Russian Prime Minister V.V. Putin Conducts a Meeting of State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ Supervisory Board
As V.V. Putin said at the meeting that the Bank for Development was one of the most important participants in implementing the Government’s crisis management measures and made it possible to provide urgent assistance to the banking sector, the stock market and system-forming enterprises of the real economy. The Prime Minister also added that Vnesheconombank did its best to help its borrowers by extending balanced interest rates on credits, restructured former debts if required and acted guided by long-term objectives of Russia’s economic development.
V.V. Putin’s Opening Address
Esteemed Colleagues, today we’ll hear out Vnesheconombank’s report for 2009, approve its budget parameters for 2010 and consider a number of projects in which Vnesheconombank participates.
I’d like to say that in 2009, the Bank for Development was one of the most important participants in implementing the Russian Government’s crisis management measures, made it possible to provide urgent assistance to the banking sector, the stock market and system-forming enterprises of the real economy. The Bank’s employees performed this intensive work professionally. They carried out decisions efficiently and timely and provided the Government with considerable expert support.
Many measures carried out with the Bank’s assistance have already achieved their objectives and have been suspended and all the funds committed by the state have been returned in full. For example, VEB has already returned 175 billion rubles to the National Wealth Fund. The Bank used the funds to support the Russian securities market in the most difficult period in autumn of 2008, and in doing so it paid interest on them to the federal budget.
Additional incomes from these transactions in the amount of 54.7 billion rubles would be largely used to implement the plan that we announced under the affordable mortgage lending program.
The program aimed at refinancing Russian companies’ debts to foreign creditors was also carried out in accordance with the existing plans. I’d like to remind you that we had performed this work in order to prevent Russian companies’ strategic assets from being diverted to foreign financial institutions due to refinancing problems under the conditions of the global financial and economic crisis. Well, then, the borrowers have already returned 4 billion rubles to VEB out of more than 11 billion they had received.
In general, VEB is taking an active part in stabilizing the banking system. The total amount of subordinated loans extended by the Bank of Development to other credit institutions was 404 billion rubles. Thanks to these loans, commercial banks received additional resources for financing the real economy.
Moreover, Svyaz-Bank’s and Globex Bank’s solvency was restored. The banks were placed under VEB’s control when they were virtually in a state of bankruptcy. At present, Vnesheconombank’s specialists are implementing strategies of their development. Specifically, today we are going to be told about the choice of a partner bank for a new project aimed at establishing a Postal Bank on the basis of Svyaz-Bank jointly with the Post of Russia.
Vnesheconombank participated directly in the financial restructuring of a number of major companies such as the United Aircraft Building Corporation and the Amurmetall Plant. VEB contributed 21 billion rubles to the United Aircraft Building Corporation’s charter capital and became an owner of 11% of its shares. And in December of 2009, an Agreement was signed on financing the Amurmetall plant for an amount of 2.2 billion rubles. The first tranche of 400 million rubles has been already transferred.
And I’d like also to say that despite the additional workload associated with crisis management measures Vnesheconombank carried on undertaking its core activity as a Bank for Development.
The amount of newly extended credits to the real economy was 123 billion rubles. The Bank extended guarantees worth 34 billion rubles under the innovative products support program. In 2009, 40 billion rubles were committed to small and medium-sized enterprises.
VEB started to finance such meaningful projects as the reconstruction of the Koltsovo airport in Yekaterinburg, the construction of an export terminal for coal transportation in the port of Vanino in the Far East and the construction of the Urengoy Electric Power Station in the Tyumen region.
Vnesheconombank is taking an active part in financing Olympic facilities.
Another important point to mention is that Vnesheconombank did its best to help its borrowers by extending balanced interest rates on credits, restructuring former debts if required and acted guided by long-term objectives of Russia’s economic development.
