эффект бумеранга

Transcription

эффект бумеранга

ЭФФЕКТ БУМЕРАНГА
Упорный труд вернётся успехом
ГОДОВОЙ ОТЧЕТ
ANNUAL REPORT
2013
BOOMERANG EFFECT
Hard work reaps success
2013
ANNUAL REPORT
2013
ANNUAL REPORT
Contents
Chair’s statement . . . . . . . . . .
Chief executive’s statement.
1. Profile
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
84
86
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Macroeconomic environment in 2013 .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. Financial highlights and main results for the year 2013 .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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92
4. Core business segments in 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
4.1. Personal banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
4.2. Corporate banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
4.3. Financial markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
4.4. Correspondent banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
4.5. Regional branches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
4.6. Risk management policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
4.7. Hardware and soﬅware complex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
4.8. Administration and HR management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
4.9. Sponsorship and charity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
5. Outlook for 2014 .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6. Financial statements for 2013
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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83
CHAIR'S
STATEMENT
Dear Sirs/Madam,
By addressing you from the pages of this Annual Report, as a shareholder and
the Chairman of the Board of Directors, I confess to be quite happy with the performance results of the reporting year. Throughout the year 2013, the Agropromcredit Bank had its key indicators grew in line with the market trend, while
the assets rose above the market. The Bank reported profit as of the year-end.
Within the year, the Bank improved its lines of retail products and offered better
terms and conditions for deposits. Such efforts led to a larger volume both in the
retail loan portfolio and the deposit portfolio. The corporate loan portfolio also
posted a steady growth. In 2013, the Bank was thorough and consistent in developing its utility payment products. Some up-to-date attractive projects were
launched to promote our payment cards.
The Bank reiterated its high solvency level as Moody’s Investors Service leﬅ unchanged the ratings assigned to the Bank — long-term deposit ratings at B2,
financial strength individual rating at E+, that matches basic assessment of the
credit standing at b2; short-term deposit ratings remained at Not Prime. Outlook for long-term ratings was stable.
The Bank continues with its proactive efforts for the benefit of the community,
being vigorously involved in support of the charity activities that are relevant in
areas of its business presence and in sponsoring festive, community and sports
events.
In 2013, the Bank of Russia took unprecedented measures to improve quality of
the banking sector as a whole by removing bad faith players, imposing tougher
requirements to the governance quality. Such measures, I believe it, are correct.
They are to ensure a stronger banking industry.
I would like to assure you that our Bank has been building its business based on
transparency and legality philosophy. We strive to improve both our products
and risk management quality, and seek fail-safety. We hope to be plain and crystal-clear for our clients and counterparties. We seek to get assurance, pragmatism, fair and understandable terms and conditions across to customers. In response, we get your loyalty.
All we have done, comes back to us. Here we have such boomerang effect.
Thank you for your time,
Artyom E. Bikov
Chairman of the Board of Directors
CHIEF
EXECUTIVE'S
STATEMENT
Dear customers, counterparties, shareholders and colleagues,
I am pleased to present you the Annual Report of Agropromcredit Bank for the
year 2013. The year under review saw moderate upsurge in the banking sector,
lower personal lending rate of growth, and speedup in overdue payments. Within
the year, there were less banking institutions operating in the industry market
that was stemmed from the regulator’s proactive efforts. Political risks prevailed
in the stock market that, coupled with reduced economic growth, resulted in
weak investment and no growth.
It was a successful year for our Bank as the targets assigned by shareholders
and the Board of Directors were met. Total assets reported a 23.87% rise, the
corporate loan portfolio increased by 10%, the personal loan portfolio was 32%
up and the personal deposits reported an increase by 31.5%. Throughout the
reporting year, more sub-offices were opened in Saint Petersburg, Orenburg and
Kogalym. Efforts were resumed under the agreement entered into with SME
Bank to take part in the Government-run programme to finance small and
medium-sized businesses. Our Bank joined the Unified Bank Guarantee Register
and became a member to the Public Information System for National and Municipal Payments. We continue with ensuring more fail-safety for our in-house
information systems, higher customer service quality and developing remote
banking.
In 2013, the Bank improved its financial strength as its authorised capital was
increased. The new share capital will be registered in 2014.
By addressing you from the pages of the Annual Report, I am grateful for your
cooperation and confidence in our company. We appreciate that and will do the
utmost to meet your expectations.
Thank you for your time,
Vasiliy A. Kornev
President of the Management Board
1
PROFILE
Agropromcredit Bank (open joint-stock company) is a universal credit
institution established in 1994. It ranks among 150 largest banking
institutions in Russia.
Position in the banking industry
The Bank is quite strong in personal banking and corporate
banking and is proactive in developing investment banking
business (trading in the security market and the interbank
market).
The year 2013 saw over 10,000 corporate customers
and about 150,000 individual customers served.
Regional chain of offices
By the end of the reporting year, Agropromcredit Bank's
regional network comprised 11 branches and 38 offices
located in five out of the eight federal districts nationwide.
The head office of the Bank is located in Moscow city with
branches opened in cities and towns such as Barnaul, Chelyabinsk, Kemerovo, Kurgan, Nizhny Novgorod, Orenburg,
Perm, Saint Petersburg, Surgut, Tyumen and Yekaterinburg.
Corporate governance
Governance of the Bank is conducted under applicable Russian law and its Articles of Association.
The supreme body of the Bank is its Annual General
Meeting.
The Board of Directors is in charge of general governance of the Bank, except for matters referred to the terms of
reference of the Annual General Meeting.
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The President of the Management Board as the sole executive authority and the Management Board as a collective
executive authority are in charge of ongoing management
of the Bank, except for matters referred to the terms of
reference of the Annual General Meeting or the Board of
Directors.
The terms of reference of the Bank’s governing bodies
are set forth in its Articles of Association.
Board of directors
)) Artyom E. Bikov
Chair
)) Vasiliy A. Kornev
First Deputy Chair
)) Alexei O. Bobrov
Board Member
)) Yury A. Zverev
Board Member
)) Tatiana B. Chernykh
Board Member
Management board
)) Vasiliy A. Kornev
President
)) Svetlana S. Ivanova
First Executive Vice President
)) Irina V. Dovdyenko
Executive Vice President
)) Pavel S. Ilyin
Executive Vice President
)) Svetlana A. Khmeleva
Chief Accountant
2013 ANNUAL REPORT
Share capital and shareholders
The Annual General Meeting of the Bank decided on 15 May
2013 to increase its share capital to 2 240 028 000 (Two
billion two hundred forty million twenty eight hundred) Russian roubles from 1 890 000 000 (One billion eight hundred
ninety million) Russian roubles through an additional issue
of ordinary registered book-entry shares.
The decision of the additional issue was registered on
11 July 2013 by the Credit Institutions' Licensing and
Financial Rehabilitation Department of the Bank of Russia.
Shareholders of the Bank as of 31 December 2013 were
Blaucent Ltd. (20%), Denciborg Ltd. (20%), Kinlaut Ltd.
(20%), Autotransbureau Ltd. (20%) and Project Finance
Company (close joint-stock company) (20%).
Reporting and audit
Agropromcredit Bank prepares its financial statements
both under Russian Accounting Standards and International
Financial Reporting Standards.
The audit of the financial reporting was conducted by
ZAO KPMG (main business registration number
1027700125628).
Licences
)) Full banking licence No. 2880 issued by the Bank of Russia on 03 August 2012 for banking business
)) Securities market professional’s indefinite-term licence
No.150-10075-000100 issued by the Federal Financial
Markets Service on 29 March 2007 for custody business
No. 150-08816-001000 issued by the Federal Financial
Markets Service on 20 December 2005 for portfolio
management business
Markets Service on 20 December 2005 for broker’s business
Markets Service on 20 December 2005 for dealer’s business
)) Licence LZ 0018139 Reg. No. 7730-X issued by the Russian Federal Security Service on 16 September 2009 for
cryptographic facility maintenance business
)) Licence LZ 0018140 Reg. No. 7731-R issued by the Russian Federal Security Service on 16 September 2009 for
cryptographic facility distribution business
)) Licence LZ 0018141 Reg. No. 7732-U issued by the Russian Federal Security Service on 16 September 2009 for
data encryption services
)) Licence LCZ 0009147 Reg. No. 13052-N issued by the
Centre for Licensing, Certification and National Secret
Protection on 30 July 2013.
Membership in associationss,
organisations and exchanges
Agropromcredit Bank is quite proactive in leading associations and organisations of the banking community.
)) Member of the MICEX Foreign Exchange Section having
access to trading in all foreign currencies within the
System of Electronic Trading (SELT) (decision No.15 by
the MICEX Exchange Board of 22 February 2001)
)) Member of the MICEX Stock Market Section (decision
No.8 by the MICEX Exchange Board of 24 July 2003)
)) VISA International Principal Member
)) MasterCard Worldwide Affiliate Member
)) SWIFT Member
)) Member of the Moscow Regional Union of Industrialists
and Entrepreneurs
)) Member of the Association of Russian Regional Banks
(Russia Association) (certificate No. 261 of 11 July 2003)
)) Member of the Association of Russian Banks (Reg. No.
