax paid (11 814) (7 701) Net cash flows from (used in) operating activities ( ) Cash flows from investing activities Purchases of property, equipment and intangible assets (18 233) (21 662) Proceeds from sale of property and equipment Net cash flows used in investing activities (17 960) (21174) Cash flows from financing activities Share capital contributions Borrowings Dividends paid (1 684) Net cash flows from financing activities Effect of exchange rate changes on cash and cash equivalents Net change in cash and cash equivalents Cash and cash equivalents, beginning of the year Cash and cash equivalents, ending of the year

25 Acknowledgements and Awards Acknowledgements and Awards Raiffeisenbank s effectiveness is reflected not only in figures, but also in the evaluation of the bank s performance by leading Ukrainian economic and business publications. Thus, according to the results of Business financial rating 2004, Raiffeisenbank Ukraine took the 2nd place in the nomination The bank you would place a deposit with. Raiffeisenbank Ukraine was chosen as Best bank 2004 by the KYIV POST readers and editorial awards. Also, we are pleased to inform that the year 2004 was very fruitful in terms of Mr. Igor Frantskevych s personal awards. Three leading publications ranked the Chairman of the Board Number 1 in their ratings: rating The Banker of the Year by Business; TOP-100 managers banking sector by Investgazeta; and the most successful managers Guard-500 introduced by Galytski Kontrakty. Such high level of evaluation of Mr.Frantskevych s achievements will further reflect positively on customer s trust towards Raiffeisenbank Ukraine. I see all bank awards and my personal awards as additional incentives for new achievements says Igor Frantskevych Awards prove that we are trend setters for banking standards in Ukraine let s keep the pace. 56

26 Social Activity Social Activity Raiffeisenbank Ukraine has always been of the opinion that a successful business should be socially responsible. One of the main values serving as a guide line for establishments of the Raiffeisen Group consists in the following: "We base our work and views on fundamental ethical values". Such values undoubtedly include the tradition of charity, which have been thoroughly retained and introduced in all subsidiaries of the Group for decades. The charity practiced by Raiffeisenbank Ukraine during the whole period of its activity makes it possible to assert that the bank is not only engaged in the development of its business, but also sees itself as a long-term partner and inseparable part of the whole Ukrainian society. In 2004, the bank rendered philanthropic financial aid in the following areas: Aid to veterans' organizations: Organization of war-disabled persons and disabled soldiers of armed forces of the Zhovtnevyi district of Zaporizhia; Kyiv City Philanthropic Fund of social protection of prisoners, victims of nazist persecutions. Aid to children: Halytska district administration of Lviv town Rada for the conduct of a philanthropic celebration of St. Nicolas for disabled children, orphans, and children from large low-income families. Aid to municipal philanthropic programs: Philanthropic fund "Socio-economic programs" (Mykolaiv); Philanthropic fund "Kharkiv-350 (Kharkiv). Aid to establishments of culture: Hnat Yura philanthropic fund of Ivan Franko theater (Kyiv) "Young Theater" (Kyiv). 57

27 Main Financial Products Main Financial Products Account and Payment Services Current accounts in UAH and FCY Domestic and international funds transfers Commercial cheques collection Cash payments Plastic cards Cash collection and night cash Documentary business Export L/C Import L/C Documentary Collections Guarantees Loans Bid Bonds Performance Bonds Advance Payment Guarantees Payment Guarantees Standby L/Cs Credit Repayment Guarantees Structured Trade Finance Short-term Loans Commercial Short & Medium-term Loans Investment Loans Overdrafts Treasury Services Term Deposits & Call Deposits FX Transactions Banknotes Capital & Stock Market Services Bonds Issue Management Underwriting Custody Securities Trade Certificates of Deposit Bills of Exchange Brokerage 58

28 Звернення Голови Правлiння Retail Banking Products Current account services in UAH and FCY Deposits Domestic and international funds transfer services Operations with Traveller and Commercial Cheques Plastic Cards Servicing Car loans Mortgage loans Commercial mortgage Loans for SMEs Refinancing loans SME products Vehicle loans Equipment loans Working capital financing Credit lines Overdrafts Commercial Mortgages 59

