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.
Russian Prime Minister V.V. Putin Conducts a Meeting of State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ Supervisory Board
V.V Putin’s Opening Address
Good afternoon, Esteemed Colleagues!
At today’s Vnesheconombank’s Supervisory Board meeting we’ll discuss the Bank’s participation in boosting mortgage housing lending. Today we’ll consider an issue of financing mortgage lending. And not a word about football. We’ll discuss ways of how we can help to finance housing construction in the Russian Federation through using Vnesheconombank’s capabilities. I’d like to remind you that despite the problems caused by the economic crisis, mortgage lending is still one of the most effective and affordable ways of purchasing housing in many countries of the world. It was also in great demand by Russian citizens.
Starting in 2005 and up until now, the amount of mortgage housing lending has increased manifold, for example, in 2005 the amount was 60 billion rubles and in 2008 it was 630 billion rubles.
Of course, the crisis changed the situation in mortgage lending. Since autumn of 2008, the amount of mortgage loans extended has fallen substantially and the terms of obtaining mortgage loans have significantly worsened. Factually, mortgage loans have become unaffordable for an absolute majority of Russians.
In this situation our top priority was to support those who came up against problems of financing and who could not repay loans. Eighty thousand families have used the so-called maternity capital to fully or partially repay their mortgage loans. I’d like to remind you that maternity capital could be used from January 1, 2009, rather than from 2010 as planned. We also implemented the plan of allowing people to defer payments on mortgage loans. Both the Mortgage Housing Lending Agency and private banks, factually, with our Bank’s support participated in implementing this plan.
At the same time, while addressing day-to-day problems we should think about a post-crisis recovery of the mortgage sector. The more so, we can now see that people’s interest in applying for mortgage loans is growing.
Banks have started to expand mortgage business; they are reducing the size of down payment and interest rates on their mortgage loans.
Of course, 14.5% - an average interest rate on mortgage loans is too high for Russian citizens. Incomes in Russia are not high enough to pay such high interest rates. For mortgage loans to become affordable for a wide range of people we should try to reduce interest rate on such loans to 10-11%.
We can’t make it happen through giving directive instructions, this is an economic process but we should do our best to achieve this. And I suggest that we should discuss today ways of reinforcing the current trend for reducing interest rates on mortgage loans.
We are well aware that all over the world pension funds are used as an instrument for securing long-term credit resources.
Here I mean the amount of pension savings funds managed by Vnesheconombank, we might think about using these instruments in our country, of course, very carefully, with maximum guarantees.
Pension savings funds worth 690 billion rubles are currently managed by Vnesheconombank.
A month ago the Government approved a new strategy of investing pension savings funds managed by Vnesheconombank. Up to 20% of these funds or some 100 billion rubles can be invested in mortgage bonds of Russian banks.
So, banks will be able to extend new mortgage loans within this amount at more affordable interest rates and for longer periods. And by financing these loans, VEB should in fact act as a bank for development.
I know that the state bank’s attitude to this is anything but simple because mortgage loans do not generate high incomes but still it is a key function of this financial institution.
I suggest that we should discuss available options and practical steps VEB can make to implement these plans. We’ also discuss some other routine issues. Let’s proceed to the issues on our agenda.