1383 of 30 March 2004)
)) Member of the Chamber of Commerce and Industry of
the Moscow Region
)) Member of the National Association of Securities Market
Participants (NAUFOR) since 29 November 2005
)) Member of the Deposit Insurance Agency, Governmentowned corporation, holding a status of an authorised
bank for insurance benefits payments.
Banking ratings
In May 2008, Moody's Investors Service assigned Agropromcredit Bank ratings as follows:
)) international long-term rating at B2
)) short-term rating for deposits in foreign and domestic
currencies at Not Prime (NP)
)) financial strength rating at E+ (BFSR).
At the same time, Moody's Interfax Rating agency assigned
the long-term rating to the Bank under Russian scale at
Baa1.ru. Outlook is stable.
In October 2013, Moody's updated its credit opinion for
the Bank, leaving the ratings and outlook unchanged.
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2
MACROECONOMIC
ENVIRONMENT IN 2013
Global economy
Russian banking sector
The year under review saw continued efforts of the world
economy to overcome challenges raised by the 2007–2009
global economic crisis, resulting in better situation in general, with some emerging economies slowing down.
The American economy posted considerable growth. The
European debt crisis is still far from over — in 2013 Italy
continued facing serious problems, while it will take more
years to overcome the crisis in Spain, Portugal and Greece.
France and Germany stood apart in the European economic
situation and their basic industries showed output growth
in some basic manufacturing sectors. In the year under
review, the Chinese economy was slower than in 2012,
while being still an influential player in its region.
There were 923 running credit institutions registered in
Russia as of 31 December 2013 against 956 as of the yearstart 2013. Loss-making banks increased to 88 from 55 in
the year under review, while total loss went up to RUR18.7
billion from RUR9.4 billion.
A tougher banking regulation and supervision policy pursued by the Bank of Russia was a crucial trend of the reporting year in institutional environment of the Russian banking sector.
Consolidation of credit institutions continued in the year
under review, and five major bankers increased their proportion in banking assets to 52.7% from 50.3%, with slower
rates of growth reported within the whole sector to 16.0%
from 18.9%.
As before, the funding base of the banks was derived chiefly from personal deposits in 2013. Rates of growth in
deposit raising continued almost as in 2012 to account for
19.0% (20.0% in 2012).
Loans prevailed within the banking asset structure in
2013. And corporate lending volume was higher than personal lending.
In 2013, rate of growth in personal lending posted a decline to 28.7% from 39.4%, while unsecured consumer loans
grew a 40% slower. Such a situation was attributable mainly to new rules imposed by the Bank of Russia towards
regulation of the consumer lending market. So, for example, provisioning requirements for unsecured consumer
loans were changed as from 1 March 2013, and higher
exposure ratios were imposed as from 1 July 2013. The
banks sought to mitigate credit risks and ensure better
quality for the personal lending portfolio.
Russian macroeconomic environment
During the year 2013, the real economy, investment and
trading continued its downward trend, with the external
market conditions still being negative. The GDP slowdown,
crisis developments in industry and agribusiness, stagnation in the housing market, lower consumer demand and
heavy burden of outstanding loans on the population triggered the debt crisis. The year 2013 saw the continuing
trend of capital outflow from Russia. And by the end of this
year, there was a trend towards a weaker rouble.
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2013 ANNUAL REPORT
US GROSS DOMESTIC PRODUCT (US GDP) TREND
% to the same period in the previous year
8
6
2.8
4
2.4
2.8
1.9
2
0
0.4
-2
-2.4
-4
-6
-8
31.12.08
31.12.09
31.12.10
31.12.11
31.12.12
31.12.13
EUROZONE GROSS DOMESTIC PRODUCT (EUROZONE GDP) TREND
8
6
4
2
2.0
0.6
0.0
0
-0.4
-2
-0.7
-4
-4.1
-6
-8
31.12.08
31.12.09
31.12.10
31.12.11
31.12.12
31.12.13
RUSSIA'S GROSS DOMESTIC PRODUCT (RUSSIA'S GDP) TREND
8
6
5.6
3.4
4
4.0
2
4.3
1.3
0
-2
-4
-7.9
-6
-8
31.12.08
31.12.09
31.12.10
31.12.11
31.12.12
31.12.13
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3
FINANCIAL HIGHLIGHTS
AND MAIN RESULTS FOR
THE YEAR 2013
As of the reporting year-end, Agropromcredit Bank’s assets
increased by RUR6.8 billion, or by 28%, with total assets
amounting to RUR31,387 million.
Net outstanding loans went up to RUR19.5 billion (or by
RUR5.6 billion) for the reporting year.
Early in 2013, the authorised share capital was
1 890 000 000 Russian roubles. However, the Annual General Meeting held on 15 May 2013 decided to increase its
share capital to 2 240 028 000 (Two billion two hundred
forty million twenty eight hundred) Russian roubles from
1 890 000 000 (One billion eight hundred ninety million)
Russian roubles through an additional issue of ordinary
registered book-entry shares.
Total liabilities of the Bank were RUR28.6 billion, including corporate and personal deposits which were RUR23.3
billion as of the year-end.
Shareholders’ equity of the Bank was RUR3,512 million
as of 31 December 2013.
For the year under review, pre-tax profit was RUR482.7
million (against RUR116.4 million for the previous year).
Upsurge in positive financial performance was due to
well-balanced and diversified sources of income of the
Bank, that cover all its business segments and ensure
immunity of the financial result to fluctuations in financial
and economic situation. Earning from corporate lending
and personal lending, foreign exchange, and fee and commission income made much impact on profitability of the
Bank.
All the mandatory legal ratios applicable to Agropromcredit Bank were fully in compliance with requirements of
the Bank of Russia in the year under review and as 31
December 2013 were as follows:
)) Capital adequacy was 12.0 against the standard allowed
of 10 or higher
)) Acid test ratio was 95.0 against the standard allowed of
15 or higher
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)) Current liquidity ratio was 159.8 against the standard
allowed of 50 or higher
)) Long-term liquidity ratio was 89.0 against the standard
allowed of 120 or lower.
In November 2013, Moody’s Investors Service updated the
credit opinion on Agropromcredit Bank and leﬅ unchanged
all the ratings assigned to it before and the outlook too.
Key events of the year 2013
January
)) Agropromcredit Bank started the year 2913 with an
event in financial education donating a collection of
books of the Economic Chronicle of Russia series to libraries and higher schools in Russian provinces.
)) The Bank expanded the lending programme on preferential terms and conditions.
)) The Kurgan branch celebrated its 10th anniversary.
February
)) The Orenburg branch marked its 11th anniversary.
)) Agropromcredit Bank increased the self-certified loan
amount up to RUR250,000.
)) The Bank launched a new service — refinancing of loans
made by any Russian bank.
)) Agropromcredit Bank offered privileged lending terms
and conditions for employees from 16 insurance companies, comprising major federal and regional insurers
with a positive record of service in the domestic insurance market.
2013 ANNUAL REPORT
ASSETS
in RUR millions
31,387
30,000
27,279
24,586
25,000
20,842
20,000
19,725
18,118
17,821
20,680
18,030
14,985
15,000
10,000
5,000
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
SHAREHOLDERS’ EQUITY
in RUR millions
4,0
3,512
3,5
2,867
3,0
3,049
3,068
3,097
2010
2011
2012
2,374
2,5
2,0
1,5
3,152
1,826
1,828
2005
2006
1,629
1,0
0,5
0
2004
2007
2008
2009
2013
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3
FINANCIAL HIGHLIGHTS
AND MAIN RESULTS FOR
THE YEAR 2013
March
May
)) The second part of books from the Economic Chronicle
of Russia series was donated by the Bank to libraries in
provinces.
)) Agropromcredit Bank entered the internet acquiring
market — a new service was launched by the Kurgan
and the Tyumen branches.
)) The Bank offered its customers the Gold Crown-based
money transfers.
)) The Kemerovo branch was winner of the Kusbass Brand2012 contest in the Best Kusbass Brand-2012 category
within the Credit Financial Services group.
)) Agropromcredit Bank was ranked among the best offers
from the Moscow-based banks, according to Banki.ru
information analytical agency.
)) The Bank registered in Odnoklassniki.ru and Vkontakte.ru
social media.
)) The Bank was ranked by the Territorial Investment Committee of the Main Economics and Investment Department of the Altai Territory among credit institutions
recommended for cooperation with local companies raising loans through funding of a part of the banking interest rate from the territorial budget.
)) The Bank took part in the XXVIII Annual General Meeting
of the Association of Regional Banks of Russia.
)) Agropromcredit Bank was the winner of the 20 Least
Credit Card Overdue Debt Banks rating, according to
Banki.ru information analytical agency.
April
)) Agropromcredit Bank reduced the monthly payment on
credit cards to 5%.
)) Terms and conditions of the Maximum deposit were
updated — a major change was a new deposit maturity
of 2 years.
)) The management of the Bank took part in the XXIV
National Convention of the Association of Russian Banks.
)) The consumer loan of the Bank was ranked as the best
offer from the Moscow-based credit institutions, according to Banki.ru information analytical agency.
)) Customers of the Bank were offered credit cards with a
70,000 self-certified limit with no requirement to submit
a certified copy of the employment record.
)) The Kurgan branch launched a chain of POS terminals
intended for utility payments within the Kurgan Region.
)) Agropromcredit Bank offered better terms and conditions on general consumer loans under the For You.