29 Branch Network Branch Network

30 Branch Network Branch Network Branches At the end of 2004 Raiffeisenbank Ukraine s Branch Network consisted of 8 regional branches (Donetsk, Dnipropetrovsk, Zaporizhzhya, Mykolaiv, Odesa, Lviv, Uzhgorod and Kharkiv) and 5 retail outlets. In the strategic plan for the bank plans an accelerated branch network development with the aim to create a nation wide bank and to have branches in all regions of Ukraine. The branch network of the bank is one of the most effective among the Ukrainian banks. In 2004 the whole Branch network reached its break-even point. The customer base of the Branch network grew in times to persons. The branches loan portfolio increased in 2004 from UAH 670 mio to UAH mio or almost twice. The amount of loans per branch/retail outlet at the beginning of 2004 was UAH 67 mio, at the end of 2004 it reached almost UAH 110 mio, having increased 60 % during the year. The number of disbursed loans to private individuals through the branch network in 2004 was loans (in loans), thus growth was 3.2 times. The amount of liabilities has grown to UAH 680 mio or almost 2.5 times in comparison with Alternative sales channels Representative Offices of the Bank In 2004 RBUA continued to open Representative offices in regional centres, where the bank is not represented by branches or retail outlets. In RepOffices were created and began operating. At the end of 2004 RepOffices were functioning in 14 cities: Sumy, Simferopil, Kherson, Cherkasy, Ternopil, Lugansk, Poltava, Ivano-Frankivsk, Vinnitsya, Khmelnitskiy, Lutsk, Krivyy Rig, Kremenchuk and Illichivsk. The main background of efficient work of Representatives was standardization of banking products and procedures for private individuals and entrepreneurs. The effective work of RepOffices is the first step for the establishment of a branch or retail outlets in the region. The experience of RepOffices activity shows that at the end of 2004 private individuals and SME loans reached UAH 87 mio. Also in 2004 car loans were in the highest demand, though the share of mortgage loans was continually growing. The volume of corporate loans was more than UAH 50 mio. Total customer numbers increased from 63 at the beginning of 2004 to 1677 at the end of 2004 or more than in 26 times. Direct Sales Agents (mobile bankers) Direct Sales Agents as alternative channel of banking products sales, which is actively used in banks of the Raiffeisen Group in Poland, Czech Republic and Hungary. In our bank the pilot project Direct sales agencies started in October The main task of these Agents is new customers acquisition by selling payment cards and other standard products of the bank. The Agents work is connected with everyday telephone talks with potential clients, personal meetings, presentations. The Agent finds a potential client by himself, has a meeting with him at the appointed time of his place, consults him and fills in the printed customer s application form. The project is oriented towards those people who are potential clients of the bank, but because of their intensive work lack time to visit a bank outlet. 61

31 Branch Network Raiffeisenbank Ukraine 43 Zhylyanska St., Kyiv, tel.: (044) fax: (044) (round-the-clock) Donetsk Branch 127 Postysheva St., Donetsk, tel.: (062) fax: (062) Dnipropetrovsk Branch 20 Artema St., Dnipropetrovsk, tel.: (056) fax: (056) Zaporizhzhya Branch 66 Lenina Avenue, Zaporizhzhya, tel.: (061) fax: (061) Odesa Branch 10 Bunina St., Odesa, tel.: (0482) fax: (0482) Mykolaiv Branch 6a Spaska St., Mykolaiv, tel.: (0512) fax.: (0512) Lugansk Branch 8 Heroes of WWII Avenue, Lugansk, tel.: (0642) fax: (0642) Lviv Branch 20 Ivana Franka St., Lviv, tel.: (0322) fax.: (0322) Kharkiv Branch 56 Sumska St., Kharkiv, tel.: (057) fax.: (057) Uzhgorod Branch 2 Kyivska Naberezhna St., tel.: (0312) fax.: (0312)

32 The bank s Management The bank s Management Shareholders Raiffeisen International Bank-Holding AG % Raiffeisen Zentralbank Osterreich, Vienna 0.003% Supervisory Board Head of Supervisory Board: Supervisory Board Members: Dr. Herbert Stepic, Chairman of the Managing Board of Raiffeisen International Bank-Holding AG, Deputy Chairman of Raiffeisen Zentralbank Osterreich AG (RZB) Mr. Jeffrey Millikan, Managing Director of Raiffeisen International Bank-Holding AG Mr. Otto Auboeck, RZB Treasury Management Board Chairman Deputy Chairman Member of the Board Member of the Board Іgor Frantskevych Johann Jonach Volodymyr Lavrenchuk Liliya Lazepko 63