In doing so, Vnesheconombank performed pretty well, formed sufficient significant reserves to maintain its financial sustainability. In 2009, the Bank’s net profit amounted to 31 billion rubles. This is quite comparable to our leading credit financial institutions such as, for example, Sberbank.
It’s evident that it’s high time today to boost activities related to post-crisis economic recovery and modernization to support innovations and high-technology exports.
Our today’s agenda includes a number of such issues. In particular, we have to approve the opening of a credit line to finance the construction the Ekibastuz Power Station’s third power unit.
I’d like to stress that VEB’s credit resources in the amount of 12 billion dollars would be used to purchase domestic power-engineering equipment and it means that we’ll provide the Russian machine-building complex with guaranteed orders.
Moreover, the implementation of this project would help to reintegrate the energy systems of Northern Kazakhstan and Russia’s Southern Siberia and create additional opportunities for these regions’ comprehensive development.
Our next investment project is aimed at constructing a polypropylene manufacturing complex in Tobolsk. This is a large-scale strategic complex influencing directly the future of our chemical industry by raising its technological level and expanding opportunities for deep processing of raw materials.
We’ll also discuss the strategy of Vnesheconombank’s participation in upgrading the Sheremetjevo Airport.
Let’s get started with our work.
On Decisions made by Vnesheconombank’s Supervisory Board
VEB expects net profit in 2010 of about 20 billion rubles
Moscow, March 31, INTERFAX – VEB expects net profit in 2010 of about 20 billion rubles under Russian accounting standards, VEB Chairman Vladimir Dmitriev said following a meeting of the Bank’s Supervisory Board.
Moreover, the Supervisory Board approved opening a 12-billion ruble credit line for the Ekibastuz State District Power Station to support Russian exports of power engineering equipment.
Vnesheconombank selects partners for establishing a Postal Bank on the basis of Svyaz-Bank
NOVO-OGAREVO, March 31, /PRIME-TASS/. Vnesheconombank has selected partners for establishing a Postal Bank on the basis of Svyaz-Bank (SVZ01), Vnesheconombank Chairman said following a meeting of the Bank’s Supervisory Board.
According to him, Vnesheconombank has selected UniCredit Bank, Russian Standard Bank, Nomos-Bank (NMOS03) along with HomeCredit Bank to further participate in this project.
V.Dmitriev said that within a period of 3 months a financial model for creating a Postal Bank would be provided and Vnesheconombank would decide on its main partner in implementing this project.
On approving Vnesheconombank’s participation in the construction of a polypropylene complex in Tobolsk
Moscow. March 31. INTERFAX – VEB’s Supervisory Board approved on Wednesday an investment application for constructing a polypropylene production complex in Tobolsk, VEB Chairman Vladimir Dmitriev told journalists about it.
According to him, the total amount of financing the program of constructing an associated petroleum gas processing gas-chemical plant would be 1.5 billion dollars.
Speaking about this complex earlier, Russian Prime Minister Putin said that “it was a major strategic project directly influencing the future of our chemical industry, increasing its technological level and boosting the potential for deep processing of raw materials”.
On making a decision on centralized management of Terminal D in Sheremetjevo and creating a single operator
NOVO-OGAREVO. March31. /PRIME-TASS/. Vnesheconombank’s Supervisory Board made a decision to centralize the management of terminal D in the Sheremetjevo airport and create a single operator. Vnesheconombank Chairman Vladimir Dmitriev told journalists about it following a meeting of VEB’s Supervisory Board.
He said that Vnesheconombank would participate in financing the creation of a major hub.
V.Dmitriev added that consultants would determine a model of unifying the existing legal entities involved in the management and that a single operator would be created to be responsible for managing Terminal D and the Sheremetjevo airport.
V.Dmitriev added that the financial model examined preliminarily gave us real confidence that the current debt of 1.5 billion would be serviced and repaid.
He added that a consultant to assist in determining a financial unification model has not been identified.
