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.
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