33 The RZB Group and Raiffeisen International The RZB Group and Raiffeisen International at a glance Raiffeisen Ukraine is a subsidiary of Raiffeisen International Bank-Holding AG (Raiffeisen International), a fully consolidated subsidiary of Raiffeisen Zentralbank Еsterreich AG (RZB). RZB in turn is the central institution of the Austrian Raiffeisen Banking Group (RBG), the country's most powerful banking group. As of 31 December 2004, RBG's consolidated balance sheet total amounted to џ billion. It represents approximately a quarter of all domestic banking business and comprises the country's largest banking network with almost 2,300 offices and some 23,000 employees. Founded in 1927, RZB provides the full range of commercial and investment banking services in Austria and is regarded a pioneer in Central and Eastern Europe (CEE). It ranks among the region's leading banks, offering commercial, investment and retail banking services in the following markets: since 1987 Hungary Raiffeisen Bank Rt. since 1991 Slovakia Tatra banka, a.s. since 1991 Poland Raiffeisen Bank Polska S.A. since 1993 Czech Republic Raiffeisenbank a.s. since 1994 Bulgaria Raiffeisenbank (Bulgaria) E.A.D. since 1994 Croatia Raiffeisenbank Austria d.d. since 1997 Russia ZAO Raiffeisenbank Austria since 1998 Ukraine JSCB Raiffeisenbank Ukraine since 1998 Romania Raiffeisen Bank S.A. since 2000 Bosnia and Herzegovina Raiffeisen Bank d.d. Bosna i Hercegovina since 2001 Serbia and Montenegro Raiffeisenbank a.d. since 2002 Slovenia Raiffeisen Krekova banka d.d. since 2002 Serbia and Montenegro/Kosovo Raiffeisen Bank Kosovo J.S.C. since 2003 Belarus Priorbank, JSC since 2004 Albania Raiffeisen Bank Sh.a. Raiffeisen International acts as the steering company for these banks and their subsidiaries. It is and will always be majority-owned by RZB. Minority interest is held by the International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD). In April 2005 the company made an Initial Public Offering (IPO) addressed to Austrian retail customers as well as Austrian and international institutional investors. Raiffeisen International is listed on the Vienna Stock Exchange. Raiffeisen International continued its successful path of the previous years in Its balance-sheet total amounted to џ 64

34 The RZB Group and Raiffeisen International 28.9 billion at year-end That translates into a growth of 44.1 cent or џ 8.6 billion, of which џ 1.6 billion were attributable to the acquisition in Albania. Profit before tax reached џ million, almost 24 per cent up on the comparable figure for banking outlets covered the CEE region at the balance sheet-date, and a staff of more than 22,800 was employed. As per year-end 2004, the RZB Group's balance sheet total amounted to џ 67.9 billion, up more than one fifth on the figure for IFRS-compliant profit before tax more than doubled to џ 706 million. Return on equity before tax came in at 27.4 per cent, the best ratio reported by any major Austrian bank. At the reporting date, the Group employed a staff of more than 25,300 worldwide. In addition to its banking operations which are complemented by representative offices in Russia (Moscow) and Lithuania (Vilnius) RZB runs several specialist companies in CEE offering solutions, among others, in the areas of M&A, real estate development, fund management, leasing and mortgage banking. In Western Europe and the USA, RZB's operations include a branch in London, representative offices in New York, Brussels, Milan and Paris as well as a finance company in New York and a subsidiary bank in Malta. In Asia, RZB runs branches in Singapore and Beijing as well as representative offices in Hong Kong, Ho Chi Minh City, Mumbai, Tehran and Seoul. This international presence clearly underlines the bank's emerging markets strategy. The RZB Group's consistent commitment to quality is reflected by a broad range of local and international awards. As in the previous year, RZB and Raiffeisen International were awarded the title "Best Bank in Central and Eastern Europe" by distinguished Global Finance magazine in April At the same time, local awards for the "Best Bank" were given to the Network Banks in Albania (Raiffeisen Bank Sh.a.), Bosnia and Herzegovina (Raiffeisen Bank d.d.), Romania (Raiffeisen Bank S.A.), Serbia and Montenegro (Raiffeisenbank a.d.) and Belarus (Priorbank). In September 2004, The Banker, the renowned magazine of the Financial Times group, awarded the prestigious prize "Bank of the Year 2004" to RZB's network banks in Albania, Belarus and Bosnia and Herzegovina. RZB is currently rated as follows: Standard & Poor's Short-term A1 Moody's Short-term P-1 Moody's Long-term A1 Moody's Financial Strength C