Answering a question if VEB would be able to get a stake in exchange for debts in Sheremetjevo V.Dmitriev said that they were not discussing this issue for the time being. In his opinion the debt could be restructured but this possibility would be considered in the course of working out a financial unification model.
VEB is close to signing an agreement on restructuring debts of Tractornye Zavody Corporation.
NOVO-OGAREVO, March 31. /PRIME-TASS/. Vnesheconombank is close to signing an agreement on restructuring debts of Tractornye Zavody Corporation. Vnesheconombank Chairman Vladimir Dmitriev told journalists about it following a meeting of VEB’s Supervisory Board.
He also added that today Vnesheconombank’s Supervisory Board approved its participation in the toll motorway Moscow – St. Petersburg (section 15-58 km) construction project. According to him, VEB will participate in this project together with Sberbank (SBER), both banks’ stakes in this project are equal.
Under the Program of Vnesheconombank’s Investments in Affordable Housing Construction and Mortgage Lending Projects in 2010-2012, the Supervisory Board approved the mechanism for refinancing mortgage credits through investing a funded portion of the labour pension and Vnesheconombank’s own funds in mortgage-backed bonds in order to encourage mortgage lending and make it more affordable to the general public. A decision was also taken to invest funds in the total amount of 250 billion rubles on the following terms:
Vnesheconombank’s own funds to be invested in mortgage-backed bonds in the amount of up to 50 billion rubles at a coupon rate of 3% per annum under the bonds at prices no more than the par value;
Pension savings funds managed by Vnesheconombank acting as the state trust management company to be invested in mortgage-backed bonds in the amount of 100 billion rubles at a coupon rate of no more than9% per annum under the bonds at prices no more than the par value;
Pension savings funds managed by Vnesheconombank acting as the state trust management company to be invested in the Housing Mortgage lending Agency’s bonds guaranteed by the state in the amount of up to 60 billion rubles at a coupon rate to be set on the basis of market conditions;
Funds of the National Wealth Fund to be committed to Vnesheconombank subject to Federal Law dated October 13, 2008, №173-FZ to finance the Housing Mortgage Lending Agency’s credit line in the amount of up to 40 billion rubles at an interest rate of 9.5% per annum for a period of up to June 1, 2020.
A decision was made to approve “Requirements to Bonds including Mortgage Backed Bonds and to Mortgage Coverage of Bonds to be Purchased under the Program of Vnesheconombank’s Investments in Affordable Housing Construction and Mortgage Lending Projects in 2010-2012”.
A decision was made to approve “The Procedure for Cooperation between State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’, the Housing Mortgage Lending Agency, Vnesheconombank’s Investment Company (VEB Capital) and Credit Institutions and Mortgage Agencies in Implementing the Program of Vnesheconombank’s Investments in Affordable Housing Construction and Mortgage lending Projects in 2010-2012”.
The Supervisory Board approved extending guarantees as a security of VEB Capital’s liabilities under Agreements on Providing Services on Arranging Bond Issues to be concluded under the Program in favor of mortgage- backed bonds issuers for a total amount of 150 billion rubles with a validity period of no more than three years. Terms of issuing Vnesheconombank’s guarantees, changes in the terms and other terms of the Bank’s participation in this project are to be approved by Vnesheconombank’s Management Board.
VEB Capital together with the Housing Mortgage Lending Agency were assigned to prepare a format for reporting on the progress of extending housing and mortgage credits under this Program to be submitted for consideration by the Supervisory Board.
Press Office of Vnesheconombank
Contact person: Ekaterina Karasina
Phone: +7 (495) 608-46-93, Fax: +7 (499) 975-21-34
The following decisions were taken at Vnesheconombank’s Supervisory Board meeting on December 17, 2009:
Vnesheconombank’s Supervisory Board approved the strategy of OJSC Svyaz-Bank’s development. The strategy provides for establishing a Russian Federation Post Bank with the participation of the Post of Russia and a partner bank. The Board decided to form a working group comprised of representatives of interested ministries, the Bank of Russia, the Post of Russia and Vnesheconombank to prepare a complex of events to set up a Post Bank.