The Big plan and the Family plan intended for customers
with a positive credit history at other banks.
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JUNE
)) The Bank was the winner in the High Social Efficiency
Bank category at the Kemerovo-based Kusbass Financial
Market-2012 regional contest.
)) Special terms and conditions were offered by the Orenburg Branch to corporate customers.
)) Marking its 19th anniversary, Agropromcredit Bank
arranged Financial Literacy Days in areas of its business
presence.
)) The lending period under three tariff plans was extended.
)) The Bank was ranked among 50 Top Most Popular Banks
in Russia, according to Market Leader internet journal.
)) Agropromcredit Bank reduced its loan interest rates.
)) The Bank updated the terms and conditions for internetbased payments and expanded its SMS-Service.
)) The Surgut branch celebrated its 12th anniversary.
2013 ANNUAL REPORT
July
October
)) A new sub-office of the Surgut branch was opened in
Kogalym.
)) The credit card under the Confidential Gold tariff was
ranked among the three top gold credit cards, according
to Banki.ru information analytical agency.
)) The Bank issued the Annual Report for the year 2012.
Net profit under international financial reporting standards for such reporting year posted a tenfold increase
as compared to the previous year.
)) Internet-based acquiring network of the Bank was
expanded, with an agreement being entered into with
the Unified Settlement and Information Centre of the
Yamalo-Nenets Autonomous District in Salekhard.
)) Alexander Tkachenko was appointed the general manager of the Nizhny Novgorod branch.
)) Agropromcredit Bank entered into an agreement with
SME Bank on a RUR100m credit facility.
)) Agropromcredit Bank launched an improved line of
deposit products.
)) The Bank was affiliated as a full member of the Public
and Municipal Payment National Information System.
)) Moody's rating agency updated the credit ratings of the
Bank, leaving them unchanged.
)) The Bank started offering consumer loans at a reduced
interest rate to borrowers that purchased life insurance
and disablement insurance policies.
)) The Bank joined the Unified Bank Guarantee Register.
November
)) The Bank announced to launch a bond issue.
)) An additional issue of shares of the Bank was registered
by the Bank of Russia.
)) A new teller office was opened in Orenburg.
)) Agropromcredit Bank announced privileged lending
terms and conditions for customers with a positive credit history.
)) The Chelyabinsk branch celebrated its 10th anniversary.
)) Agropromcredit Bank improved its terms and conditions
for credit cards by covering all kings of debit transactions with a grace period.
)) The Maximum deposit was ranked the forth in the 10 Top
Recurring Deposits under 11% p.a. rating, according to
Kommersant Money weekly.
)) Marina Dubinina was appointed the general manager of
the North-Western branch.
)) Internet-based acquiring services of the Bank were
launched for consumers of the Night Hockey League
online store.
)) Car loan of the Bank was ranked among the 10 Top
Loans without CASCO for new foreign made cars being
made by Moscow-based banks and was the seventh
according to Banki.ru information analytical agency.
September
December
)) A 2% discount on loans was offered by the Bank to all its
Saratov-based customers.
)) Agropromcredit Bank expanded its internet-acquiring
chain in the Yamalo-Nenets Autonomous District.
)) A new Motor Rally. Partner Plan car loan was launched.
)) The Bank launched its new Businessman consumer loan
intended specially for business owners.
)) The interest rate was reduced by 2 points at an office in
Saratov in the For you.The Big loans and Family loans
intended for customers employed by Saratov Distribution Networks.
)) Elena Zhigalova was appointed the deputy general
manager of the North-Western branch.
)) The Chelyabinsk branch became winner of an independent Southern Urals Financial Pride award in the For a Positive Image of Banks among the Population category.
August
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4
CORE BUSINESS
SEGMENTS
IN 2013
DEVELOPMENT STRATEGY
In 2013, our strategy was based on
three cardinal principles as follows:
1
Better banking products and new
product line development
New product offers favour increased customer base and
allow to maintain customer loyalty. By pursuing a well-reasoned credit policy and entering new market segments, the
Bank created in 2013 a new specialised credit product
intended for sole traders and business owners, and opened
a new lending segment — loan refinancing.
In pursuit of our risk management goals, the Bank identified a new class of borrowers such as Bona Fide Borrower
from a Third Party Bank, to which money is lent on favourable terms and conditions. In order for the borrowers to
be granted wider opportunities, the Bank provided an
extended term of mortgage loans and a 3% lower monthly
repayment to cardholders.
2
Sustainable funding
base formation
A solid funding base is a prerequisite for lending development at the Bank. In 2013, the Bank continued making
efforts to launch new payment and settlement products
aimed at keeping and expanding such base. In particular,
integrated offers were prepared comprising a set of banking products and services. Therefore, the customers were
able to make all financial transactions in a prompt and convenient fashion both at the Bank offices and online.
Throughout the year under review, 1,964 users were connected to the Internet Banking system. Total customers
served via Internet were 4,271 individual clients and 2,851
corporate clients.
96
3
Better business
efficiency
Within the reporting year, the Bank was engaged in activities to promote career enhancement of the staff and their
motivation for better performance. A new incentive system
is being prepared at the Bank, and in-house and off-premises staff trainings were conducted.
At the same time, efforts are made to ensure better operating efficiency of the Bank — to meet customer demands
for high quality service requires continued improvement in
technological capabilities.
CORE BUSINESS SEGMENTS IN 2013
Main business segments of the Bank were as follows:
)) Corporate banking
)) Personal banking
)) Securities trading and the interbank market.
In the year under review, Agropromcredit Bank focused on
the following priority business segments:
)) Corporate and personal lending
)) Trade finance and documentary business
)) Interbank lending
)) Raising deposits from corporates and households
)) Cash and settlement services
)) Handling payment cards
)) Electronic banking services for individual and corporate
clients.
2013 ANNUAL REPORT
PERSONAL
BANKING
In 2013, the Bank served more than 150,000 individual
customers. As of the year-end, there were 134,870 existing
agreements on banking services entered into with individual clients (including term deposits, special card accounts
and current accounts).
Personal deposit balances were RUR14,319 million as of
the reporting year-end, including term deposit balances
amounted to RUR13,421 million and special card account
balances, to RUR898 million.
Lending
Personal lending has invariably been a prime business segment in the banking services for individual clients. In the
year under review, the Bank offered much better lending
terms and conditions, making the loans more accessible
and convenient both for target customer groups and a wide
range of prospective borrowers.
Leading products within the line of consumer loans were
loans under the Family and For You.The Big tariff plans.
During the reporting year, pin-point tuning of the product
line was conducting, and therefore the lending offer became more diversified.
As from the year-start, the Bank identified a particular
class of customers, such as Bank's Partner Company Staff
with respect to personal lending. Loans were made under
preferential terms and conditions. There were over 40 companies in this segment, in particular, such major federal
enterprises as Rostelecom, Russian Railways, LSR Group,
Surgutneﬅegaz, among others.
By pursing a well-reasoned lending policy and designating new marketing-oriented client segments, the Bank
offered better terms and conditions in general consumer
loans intended for customers with a good credit history
from any other bank. In 2013, the Bank set a new class of
borrowers such as — Bona Fide Borrower from a ThirdParty Bank, to which loans were made on preferential
terms and conditions.
With respect to customers from the Sole Traders and
Business Owners class, the Bank prepared a particular Businessman credit product, which allows the clients to take
loans for their consumer purposes.
In order for the lending offers to be more attractive for
conventional classes of clients such as Payroll Customer
and Backbone Customer, the Bank conducts special sales
promotions allowing the customers to take loans on privile-
ged terms and conditions. For example, in the reporting
year such borrowers were able to take consumer loans for
a term up to seven years under the Family tariff plan. And
the basic interest rate for the loan remained at the level of
the interest rate applicable to the 5-year loan.
In the reporting year, changes also took place in mortgage loans — clients were able to take much larger loans
under a deed of pledge of its real estate, with the term of
the loan being extended from 5 to 7 years.
A new service such as loan refinancing was launched in
the year under review. Borrowers were able to refinance
loans taken at any Russian bank with a new loan from Agropromcredit Bank to be made on more preferential terms
and conditions.
Through minimisation of its clients' expenses, the Bank
reduced in 2013 the monthly repayment on its credit cards.
Now, the monthly repayment of the principal accounts for
5% instead of 10% for both prospective customers and the
existing cardholders.
In 2013, the Bank launched a special-purpose plan in life
insurance and disablement insurance of the borrowers.
When an insured event occurs, the insurance company
covers the customer's debt to the Bank, while the loan is
provided to insured borrowers at reduced rates.
Outstanding debt in personal loans in terms of all types
of lending stood at RUR7,115.1 million as of the end of the
reporting year (as compared to 4,636.4 million a year before). Loan portfolio posted a 53.5% rise.
Money Transfers
The Bank offers fund transfers and money orders in favour
of individuals and corporates in Russian roubles, US dollars
and Euros. The year 2013 saw continued increase in partner entities, in which favour the Bank accepts payments
from natural persons on a regular basis.
In the reporting year, the Bank sent and paid money
orders via payment systems such as Western Union (RUR,
USD, EUR), Privat-Money (RUR, USD, EUR), CONTACT (RUR,
USD, EUR) and Gold Crown (RUR, USD, EUR).