35 Addresses and contacts Addresses and contacts

36 Addresses and contacts Addresses and contacts for selected members of the Raiffeisen International Group Raiffeisen International Bank-Holding AG Austria (Head Office) Am Stadtpark 9, 1030 Vienna Phone: Fax: Contact:Roman Hager Banking Network in Central and Eastern Europe Albania Raiffeisen Bank Sh.a. Rruga Kavajes, Tirana Phone: Fax: SWIFT/BIC: SGSBALTX Contact: Steven Grunerud 84 banking outlets Belarus Priorbank, JSC 31 A, V. Khoruzhey Str. Minsk, Phone: or Fax: SWIFT/BIC:PJCBBY2X Contact: Olga Gelakhova 43 banking outlets Bosnia and Herzegovina Raiffeisen Bank d.d.bosna i Hercegovina Danijela Ozme 3, Sarajevo Phone: or Fax: SWIFT/BIC:RZBABA2S Contact: Edin Muftic edin.muftic@rbb-sarajevo.raiffeisen.at 62 banking outlets Bulgaria Raiffeisenbank (Bulgaria) E.A.D. Gogol Ulica 18/20, 1504 Sofia Phone: Fax: SWIFT/BIC: RZBBBGSF Contact: Momtchil Andreev momtchil.andreev@rbb-sofia.raiffeisen.at 52 banking outlets Croatia Raiffeisenbank Austria d.d. Petrinjska 59, Zagreb Phone: Fax: SWIFT/BIC: RZBHHR2X Contact: Lovorka Penavić lovorka.penavic@rba-zagreb.raiffeisen.at 34 banking outlets Czech Republic Raiffeisenbank a.s. Olbrachtova 2006/ Prague 4 Phone: Fax: SWIFT/BIC:RZBCCZPP Contact:Rudolf Rabiňák rudolf.rabinak@rb.cz 49 banking outlets Hungary Raiffeisen Bank Rt. Akade mia utca 6,1054 Budapest Phone: Fax: SWIFT/BIC: UBRTHUHB Contact: Richárd Magasy rmagasy@raiffeisen.hu 71 banking outlets Kosovo Raiffeisen Bank Kosovo J.S.C UÇK Street 51, Priština Phone: Fax: SWIFT/BIC: RBKOCS22 Contact: Oliver Whittle oliver.whittle@raiffeisen-kosovo.com 22 banking outlets Poland Raiffeisen Bank Polska S.A. Ul. PieНkna 20, Warsaw Phone: Fax: SWIFT/BIC: RCBWPLPW Contact: Piotr Czarnecki piotr.czarnecki@raiffeisen.pl 70 banking outlets Romania Raiffeisen Bank S.A. Mircea Vodã Blvd Bucharest 3 Phone: Fax: SWIFT/BIC: RZBRROBU Contact: Steven C.van Groningen centrala@raiffeisen.ro 205 banking outlets Russia ZAO Raiffeisenbank Austria Troitskaya Ul.17/1, Moscow Phone: Fax: SWIFT/BIC: RZBMRUMM Contact: Michel Perhirin michel.perhirin@raiffeisen.ru 18 banking outlets Serbia and Montenegro Raiffeisenbank a.d. Resavska 22, Belgrade Phone: Fax: , SWIFT/BIC: RZBJCSBG Contact: Budimir Kostić budimir.kostic@rba-belgrade.raiffeisen.at 27 banking outlets Slovakia Tatra banka, a.s. Hodžvo námestie Bratislava 1 Phone: Fax: SWIFT/BIC: TATRSKBX Contact: Rainer Franz rainer_franz@tatrabanka.sk 111 banking outlets 67