The Board made a decision providing for Vnesheconombank to extend a subordinated loan worth 16 billion rubles to OJSC Svyaz-Bank under Federal Law № 173 “On Additional Measures for Supporting the Financial System of the Russian Federation”.
The Supervisory Board acknowledged the report on Vnesheconombank’s activity on extending subordinated loans to Russian lending institutions under Federal Law № 173 “On Additional Measures for Supporting the Financial System of the Russian Federation”. This program is acknowledged as having been completed.
Vnesheconombank’s Supervisory Board agreed upon purchasing the OJSC United Aircraft Corporation’ shares by Vnesheconombank for an amount of up to 21 billion rubles.
The Supervisory Board approved Vnesheconombank’s participation in financing the project aimed at reconstructing and modernizing the Khabarovsk Oil Refinery. The project’s total value is 1.3 billion US dollars. The Project is to be financed through using Vnesheconombank’s credit resources and shareholders’ own funds. Vnesheconombank’s credit is to be fully refinanced by the Spanish Export Insurance Agency CESCE.
The Board made required decisions providing for Vnesheconombank jointly with SNC-Lavalin to create a specialized engineering company VEB-Engineering (LLC) to monitor investment projects of national significance implemented by Vnesheconombank.
The Board made required decisions to establish a specialized VEB Capital Company (LLC) designed to effectively manage Vnesheconombank’s assets.
Origin: Press Office of Vnesheconombank
Contact person: Ekaterina Karasina
Phone: +7 (495) 608-46-93, Fax: +7 (499) 975-21-34
V.V. Putin’s Opening Address
Good afternoon, Esteemed Colleagues!
At today’s Vnesheconombank’s Supervisory Board meeting we’ll hear out a report on implementing the Government’s crisis management measures and discuss a number of new investment projects.
As you know, Vnesheconombank played a prominent role in supporting our country’s banking system in the crisis period and continues to play this prominent role. The Bank also extended subordinated loans worth 388 billion rubles to 16 commercial banks that went through a selection procedure and undertook to increase financing amounts to end borrowers at interest rates affordable for enterprises.
Our latest arrangement was the Central Bank’s refinancing rate plus three percent. I am not sure that all this was effective and implemented in due time but I nevertheless hope this played a positive and stabilizing role in the most difficult period of time.
Given that subordinated loans were extended for a period of 10 years, these additional financial resources would support business activity in the economy in the future.
In this respect, I’d like to place particular emphasis on the Government’s joint efforts designed to support the country’s banking sector in the crisis period. As opposed to the said events during the 1988 crisis we succeeded in preventing the collapse of the banking system and bankruptcy of our largest financial institutions. I think that everybody remembers quite clearly that in 1988 all the largest commercial banks that looked like giants and absolutely reliable giants, namely, Incombank, Imperial, ONEXIM Bank all but ceased to exist.
I think that owners did not suffer much but depositors, citizens lost a considerable part of their deposits in these financial institutions. We managed to prevent this worst-case scenario and supported all those who were viable. We defended the interests of depositors and above all citizens of the Russian Federation.
And those banks that proved to be in the most complicated situation and failed to overcome this complicated situation on their own – there were 18 such banks – were transferred for a symbolic payment, sometimes for 1 ruble, into the state system of the Deposit Insurance Agency.
This measure is designed to reorganize these financing institutions, to consolidate them and create viable banking institutions for them to be able to continue working normally with economic players, with natural and legal entities.
Today, we have to determine the future of Svyaz-Bank.
Like a number of other lending institutions it failed to resolve on its own the problems that emerged. And for this reason, it was transferred under Vnesheconombank’s management. Vnesheconombank fully restored the Bank’s solvency for a short period of time.
