Development Bank Presentation. March, 2015

Transcription

1 Development Bank Presentation March, 2015

2 Development Bank s features Development Bank s establishment Functioning model The recent creation of a Development Bank is an opportunity to consolidate directed lending outside commercial banks and enhance the transparency and efficiency in allocation of resources. Authorities intention to establish a development agency as part of a broader process of carving out government-directed loans from bank balance sheets is welcome. Financial Sector Assessment Program, April, 2014 IMF Country Report No. 09/30, January, 2009 Development Bank s features its establishment was initiated by the Government was established in close cooperation with IMF and World Bank enjoys special legal status is a specialized development institution vicarious liability of the Republic of Belarus for Bank s bonds Objectives financing of investment projects included into state programs export credit granting agent-bank of the Government on external loan servicing and external government loans single coordinator of state programs 2

3 Organizational Structure General Meeting of Shareholders 100% state-owned Supervisory Board (9 members) Headed by Prime Minister Audit Committee Risk Committee checks legal observance of shareholders rights, oversees annual reports and financial statements of the Development Bank considers the Risk management Strategy, examines Risk management reports, provides recommendations for improvement Audit Committee Risk Committee Budget and remuneration Committee Budget and remuneration Committee considers projects of the annual estimate of the income and expenses, capital spending sights, the issues of motivation and remunerations Management Board All decisions pertaining to the main areas of Bank s activities are made by the General Meeting of Shareholders All major decisions in the sphere of strategic management are made by the Supervisory Board Each committee is chaired by an independent member of the Supervisory Board 3

4 % % % Development Bank s Strengths Limited foreign currency risk Conservative risk assessment 14.6 Development Bank 85.4 FX Loan Portfolio Structure, as of national currency foreign currency Banking system Reserve Level Development Bank Banking system Sizable capital buffers Capital Adequacy Ratio Development Bank 10 Banking system Critical public policy role Integral link to the Government Strong profitability Development Bank ROA Banking system 0 01 Jan Apr Jul Oct Jan 15 Robust liquidity No current accounts no liquidity pressure in crisis situation 4

5 Market position TOP 5 Banks in Belarus (as of ) Financial Position (Bank s results of 2013) TBD Financial Position (results for 2014) Belarusbank 16.7 Development Bank Belagroprombank 6.5 Belarusbank BPS-Sberbank 4.3 Belagroprombank 98.6 Development Bank 3.1 Belgazprombank 74.6 Belinvestbank 2.4 Assets, bln USD BPS-Sberbank 74.2 Profit, mln USD Belarusbank Balance Sheet Items Growth (trln BYR) Belagroprombank Development Bank BPS-Sberbank Bank BelVEB Equity, bln USD Assets Equity Loans Source: DBRB s calculation F 5

6 Key events of the Development Bank in 2014 The Development Bank will manage assets formed by the Government within the framework of the government program Big family. Annual amount of the assets is USD 120 million. International rating agencies Fitch and S&P affirmed the Development Bank s credit rating at B-/B with «stable» outlook. The Development Bank is entitled with the legislative initiative. The Development Bank is the only non-governmental body granted with this right. The Development Bank raised the biggest syndicated loan in the history of the Belarussian banking system (EUR 130 million). The bonds of the Development Bank are exempt from taxation from The Development Bank launched the program of SME financial support with the partnership of 10 Belarusian commercial banks. The number of projects of gaining credits under ECA cover was carried out. The credit under COFACE cover in the amount of EUR 9.9 million approved by the Ministry of Finance of France became a milestone event. In 2014 The Development Bank financed 74 projects in the equivalent of USD 500 million. Moreover, the Development Bank performed export crediting for an amount equal to USD million. 7

7 Credit Ratings fully correspond to sovereign ratings On September 4, 2013 Standard&Poor s assigned the Development Bank credit ratings equal to the sovereign ones On September 4, 2014 Standard&Poor s affirmed credit ratings, noted improvement of business position On February 5, 2014 Fitch assigned credit ratings to the Development Bank On November 25, 2014 Fitch affirmed credit ratings with stable outlook Long-term Short-term S&P Fitch S&P Fitch Republic of Belarus В- - В - Development Bank B- B- B B Belarusbank B- B- C В Belagroprombank B- - C - BPS-Sberbank - B- - В Bank BelVEB B- B- C В Belgazprombank - B- - B Key strength The bank enjoys special legal status Critical public policy role as the main institution providing long-term capital-intensive loans under government programs in Belarus Robust liquidity and funding positions Key strength Research Update, September 4, 2014 Close association with the Belarusian authorities Sizable capital buffers NPLs and restructured loans are fully covered by reserves Limited refinancing and foreign currency risks, robust liquidity and funding positions. Rating Action Commentary, February 5, 2014 Belinvestbank - B- - B 7

8 Shareholders Support Financial Support: Capital increase* Share capital (as of ) mln USD June mln USD December mln USD March mln USD March mln USD November mln USD December mln USD June mln USD mln USD Establishment of the Bank 1 st capital injection from shareholders. Capitalization of Government deposits Acquisition of Promagroleasing (the largest national leasing operator) Additional capitalization of Bank s profits Contribution to the authorized capital from JSC «Belaruskali» (building) 2 nd capital injection from the Government Additional capitalization of Bank s profits 3 rd capital injection from the Government * - USD equivalent as of the date of transaction Government deposits General capital adequacy ratio, Basel II Reimbursement from the Ministry of Finance for the losses related to the provision of nonmarket loans Nonfinancial Support: Government s vicarious liability for Development Bank s bonds Special status of the Development Bank: Senior government officials comprise the Supervisory Board Development Bank of Belarus KfW Group Development Bank of Japan* Development Bank of Kazakhstan Korea Development Bank China Development Bank Vnesheconombank *Basel III, as of As of , %