As from March 2013, the Bank initiated payments through the Gold Crown — Money Transfers payment system. It
has a positive record of service in all areas of business presence of the Bank and allows to transact a notable volume
of money orders in favour of individuals nationwide and
abroad.
97
4
CORE BUSINESS
SEGMENTS
IN 2013
PERSONAL LOAN PORTFOLIO BREAKDOWN FOR 2013
%
89.8%
6.1%
4.1%
consumer loans
car loans
mortgage loans
4.1
6.1%
%
89.8%
However, the Bank stopped payments via Privat-Money
as from September 2013 due to a reduced demand for
such services and an access to another payment systems
the Bank cooperates with.
Annual income in RUR-based money transfers through
payment systems reported a 33% increase. Total commission and fee income in such money transfers amounted to
RUR1,047,290, US$27,229 and €1,657.
The Bank made 20,231 money transfers as a whole,
including:
)) Transfers in Russian roubles — for RUR355,156,972
)) Transfers in US dollars — for US$5,105,179
)) Transfers in Euros — for €384,563.
Therefore, money transfers transacted within the year
reported a 60% increase. In terms of amount of the transfers, there was the following trend:
)) Transfers in Russian roubles rose by 74%
)) Transfers in Euros increased by 23%
)) Transfers in US dollars decreased by 14%.
Personal Deposits
In 2013, the term deposit market remained bullish within
the first nine months of the reporting year, however the last
quarter saw a general downward trend in the banking sector towards decreasing demand for deposit services.
98
Nonetheless, the bank succeeded to have personal deposit
volume increased by 25%. Personal balances were
RUR14,318.7 million in the reporting year.
In October 2013, the Bank optimised the line of term
deposits to boost sales of deposit products. Maturity was
extended for the Maximum deposit (to 2 years from
3 months in all currencies), the Energy deposit was updated
with new threshold amount scales. Thus, depositors were
able to have the interest rate increased by contributing
additional amounts to their deposits.
As of the end of the reporting year, the line of term
deposits comprised its five types. Their terms and conditions are clear and transparent for a variety of customers,
that are, households, pensioners, and VIP clients.
The term deposit portfolio was RUR13,420.9 million as
of the end of the year under review.
Payment Cards
Agropromcredit Bank is a VISA International principal
member (as from 2007) and a MasterCard Worldwide affiliate member (as from 2003). In 2013, the Bank continued
issuing and handling payment cards from such systems —
throughout the year, 29,394 cards were issued (with card
replacements), including 18,439 new ones.
As of the reporting year-end, total cards in issue were
52,855 in number. Many of them were issued under payroll
schemes (in 2013 the Bank handled 610 such schemes).
2013 ANNUAL REPORT
PERSONAL TERM DEPOSIT BREAKDOWN FOR 2013
%
84%
8.98%
7.01%
0.01%
Russian roubles
(11,273 million)
US dollars
(RUR1,205 million)
Euros (RUR940.6 million)
British pound sterling
(6 million)
0.01%
7.01
%
8.98%
84%
Total balances on special card accounts were RUR127.3
million as of 31 December 2013. During the year, average
monthly balances on card accounts were RUR412.9 million.
Sales promotions
In 2013, the Bank hit record sales promotions and specialised
activities. Within the year, there were 11 regional product promotions (including two promotions as a lottery) and three
nationwide promotions to support sales of consumer loans.
Moreover, seven image promotions aimed at enhancing
Agropromcredit Bank's brand awareness and customer
loyalty took place.
Promotions arranged jointly with our partners
In 2013, the Bank, together with partner companies, continued implementing a discount plan which allowed holders
of cards issued by the Bank to get discounts and additional
privileges when paying for goods and services in restaurants, travel companies, hotels, jewellery stores, beauty
salons and spa centres. In the year under review, the chain
of partner companies increased almost by 30% and continues its steady expansion.
In order for the partner programme to be supported,
during February and March 2013, the Bank conducted a
Spring Complimentary Giﬅ promotion where its participants
got giﬅ certificates with notable discounts (up to 40%) for
goods and services from partner companies.
As from December 2012 to March 2013, sub-offices of
the North-Western branch conducted a Summer Vacations
as a Giﬅ promotion for individual customers. Gold bonus
cards of the Rodeo Drive water park (Saint Petersburg)
were donated to every borrower of the Bank which took
consumer loans within such period.
Such sales promotions took place in Kolomna in May and
December 2013 — corporate discount cards and tasty giﬅs
were given by a partner store to every customer which
placed a deposit or took a loan with the Kolomna branch.
In November 2013, the Orenburg branch conducted a
Driver Day promotion — those who visited regional suboffices of the Bank in Orenburg, Buguruslan, Buzuluk and
Orsk for a purpose to take a loan or to make a transfer for
RUR100,000 or more, were given a discount card from a
chain of Orenburgneﬅeproduct petrol-filling stations. As of
the end of the year, the Surgut branch jointly with Audi Service Surgut car dealer centre conducted a Gainful New Year
Giﬅ with Agropromcredit Bank promotion. Within the period
from 9 to 31 December, customers taking a loan from the
Bank were given a discount from such dealer for luxury cars
up to RUR250,000.
Sale promotions in support of banking products
From 12 August to 31 October 2013, the Orenburg branch
conducted a promotion for whose clients which placed a To
the Country House, For a Luck deposit up to RUR50,000 for a
6 month term or more, were able to take part in a lottery to
win valuable accessories for the countryside vacations.
99
4
CORE BUSINESS
SEGMENTS
IN 2013
PERSONAL ACCOUNT BALANCES
in RUR millions
14,319
15,000
10,898
12,000
10,205
9,937
9,000
6,000
3,000
2,035
5,158
5,698
2007
2008
6,412
3,847
0
2005
2006
2009
2010
2011
2012
2013
PERSONAL TERM DEPOSIT PORTFOLIO
in RUR millions
13,421
14,000
12,000
10,000
9,374
9,106
2010
2011
10,106
8,000
5,425
6,000
4,000
2,000
2,942
3,882
2006
2007
4,636
1,273
0
2005
2008
2009
2012
2013
OUTSTANDING PERSONAL LOANS
in RUR millions
8,000
6,730
7,000
7,115
6,669
6,000
4,636
4,740
5,000
4,248
4,000
3,000
2,699
2,586
2,872
2010
2011
2,000
1,000
0
2005
100
2006
2007
2008
2009
2012
2013
2013 ANNUAL REPORT
OUTSTANDING CAR LOANS
in RUR millions
3,712
4,000
3,188
2,954
3,000
1,839
2,000
1,579
0,939
1,000
0,437
0,403
0,298
2011
2012
2013
0,355
0,317
0,292
2011
2012
2013
0
2005
2006
2007
2008
2009
2010
OUTSTANDING MORTGAGE LOANS
in RUR millions
1,671
1,800
1,500
1,071
1,200
0,970
0,908
0,900
0,702
0,600
0,300
0,308
0
2005
2006
2007
2008
2009
2010
OUTSTANDING CONSUMER LOANS
in RUR millions
6,386
7,000
6,000
5,000
4,021
4,000
3,000
2,277
2,000
1,000
0,698
0,995
1,041
2,114
0,756
0,417
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
101
4
CORE BUSINESS
SEGMENTS
IN 2013
Special terms and conditions were offered to clients who
placed a Retirement deposit worth RUR30,000 to be eligible
for the lottery.
In August 2013, a Hit the Mark promotion took place in
Chelyabinsk on occasion of the 10th anniversary of the
Chelyabinsk branch. Customers which placed or replenished a deposit for RUR70,000 or more, and those who took
a loan or a credit card for RUR70,000 or more were eligible
to take part in the promotion. Aﬅer the agreement has
been entered into, every participant received a branded giﬅ
with the logo of the Bank.
The Win a Car lottery was a relevant sale promotion of
the year 2013 — residents of Surgut, Kogalym and Neﬅeyugansk were able to get a new Seat Leon car. Those who
placed a deposit with the Bank and took a credit card under
the Premium tariff plan were eligible to participate in the
lottery. The drawing of the lottery took place on 14 March
2014 to mark the 20th anniversary of the Bank.
Within the period from June to late October, the Bank
conducted a Privileged Loans for Depositors promotion
where preferential lending terms and conditions under the
For You tariff plan, the For You.The Big tariff plan and the
Confidential tariff plan for issue of payment cards with a
grace period were offered to its participants. Those who
kept their deposits with the Bank at least for a 6-month
term and an amount of RUR50,000 or more (or a foreign
currency equivalent) were eligible to take part in the promotion.
The Kurgan branch conducted a promotion to spur credit
product sales among corporate staff of companies from the
Backbone Customer class. A gainful offer was made to
those clients which took consumer loans from 17 June to
30 September 2013 under the For You and the For You.
The Big tariff plans — at an interest rate of 2 points less.
A similar promotion took place in the Orenburg branch
from 2 September to 31 December of the year — the Pervomayski teller office reduced by two points the interest
rate under the For You and the For You.The Big consumer
loans for Saratov Distribution Network corporate staff.
Based on interim results of those promotions, the Bank
started late October 2013 a nationwide promotion aimed
at spurring sales of credit products by corporate staff of
companies from a Backbone Customer class. When taking
the For You.The Big and the Family consumer loans, the
interest rate for such customers was reduced by two interest points. Under the promotion, an additional advantage
was offered — when buying a life insurance policy and a
disablement insurance policy the customer was eligible to
get a reduced interest rate by one point. As of the end of
the reporting year, a decision was made to continue with
the promotion up to the end of the year 2014.