Our task now is to work out a strategy of Svyaz-Bank’s development as well as terms on which we are ready to engage partners into this project.
Moreover, we have to take a decision on committing 21 billion rubles to the United Aircraft Construction Corporation’s charter capital. We have been discussing this issue for a long time, it took several months to prepare the decision, it was thrashed out thoroughly and we should take it today.
This is targeted money designed to financially rehabilitate the company and enable it to make payments to its creditors and suppliers.
At the start of the next year, the company is to receive additional 10.7 billion dollars from the federal budget. And this money will be used not to fill in the gaps but to manufacture new civil aircraft, domestic aircraft.
We’ll also consider proposals for financing a new investment project in the Far East; this project is aimed at reconstructing the Khabarovsk oil refinery.
There are plans to fully upgrade this production facility, which is of great importance for the region, and introduce there the most advanced and environmentally friendly technologies and make it possible to manufacture engine fuel meeting the highest standards: Euro-4 and higher. The project’s total value is 1.3 billion dollars.
I would like to remind you that at our previous Supervisory Board meetings we made decisions on establishing Vnesheconombank’s subsidiary institutions to manage its assets as well as a specialized engineering company. Its main task is to conduct expert’s examination of project documentation, monitor thoroughly the implementation of investment projects and, if necessary, take measures against non-targeted and inefficient use of Vnesheconombank’s credit resources.
Today, we’ll discuss and approve documents that will make it possible for VEB-Capital and the engineering company to start operating.
NOVO-OGAREVO, November 19 – RIA Novosti. At its meeting on Thursday, Vnesheconombank’s Supervisory Board considered an issue of the State Corporation’s possible participation in the coming Rusal’s IPO but the information on the decisions taken is confidential and will not be made public, Vnesheconombank Chairman Vladimir Dmitriev told journalists.
“We considered this issue and certain decisions were made. Any information on placing shares is confidential”, said Dmitriev at the end of VEB’s Supervisory Board meeting conducted by its Chairman –Russian Prime Minister Vladimir Putin.
“Any information on this account that gets into the mass media does not have anything to do with VEB”, said the Chairman of Vnesheconombank.
The Russian aluminum giant’s IPO is to be held until this year-end. Rusal’s shares are to be placed on the Hong Kong Stock Exchange and the Paris Euronext. The Company plans to sell 10% of its shares believing that it would raise 2.5 billion dollars through this IPO.
Earlier, the source close to Rusal told RIA Novosti that the Company stood a very good chance of reaching a final agreement on restructuring its debts to the consortium of foreign banks until November 19 - a critical date in terms of being able to hold IPO in the current year. Nevertheless, Rusal did not say that it had signed such an agreement.
VEB’s Supervisory Board decides to expand financing of mortgage lending through using pension funds
Moscow. November 19. INTERFAX-AFI – Vnesheconombank’s (VEB’s) Supervisory Board made a decision to expand the program of financing mortgage lending through using pension funds under the Bank’s management, VEB Chairman Vladimir Dmitriev told journalists after the Bank’s Supervisory Board meeting.
“A substantial part of about 470 billion rubles under VEB’s current management might be used to finance mortgage lending”, said V. Dmitriev.
According to him, VEB is expected to receive funds from the Russian Pension Fund in the first quarter of 2010. As a result, according to VEB’s Chairman, the total amount of pension funds under the Bank’s management would be 690 billion rubles.
“Taking into account limitations on investing funds in certain types of bonds, that is, 70% of one issue (in this case mortgage bonds) and no more than 20% of the total investment portfolio, we believe that the amount of mortgage lending would be significantly increased.
Moreover, he said the Bank’s Supervisory Board had also considered an issue of financing mortgage lending through using incomes generated by VEB through using financial resources of the National Wealth Fund.
V. Dmitriev said that through financing mortgage lending by VEB, interest rates on mortgage could be reduced and credit periods could be increased.