9 Loan Portfolio 3 Loan portfolio, bln USD Loan portfolio structure, % as of as of Transferred Loans Development Bank's Loans Agriculture Construction & Real Estate 15.4 Industry Trade 16.0 Infrustucture Other Loan portfolio FX structure, % BYR USD 2.8 EUR RUB as of as of Development Share of loans Bank s provided share under in lending the state under programs, state % programs, % Development Bank Banking System

10 Problem assets Belarusbank Belagroprombank Assets under the State Programs Transfer History First Stage 2011 Second Stage 2012 Third Stage 2013 Fourth Stage 2014 USD 0.3 bln USD 0.6 bln USD 0.5 bln USD 0.1 bln Non-performing loans* 10% Share of NPLs, % ( 1 day overdue + extended loans, as of ) 8% 6% 4% 7.6% 5.9% 7.6% 7.7% 6.5% Transferred loans % Loans provided by Development Bank 0.07 % 2% 0.5% 0.9% 0% H H H Reserve level in Development Bank* (as of ) 16.7% * According to NFRS Average level of NPLs in Belarusian banking system (as of ) 1.47% 10

11 Major investment projects Completed and current projects Stadium construction in Borisov USD 50 mln Turov dairy plant construction USD 110 mln «School Bus» project Delivery of BELAZ trucks to Mongolia and Russia Dairy farms construction USD 20 mln USD 40 mln USD 300 mln Reconstruction of the biathlon stadium of the Olympic training centre USD 45 mln Float glass production USD 300 mln USD Minsk Mikashevichy road reconstruction Perspective projects Delivery of 2 Embraer 195LR jets for Belavia Leasing of agricultural and forestry machinery USD 200 mln USD 52 mln USD 60 mln Construction of a third underground line in Minsk USD 2 bln Industrial rubber goods plant construction USD 25 mln Delivery of 3 Boeing NG737 jets for Belavia Modern foundry construction in Zhodino Second Minsk ring road construction USD 272 mln USD 29 mln USD 155 mln 11

12 Financing of investment projects Main directions of financing in 2015 Infrastructure USD 294 mln Agricultural Sector USD 195 mln Industry Modernization USD 104 mln Export Support USD 100 mln SME Support USD 43 mln Leasing USD 27 mln Priority of financing Creation of infrastructural facilities Knowledge-intensive and innovative projects Export-oriented projects Agricultural sector development Financing plan Funding sources USD 763 mln (in equivalent) Own funds, including capital injections from the Government Local Bonds (BYR) External Loans (FX) Assets under management within the scope of social program Big Family (up to USD 120 mln per year) 12

13 Strategy and near-term objectives #1 by capital in Belarus In TOP-3 among Belarusian banks by assets Single coordinator of State programs lending #1 by export loans First-class borrower on the international market Government agent for raising external loans Government agent for SME s support 13

14 International Business Foreign partner banks PTA Bank Cooperation with ECA Cooperation with IFIs and Development banks Recent DCM transaction March 31, mln EUR Dual Tranche Trade-related Syndicated Term Loan The biggest syndicated loan in the history of Belarussian banking system 14

15 The Branch Network. Subsidiary Compact branch network Effective human resources policy Number of employees (with branches) As of As of As of As of The modern system of HR management: Selection of highly qualified personnel; Effective employee motivation; Employee training and development of professional skills; Exchange of experience with other global development banks and IFIs. Subsidiary Branch network functions: - Operational functions related to the current activities with clients; - Non-performing loans management; - Preview of documents for credit granting; - Loans administration. 66,58% owned by Development Bank Key operator of the international leasing in Belarus 15

16 Key Financial Indicators Financial Indicators according to IFRS, mln. USD 2014 H1 2013* Total Assets 3 359, , , ,3 Due from banks 218,6 167,0 316,7 2,1 Loans to customers 1 893, , ,2 193,5 Securities available for sale 1 135, , , ,6 Property and other assets 111,8 94,0 43,5 17,1 Total liabilities and equity 3 359, , , ,3 Due to banks 231,6 133,1 0,0 0,0 Customers deposits 317,4 317,5 71,0 254,1 incl. Government s deposits 308,5 298,8 71,0 254,1 Капитал Debt securities in issue 1 688, , , ,7 Other liabilities 36,0 30,4 9,4 2,1 Equity 1 085, ,4 563,7-43,6 * consolidated statement incl. Promagroleasing incl. Share capital 1 033,4 938,8 356,9 3,5 * Consolidated statement incl. Promagroleasing Key Indicators Independent Auditors Report on Review Financial Statement on half-year basis since H Ownership-State Owned 100% 100% 100% ROE, % 5,6 8,8 - ROA, % 1,8 2,3 10,5 Tier 1 ratio, % 30,11 31,18 12,32 General capital adequacy ratio, % 31,91 31,75 22,20 16

17 New possibilities