In November 2013, the Bank launched the last nationwide promotion of the year with reference to credit products
on occasion of the 2014 Sochi Winter Olympics. The customers were offered a 20% discount from the initial interest
rate under the For You.The Big and the Family consumer
loans. Those customers which bought a voluntary insurance
policy at the Bank were eligible to get a discount.
102
Promotions for corporate customers
Between September and November 2013, the Nizhny Novgorod branch offered its clients a special offer — all companies, institutions and sole traders which visited the Bank
during the promotion, were eligible to open an account free
of charge and get preferential terms and conditions. Given
positive results of the promotion, the Bank decided to continue with it till the third quarter of 2013.
Within the period from 13 December 2013 to 31 January 2014, the Chelyabinsk branch conducted an Open a
Business Account Free of Charge and Get Initial Registration
with the iBank2 System as a Giﬅ promotion for small and
medium companies. Companies incorporated in Chelyabinsk city and the Chelyabinsk Region were eligible to take
part in it.
Promotions in partnership with Visa International
In the year under review, the Bank was a proactive participant in marketing plans arranged by Visa payment system.
Their purpose was to stimulate card issue, increase card
transaction volumes and enhance customer loyalty with
respect to products and services of the Bank. During longterm promotions, issue of Visa cards raised by 30%, and
card transaction volume also reported an increase.
Under the cooperation with Visa International in 2013,
the Bank conducted more than ten sales promotions, and
Visa cardholders of the Bank were their winners more than
once.
In April and June, within the Visa Gold Season Opened
promotion, all customers of the Bank which got a Visa Gold
card and paid a purchase up to RUR15,000 using it, were
participants of the lottery to win the main prize — a travel
to Milan, the world fashion capital, and a €1,000 prize.
In April 2913, within the Shopping Week joint promotion
with Visa International, holders of Visa Gold and Visa Platinum cards issued by Agropromcredit Bank, got discounts
up to 40% in more than 100 stores of the Moscow-based
European shopping centre.
During the night from 18 to 19 May, clients of the Bank
using Visa Gold, Visa Platinum, and Visa Infinite cards were
able to visit most popular museums free of charge. In the
Night in a Museum promotion 15 Moscow museums took
part, and every holder of Prime Visa cards was able to visit
museums without standing in queues — it was quite sufficient just to show its card.
Between June and September 2013, holders of Visa
cards issued by the Bank were offered discounts at the Coffee House catering chain from 5% to 15% depending on
the card class. Moreover, our Visa cardholders took part in a
car lottery.
From 1 July to 31 August 2013, the Bank and Visa International conducted a joint Pay Using Visa Card and Get a
Chance to Win a Prize promotion. A customer of the Tyumen
branch was among the winners.
From July 2013, the holders of Visa cards issued by the
Bank were able to take part in the Visa Bonus discount plan
that allowed to save money when paying for the services
with the payment card. More than 100 companies thro-
2013 ANNUAL REPORT
PAYMENT CARDS HANDLED BY THE BANK
AS OF THE YEAR-END 2013
Visa
MasterCard
TOTAL
49,616 cards
3,239 cards
52,855 cards
94%
6%
100%
6%
94%
ughout Russia offered to Visa Bonus participants discounts
and bonuses for goods and services purchased using such
cards at stores, pharmacies, hotels, restaurants and coffee
shops and other Visa partners.
In August of the reporting year, the Bank invited all our
Visa cardholders to the IV annual Lexus Hybrid Art exposition which took place in Manezh Central Exhibition Hall in
Moscow. Holders of Visa Gold and Visa Platinum cards issued by the Bank were able to visit the exposition every day,
and, in addition, free excursion were offered to them.
From 1 November to 31 December 2013, Visa cardholders were eligible to get a refund for purchases taking part
in the Visa Will Pay for Your Giﬅs promotion. To take part in
it, it was quite sufficient for any client of the Bank to make
at least one card transaction. Through a lottery, winners
were determined, and a client of the Perm branch was
among them. A maximum possible amount to be refunded
under the terms and conditions of the promotion was
RUR30,000.
On 3 November 2013, holders of Visa premium cards
were offered a unique opportunity to visit most popular art
sites in Moscow that took part in the Art Night project free
of charge and without queues. Holders of Visa premium
cards were eligible to visit museums and art galleries free
of charge and without queues, including one companion.
From 20 December 2013 to 20 February 2014, our Visa
cardholders were offered to take part in the From Shopping
to Vacations promotion. Clients which paid purchases using
Visa card in Dubai (United Arab Emirates) were able to win
travel certificates worth RUR100,000 from a famous travel
company.
Promotions jointly with money transfer systems
In 2013, the Bank together with the Gold Crown-Money
Transfers payment system conducted twice the Giﬅ for a
Transfer sales promotions. Any client of the Bank which
made a money transfer for RUR1,000 or more was eligible
to get a giﬅ. Customers of the Altai, the Kemerovo, the Kurgan, the Orenburg, the Perm, the Surgut and the Tyumen
branches took part in the promotion.
In June 2013, the Agropromcredit Bank and CONTACT
payment system announced the start of the Summer with
CONTACT promotion.
Clients of the Bank which made money transfers to Abkhasia, Azerbaijan, Kazakhstan and South Osetia via CONTACT system before 31 August, were able to get a 25%
refund from the transaction fee. Such amount was transferred to the mobile phone account of the customer. In addition, during the promotion, tariff plans were reduced for
money transfers to Georgia, Kyrgyz Republic and Moldova.
Fee to be charged for the transfer was a mere 1%. During
the promotion, every its participant was able to get a discount for unlimited number of money transfers.
103
4
CORE BUSINESS
SEGMENTS
IN 2013
CORPORATE
BANKING
In 2013, Agropromcredit Bank served over 10,000 companies and institutions. Customers of the Bank were enterprises from core industries of the national economy such as
power generation, machinery, metallurgy, transport and
construction.
As the Bank deems high quality comprehensive services
its top priority target, it offers to its corporate customers a
wide spectrum of sought-aﬅer banking services such as
payments and settlements in Russian roubles and in foreign
currencies, cash transactions, documentary business, business payment cards, payroll schemes, merchant acquiring,
placing of customers' idle funds, lending and business
finance, forex transactions, trading in securities, arrangements in raising finance in the securities market, and custodian services.
Raising corporate deposits
By placing idle corporate funds from Russian companies,
Agropromcredit Bank strives to develop a mutually rewarded cooperation, ensuring safety and growth of customers'
funds.
As of 31 December 2013, volume of funds raised from
corporate customers was RUR5,335 million, with total corporate balances being RUR 8,936 million as of the end of
the reporting year.
Corporate lending
In the reporting year, the Bank made loans to corporates
and sole trades in Russian roubles and in foreign currencies. Short-term loans and medium-term loans were of top
priority.
The number of the existing agreements entered into
with corporate customers was 466, including 374 agreements of the branches as of the year-end. The corporate
loan portfolio was RUR9,801.36 million. Most volume in this
portfolio was reported at branches as follows: the Surgut
branch, the Tyumen branch, the Kemerovo branch and the
Perm branch.
The corporate loan portfolio reported an 11% rise, and
there was an increase by 36% at the head office. Most
growth in the loan portfolio was reported at branches such
as the Chelyabinsk branch, the Perm branch and the Urals
branch.
INTEREST INCOME FROM LOANS MADE
Entities
Private commercial entities
Private non-commercial entities
Sole traders
Non-resident corporates
Commercial entities owned by the federal Government
Government-run commercial entities (save those owned by the federal Government)
Total
104
RUR thousands
1,133,551
599
2,136
3,039
605
3,537
1,143,467
2013 ANNUAL REPORT
CORPORATE DEPOSITS RAISED
in RUR millions
6,899
7,000
5,598
6,000
5,335
5,000
4,000
2,529
3,000
2,000
2,596
3,287
2,841
2,868
2,344
2,004
1,000
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
BUSINESS AND CURRENT ACCOUNT BALANCES
in RUR millions
10,000
7,435
8,000
6,000
6,382
8,476
5,339
4,961
4,605
4,000
4,764
3,601
3,699
2,552
2,000
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
7,633
8,149
2011
2012
2013
TOTAL CORPORATE BALANCES
in RUR millions
15,375
16,000
10,722
12,000
8,000
8,386
7,490
7,445
7,935
8,936
6,043
4,000
0
2004
2005
2006
2007
2008
2009
2010
2013
105
4
CORE BUSINESS
SEGMENTS
IN 2013
OUTSTANDING CORPORATE LOANS
in RUR millions
9,801
10,000
8,848
7,216
8,000
6,000
6,013
5,247
7,474
7,012
6,325
4,000
4,525
4,341
2009
2010
2,000
0
2004
2005
2006
2007
2008
In the reporting year, the Bank made loans amounted to
RUR49,551.21 million, interest income from loans made to
corporates and sole traders was RUR1,143.47 million.
The Bank aimed at both increasing quantitative lending
figures, improving the existing products and developing
new solutions in response to customer demands. The policy
pursued in 2013 by the Bank in corporate lending mainly
depended on the current market conditions and was directed towards:
)) continued high quality of the loan portfolio
)) minimised credit risks in all stages of the lending process
)) optimised interest rate policy and reduced interest rate
on loans
)) continued promotion of the existing and development of
new credit products and technologies
)) creating opportunities to make timely decisions.
With a view to minimise credit risks when processing new
loan applications, a priority was given to those borrowers
which had positive credit history, good financial standing
and were able to pledge a liquid collateral. Much attention
was paid to pre-assessment of the financial standing of the
borrower and the loan security. Only readily marketable
property was accepted as a security, and the borrower was
interested in its safety. Efficiency of the borrower's business, profit margin of the project to be financed, availability
of a collateral, sustained movement on bank accounts were
the deciding factor.
Within the year 2103, Agropromcredit Bank offered its
corporate clients credit products as follows:
)) overdraﬅs
)) credit lines with a pre-set 'disbursement limit', 'outstanding limit', and 'disbursement and outstanding limit' to
purchase new motor vehicles and equipment, for working capital gaps, construction projects and purchase of
real estate
106
2011
2012
2013
)) loans to take part in tenders or auctions for delivery of
goods, works and services to meet national or municipal
demands if the participation in the tender or the auction
required a money contribution in favour of the arranger
)) lump-sum loans
)) bank guarantees to take part in auctions or tenders,
customs warranties, and guarantees for VAT payments.
Throughout the year under review, efforts were made to
maintain in-house documents at a level to allow reduced
credit risks at all lending stages. In response to amendments to applicable law, relevant adjustments were made
to by-laws of the Bank such as the Regulation on Corporate
Loan Impairment Provision, the Regulation on Corporate
Lending and the Regulation on the Credit Committee of the
Bank.
Support to small and medium
businesses
In 2013, the Bank continued with its efforts under agreements entered into with SME support foundations. Throughout the year, there were existing agreements entered
into in 2011 as follows — those made by the Orenburg
branch with the Guarantee Foundation for Orenburg
Region-based Small and Medium-Size Enterprises non-profit organisation and by the Kemerovo branch with the
Government-run Kemerovo Region-based Business Support Foundation. In addition, in the reporting year, an agreement was entered into with SME bank under the SME support programme in Moscow and in provinces.
Funding to SME was made to support innovation, modernisation and energy-efficiency projects.
2013 ANNUAL REPORT
FINANCIAL
MARKETS
In the reporting year, persistent efforts were made in financial markets, maintaining our reputation of a reliable
counterparty. In this year, Agropromcredit Bank focused on
security trading, the money market and the forex market
within this segment.
Money market
In 2013, the Bank made loans and raised borrowings in the
interbank market. In addition, there was a notable volume
of arbitrage transactions taking advantage of a price difference between interest rates in the interbank market and
cost of funding in the foreign exchange swap market. In the
reporting year, the Bank was a net lender in such market.
Total turnover in the interbank lending market for the
year 2013 was RUR49.66 billion, including RUR41.23 billion
from interbank borrowings and RUR8.43 billion from placings.
With a view to mitigate credit risks, Moscow Exchange
was elected as an interbank trading marketplace. Therefore, there was much greater volume in forex swap transactions in this respect. Through such trading, the Bank was
proactive both in borrowings and placings which were also
used in arbitrage deals.
As in the previous years, the Bank adopted, as usual, a
conservative approach to election of counterparties in the
interbank market, giving the preference to counterparties
from major Russian banks with a high international rating.
Within the reporting year, the Bank proactively cooperated
with counterparties such as the Bank of Russia, Saving Bank
of Russia, Alfa-Bank, UniCredit Bank, Promsvyazbank, Raiffeisenbank, Credit Bank of Moscow, MDM Bank and Bank
Petrocommerce.
The Bank entered into 106 master agreements on
cooperation in the foreign exchange market and in the
money market as of the end of the year.
Forex market
In 2013, the Bank was quite active in the forex market trading in three key world currencies such as US dollar, Euro
and British pound sterling.
It was also engaged in purchase and sale of foreign currencies both for itself and subject to customer orders.
Freely available currencies were much used to ensure
funding for current transactions, and if required, banknote
deals were transacted in favour of the head office and the
branches.
Foreign currency transactions
In the reporting year, the Bank continued with its foreign
currency transactions, swap trading, banknote business and
cash exchange. In the year under review, total volume amounted to over RUR7.18 billion in this segment.
Trading in securities
In the reporting year, the Bank continued as a vigorous
player in the securities market, adopting a conservative
approach to selection of issuers and instruments. The Bank
prepared a securities portfolio efficiency concept based on
a liquidity cushion and vigorous trading portfolio to achieve
a higher net profit margin than that of the model portfolio.
In 2013, securities trading comprised purchase of securities in favour of the trading portfolio of the Bank with a view
to short-term and mid-term placing of spare funds. The
securities portfolio was used on a regular basis to finance
current transactions via repos with the Bank of Russia.
The bond portfolio of the Bank was kept almost unchanged in 2013. In the portfolio formation, as before, emphasis
was placed on bonds with maturity under two years issued
by the Russian Ministry of Finance, or prime banks and corporate issuers. The bond portfolio was slightly reduced in
volume between August and September 2013, which was
stemmed from a scheduled repayment of some securities
and their presentation for an offer. Within November and
December 2013, the bond portfolio volume was recovered.
107
4
CORE BUSINESS
SEGMENTS
IN 2013
BOND PORTFOLIO FOR THE YEAR 2013
in RUR millions
7,000.00
6,000.00
5,000.00
4,000.00
3,000.00
2,000.00
1,000.00
SECURITIES PORTFOLIO BREAKDOWN AS OF THE END OF THE YEAR 2013
%
4.1
%
61%
4.1% bonds
34.9% Government securities and
61%
108
bonds issued by sub-federal
entities
corporate papers and bonds
issued by commercial banks
34.9%
01.01.14
01.12.13
01.11.13
01.10.13
01.09.13
01.08.13
01.07.13
01.06.13
01.05.13
01.04.13
01.03.13
01.02.13
01.01.13
0.00
2013 ANNUAL REPORT
The decreased portfolio of discounted bonds in the
second quarter of 2013 was attributed to a lower net profit
margin on bank promissory notes (Savings Bank, Alfa-Bank,
VTB Bank) and reallocation of funds into other money market instruments.
The Bank vigorously used repo deals — portfolio-backed
lending to ensure additional funding for the trading. Total
volume of repo trades in 2013 was RUR179.82 million, where
the main volume of transactions fell on trading with the Bank
of Russia which offered the most attractive cost of funds.
Promissory note programme
In 2013, interest-bearing and discount promissory notes of
the Bank remained sought-aﬅer and popular financial
instruments. As profitable and liquid instruments they were
intended to invest spare funds, and also can be used a
means of payment.
Over the reporting year, Agropromcredit Bank issued 94
promissory notes for a total amount of RUR808 million. It is
worth noting that many clients repeatedly used these promissory notes as a collateral which continued to earn income within the terms of the loan.
Bond issue
In August 2913, Agropromcredit Bank registered an issue
of documentary interest-bearing non-convertible bearer
bonds of A series subject to be deposited with a centralised
custodian and eligible to be repaid by their holders'
demand.
The bonds were placed by public subscription. The tenor
was the 1,092nd (One thousand ninety second) day from
the date of the offering. The volume in terms of face value
was RUR1,500,000,000. The face value was RUR1,000, with
3-year maturity. Every interest-bearing coupon period was
182 (One hundred eighty two) days. An offer on the issue
was provided for one year aﬅer the placement. The placement and circulation of the bonds were scheduled for the
year 2014 and will be made on the MICEX Stock Exchange
marketplace. The book runner of the issue was Raiffeisenbank.
109
4
CORE BUSINESS
SEGMENTS
IN 2013
CORRESPONDENT
BANKING
In the reporting year, Agropromcredit Bank made vigorous efforts to streamline its correspondent relations with clearing
banks and counterparties in the interbank market.
The Bank had 45 clearing accounts, including 10 vostro accounts and и 35 nostro accounts as of the end of the year
under review.
Moreover, the Bank had 106 master agreements entered into with credit institutions on borrowings, placings and other
transactions in the interbank market as of 31 December 2013.
DOWNSREAM CLEARING BANKS
(as of 31 December 2013)
No.
Account
Bank
1
2
3
4
5
6
7
8
9
10
Vostro
Vostro
Vostro
Vostro
Vostro
Vostro
Vostro
Vostro
Vostro
Vostro
Roubliov Bank, Moscow, Russia
Roubliov Bank, Moscow, Russia
Commercial bank Forshtadt, Orenburg, Russia
SB Bank (Sudostroitelny bank), Moscow, Russia
National Collateral Bank, Dolgoprudny, Moscow Region, Russia
Credit Bank of Moscow, Moscow, Russia
Sotsium Bank, Moscow, Russia
Sibneﬅebank, Tyumen, Russia
110
Currency
RUR
USD
RUR
USD
EUR
RUR
RUR
RUR
RUR
RUR
2013 ANNUAL REPORT
UPSTREAM CLEARING BANKS
(as of 31 December 2013)
No.
Account
Bank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
18
Nostro
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
Nostro
Branch 4, Moscow, Russia
Bank Petrocommerce, Moscow, Russia
Gazprombank, Moscow, Russia
Otkritie Bank, Moscow, Russia
Otkritie Bank, Moscow, Russia
SME Bank, Moscow, Russia
SredneRusskiy Bank of Savings Bank of Russia, Moscow, Russia
SredneRusskiy Bank of Savings Bank of Russia, Moscow, Russia
RUSSLAVBANK, Moscow, Russia
VTB Bank, Saint Petersburg, Russia (for settlements within VISA payment system)
VTB Bank, Saint Petersburg, Russia (for settlements within
Western Union payment system)
VTB Bank, Saint Petersburg, Russia (for settlements within
Western Union payment system)
Payment Centre clearing non-banking entity. Moscow, Russia
UniCredit Bank, Moscow, Russia
UniCredit Bank, Moscow, Russia
Vnesheconombank, Moscow, Russia
Commerzbank AG
VTB Bank (Deutschland) AG
RDB-Bank, Minsk, Belarus
Geobank, Moscow, Russia
National Clearing Depository, Moscow, Russia
National Clearing Depository, Moscow, Russia
ZapadnoSibirskiy Bank of Savings Bank of Russia, Moscow, Russia
ZapadnoSibirskiy Bank of Savings Bank of Russia, Moscow, Russia
Savings Bank of Russia, Moscow, Russia
Currency
RUR
RUR
USD
EUR
RUR
RUR
USD
RUR
USD
EUR
RUR
USD
RUR
USD
EUR
RUR
RUR
USD
RUR
USD
EUR
USD
GBP
USD
EUR
EUR
CHF
CNY
BYR
RUR
RUR
USD
RUR
RUR
RUR
111
4
CORE BUSINESS
SEGMENTS
IN 2013
REGIONAL BRANCHES
As of the reporting year-end, regional chain comprised 11 branches and 38 offices located in five out of the totality of eight
federal districts nationwide.
Branches of the Bank are opened in cities and towns such as Barnaul, Yekaterinburg, Kemerovo, Kurgan, Nizhny Novgorod, Orenburg, Perm, Saint Petersburg, Surgut, Tyumen and Chelyabinsk.
Regional branch network in 2013
11
31
3
3
1
112
branches
sub-offices (30 in 2012)
teller offices (2 in 2012)
off-premises teller offices
back office
2013 ANNUAL REPORT
RISK MANAGEMENT
POLICY
Risk management policy of the Bank is based on a comprehensive and unified in-house approach to how all material
risks are identified, its methodology and measurement procedures are prepared and such exposures are mitigated
and monitored.
Banking business is dependent in many respects on
national macroeconomic situation, in particular, pace and
nature of structural reforms in the economy, level of inflation, domestic currency exchange rate, oil prices, official
bank rate and rates for legal reserves imposed by the Bank
of Russia. In addition, political changes have an impact on
the securities market, the money market and the financial
market nationwide, and affect the investment climate, capital inflow and national economy upsurge.
There are also several in-house factors making an
impact on strategy formation of the Bank. The most important is corporate governance quality. Top priority is to
shape an up-to-date governance system adequate to the
scale and complexity of the business and meet the relevant
international standards.
The Bank faces risks inherent in all Russian credit institutions. Main risks are credit risk, liquidity risk, foreign exchange risk, interest rate risk, market risk and country risk.
Comprehensive efforts are made to ensure risk management arrangements based on efficient internal control and
compliance with prudential standards imposed by the Bank
of Russia.
Credit risk
The Bank defines credit risk as a risk of losses caused by
non-performance, delayed performance or misperformance by the debtor of its financial liabilities to the Bank.
Credit risk is assumed on credit-related transactions
entered into with all counterparties (corporates, financial
institutions and individual customers), including those related to a variety of lending products, issuing guarantees,
confirming letters of credit, purchasing debt securities,
investing into claims, making bullion and securities loans,
hire selling or purchasing financial assets (delivery of financial assets), and with respect to lease and factoring
payments.
Credit risk is the most crucial challenge for banking institutions. Credit risk was managed at the Bank along the following lines:
)) setting limits on transactions
)) setting credit limits on borrowers/counterparties; on
groups of related borrowers; by
countries/industries/regions; on trading in debt securities, etc.
)) providing security with respect to credit-related transactions
)) monitoring exposures to be assumed by the Bank and
delivering the relevant management reporting to the
Credit Committee, the top executives and business units
concerned
)) assessing the regulatory capital and the economic capital to cover exposures assumed on transactions and
ensuring their adequacy
)) hedging transactions.
As to credit risk management arrangements, the Bank followed recommendation made by the Bank of Russian and
the Basel Committee on Banking Supervision. Independent
business unit of the Bank is in charge of monitoring on a
regular basis compliance with banking regulations and risk
management procedures.
Country risk
Country risk is an exposure related to changes in economic,
social and political conditions of the country where the
Bank conducts its business. Political and economic situation
in Russia can be assessed as sustained in the medium term.
The domestic economy has its specific features inherent in
emerging nations. These are lack of convertibility of the
national currency, quite low liquidity at stock exchanges and
the OTC securities markets and rather high level of inflation.
The investment rating given to Russia suggests that the
economic situation is improving, and therefore, the country
risk is going down.
In case of negative changes in national situation, the
Bank will make every efforts to protect its customers' interests.
113
4
CORE BUSINESS
SEGMENTS
IN 2013
Agropromcredit Bank is exposed to such risks as much
as any other Russian bank. Country risks are assessed
depending on risk levels assigned to any particular country,
and are beyond the control of the Bank.
If a state of emergency is imposed or strikes are called in
the country or any region, the Bank will perform its obligations in compliance with applicable law and state of emergency rules.
Risks related to geographical patterns of the country
(higher exposure to natural disasters, potential interruption
in transportation owed to extreme weather, etc.) are minimal.
Market risk
When managing market risks, the Bank follows requirements imposed by regulations of the Bank of Russia, and
applies in-house scenarios in compliance with recommendations of the Basel Committee on Banking Supervision, in
particular, those related to the economic capital which is
subject to reserve provision to cover market risks.
Market risks comprise the price risk, the foreign exchange risk and the interest rate risk.
The price risk means an exposure to lower income and
potential losses due to adverse changes in market prices of
securities.
Instruments established to manage the price risk at the
Bank are as follows:
)) control over compliance with limits set on trading in
securities
)) monitoring the stock market behaviour.
The foreign exchange risk is an exposure to lower income
and potential losses caused by adverse changes in exchange rates of foreign currencies.
Instruments established to manage the foreign exchange
risk at the Bank are as follows:
)) regulation of the foreign exchange position.
114
Key drivers of the interest rate risks are as follows:
)) maturity gap with respect to assets, liabilities and offbalance sheet claims and obligations related to fixed
rate instruments
)) maturity gap with respect to assets, liabilities and offbalance sheet claims and obligations related to variable
rate instruments (exposure to interest rate renegotiation)
)) fluctuations in yield curve with respect to long and short
positions in financial instruments from one issuer, generating exposure to loss if potential expense is greater
than income when closing such positions (yield curve
exposure)
)) frequency gap with respect to fluctuations in interest
rates related to borrowings and placings of the bank (for
fixed rate financial instruments if they have a matched
maturity)
)) basis exposure or frequency gap related to changes in
interest rates (for floating rate instruments if the floating
interest rate is adjusted with equal frequency).
Instruments to manage interest rate risk at the Bank are
as follows:
)) setting limits and monitoring compliance with them in
securities trading
)) monitoring the interest rate position
)) opportunities to make timely adjustments to interest
rates with respect to borrowings or placings
)) opportunities to use floating interest rates.
Owing to the risk management system in place at the Bank,
interest rate risk exposure was kept within the safety margins and, therefore, did not have impact on quality and
timely performance of its obligations.
2013 ANNUAL REPORT
Liquidity risk
Other risks
Liquidity risk is the main risk affecting the ability of the
Bank to perform in due time and in full its obligations to
holders of securities it issued.
Maintaining the balance sheet structure in compliance
with the requirements and liquidity ratios (in-house and
prudential ones), while being monitored on a regular basis
by the relevant business units and collective governance
bodies allows the Bank to meet in full and in due time its
obligations, including those related to principal payments
and interest service in favour of holders of securities issued
by the Bank.
To mitigate adverse impact of the risk, the Bank complies with statutory liquidity ratios imposed by the Bank of
Russia, and in-house ratios established by the corporate
risk management system.
Applicable Russian law is quite complicated and ambivalently construed, and the court practice is contradictory.
Therefore, it results in rulings which prevents from executing court orders. In addition, practical application of some
Russian tax law lacks experience, that can lead to increased
tax-related risks and, therefore, more expenses for the
issuer bank and the securities holders. There is also a risk
of changes in tax law to the detriment of taxpayer interest.
The Bank regards the reputation risk as exposure to loss
caused by reduced customer (counterparty) base owing to
a negative image of the bank’s financial solvency, its quality
of services or business nature in general. No situations
have occurred in business activities of the Bank posing
threat to its reputation since its inception. The Bank has
always placed emphasis on delivering high-quality and failsafe banking services. Even when the financial crisis broke
out, the Bank continued making in time both customer and
proprietary payments in favour of its depositors and creditors.
The strategic risk is defined by the Bank as exposure to
loss caused by errors in making decisions crucial for the
business development strategy. Such risk suggests miscalculations in potential threats to the Bank’s activities,
wrongly or deficiently defined promising areas of business,
lack or deficiency of resources and arrangements or their
deficiency to meet strategic goals of the Bank.
Under the fierce competitive environment, the Bank
adopts an in-depth approach to its development strategy
formation. It suggests increased scale of transactions and
enhanced competitive positions along the core segments of
banking business both in conventional services and new
services which were much developed recently in Russia
(investment banking, lending, raising funds from international capital markets).
Operational risk
The operational risk is defined as an exposure to loss owing
to inadequacy in relation to the nature and the scale of the
business of a credit institution or incompliance with applicable laws and regulations, by-laws and in-house procedures to conduct banking transactions and other trading,
abuse by the staff or any other persons (caused by incidental or willful act or omission), deficiency in functional capabilities, data storage, technological and other systems in
place at the bank, or their disruption, or due to external
events.
To manage the operational risk, the Bank uses on a regular basis procedures ensuring risk identification, assessment, control and mitigation measures. When managing
such risk, the Bank follows principles set forth in regulations of the Bank of Russia (including Circular No. 76T “On
arrangements with regard to operational risk management
at credit institutions” of 24 May 2005), and papers of the
Basel Committee on Banking Supervision.
115
4
CORE BUSINESS
SEGMENTS
IN 2013
HARDWARE AND SOFTWARE
COMPLEX
The Information and Banking Technology Department focused in 2013 on projects aimed at enhanced quality and efficiency in banking transactions, improved data protection
systems and optimised cost for proprietary IT infrastructure maintenance.
Mastering customer service
By following the customer-oriented development strategy
of the Bank, a new Client Relationship Management system
was developed and tested in 2013. It allowed to centralise
and expedite the application processing by storage of the
customer-related information and the relationship history.
Such data will be used in the future to develop optimum
products lines and pursue the customised tariff plan policy.
In the year under review, a Credit Conveyor, namely, an automated loan application processing was put into operation intended to enhance volume, quality and efficiency in personal lending. Such Credit Conveyor means remote submission of loan
applications and provision of insurance policies to the borrowers.
A module was implemented to improve the customer service, that allows to receive, dispatch and make online processing of applications for a loan directly at the car dealer's shop
or any other point of sale where a credit agent has an office.
In the reporting year, an integrated module for computerised workstation was implemented to make the Gold
Crown-based and Western union-based transfers. Therefore, the customers were able to make instant money orders.
Data protection
Throughout the reporting year, several projects were
undertaken subject to the programme to improve the IT
infrastructure and data resources of the Bank.
The data migration continued from branch-based automated banking system (ABS) to the head office in order to create
a unified information space and the centralised ABS. Physical
servers consolidation and their conversion into a virtual infrastructure were close to be finished. Virtualisation led to
increased level of efficiency in using hardware, reduced cost
of server farm maintenance and less power consumption.
Main telecommunication equipment was replaced at the
head office. Backup routers and switch boards were installed, and clustering and backing up of mission-critical servers was made. Such activities resulted in greater reliability
and higher throughput of the telecommunication equipment used in all core business segments of the Bank.
116
FortiGate Firewall high performance multifunctional
platform from Fortinet company was implemented at all
branches and offices of the Bank to ensure greater level of
protection for the telecommunication network. Such platform allowed to prevent virus activity, denial-of-service
attacks and other network threats.
Compliance with regulatory requirements
Some follow-up revision of the information systems was
made to ensure compliance with laws and regulations.
The SMS message functionality to inform customers on
account movements was upgraded within the remote banking
systems to meet the requirements set forth in Federal law No.
161-FZ “On National Payment System” dated of 27 June 2011.
Customer profile control and update system was implemented to comply with Federal law No. 115-FZ “On antimoney laundering and anti-terrorism financing” in terms of
client identification.
A scheme to contact the State information system on central government and municipal payments was put into operation
in compliance with Federal law No. 210-FZ “On arrangements
in delivery of central government and municipal services”.
Requirements set forth in Circular No. 176-T of the Bank
of Russia “On information to the Federal Tax Service about
legal entities under liquidation and those liquidated” were
complied with, and the Bank was able to control customers
in terms of their attribution to such class of companies.
Priority of payments from the client's account was adjusted
to the extent that there are several incoming payment claims
or writs of execution with no sufficient funds on the customer's
account. The list of priorities was reduced to five from six to
meet requirements of Federal law No. 343-FZ “On amendments to Article 855 of Part Two of the Russian Civil Code”.
A journal was developed to record documents subject to
direct debits.
An additional functionality was implemented to crosscheck customers' credit histories using requests to Equifax
Credit Services bureau.
An historical data-based system was developed and
implemented to check up and protect corporate electronic
payments from fraudulent transactions.
Throughout the reporting year, access to Internet Banking was granted to 1,964 users (including 1,356 individuals
and 608 corporates). Total individual customers served via
Internet were 4,271, and corporate customers were 2,851,
as of the end of the year. And a Threat Detector module was
implemented in 2013 within the iBank2 system.
2013 ANNUAL REPORT
ADMINISTRATION AND
HR MANAGEMENT
Total staff as of 31 December 2013 was 1,126 employees,
including 352 (31.3%) at the head office and 774 (68.7%)
at the branches.
From the totality of the staff:
)) 46% were employees aged between 25 and 35
)) 82% were university graduates
)) 47% of the staff had their length of service in the banking industry above five years
)) 45% of the staff were employed with the Bank above
three years.
Professional training and career
development
A comprehensive permanent training system was established at the Bank comprising in-house training, on-side training and distant training to maintain high level of vocational qualification and improve professional know-how
among our corporate staff. Regular learning programmes
in use encouraged enhanced motivation and team spirit of
the staff.
In 2013, career training and development programmes
covered all classes of employees — from senior managers
of business units up to grass-root staff, both at the head
office and at branches.
The number of those trained at reputable banking schools, training centres and refresher courses under partnership programmes of the Bank reported a 20% rise in the
reporting year as compared to 2012. Target group were
accountants, lawyers, experts in financial monitoring, staff
from treasury, operations department, internal control, etc.
Throughout the year under review, 50 employees from
the head office took refresher courses, which was a 7% rise
against the previous year figures.
The year 2013 saw positive changes in the structure of
participants which were trained under external learning
programmes. If in 2012, 86% were heads of business units
and a mere 14% were grass-root staff, however in 2013,
the grass-root staff proportion amounted to 22%. It means
that learning programmes ensured more coverage for all
classes of employees.
In-house training courses were being implemented at
the Bank on a regular basis. It allowed to arrange the training process in terms of any particular goal to be met by a
business unit, to give prompt response to organisational
changes and mitigate exposures facing the Bank. In 2013,
all 11 branches were involved in on-site training and distant
training under in-house learning programmes.
Within the reporting year, about 500 employees were
trained, or a 29% increase as compared to 2012.
Compulsory training courses under modular programmes from series such as Management Competence, Planning and Efficient Administration, and Operations Control
Technologies were an attraction for 85% of the executive
staff.
In-house trainer preparation programmes were gathering momentum, and in 2013, such trainers conducted
workshops and practical courses for professionals in Information Technologies, Financial Monitoring and Retail Sales.
Training and certification of cashiers were being conducted
on a regular basis — 48 employees were trainees throughout the year.
Distant training for the corporate staff was also successfully developed. An electronic data base was created to the
effect, comprising 21 courses and 8 tests to cover core
business segments of the Bank. Such data base is available
at the corporate intranet site. Using it, staff members were
able to pass tests, to assess its competence level and to get
professional knowledge.
Staff evaluation
Staff evaluations take place at the Bank on a regular basis.
There were 80 evaluation procedures carried out in 2013
among cashier office staff, asset monitoring regional staff
and retail segment staff.
HR reserve formation
Efforts were being made towards reserve formation of professionals prepared for higher appointments with a view to
improve HR efficiency at the branches. In 2013, 2% of
employees from the HR reserve were promoted to new
positions in the organization hierarchy.
117
4
CORE BUSINESS
SEGMENTS
IN 2013
Staff selection and adaptation
Staff motivation
Defining real needs of business units for professional staff
of a variety of qualifications and capture of candidates
which meet the Bank's requirements in terms of their career record, was a key target for the HR Division. Efficient
combination between the external recruitment methodologies and those used for promotions from in-house HR
reserve to fill vacancies ensured high performance figures
in staff selection for 2013.
In the reporting year, most sought-aﬅer professionals
were in customer relationship and client capture segments — heads and staff of business units engaged in retail
sales, SME sales, managers in customer service and customer liaison, and IT skilled staff.
Partnership cooperation with education centres was proactively developed, and the Bank took part in Career Days
at higher schools and colleges. Executives and staff of the
Bank hosted Financial Literacy Days, conducted open lessons and lectures at partner higher schools in order to
enhance our image as an attractive employer.
The Bank continues cooperating on a regular basis with
higher vocational education centres and vocational schools
towards external HR reserve formation from students and
graduates. Branches of the Bank expanded its business
cooperation with education centres such as Urals Higher
School of Management, Tyumen State University, the
Kemerovo branch of the Moscow State University of Economics, Statistics and Informatics, Institute of Economics and
Business within Tyumen State Oil and Gas University, Surgut Institute of World Economy and Business 'Planet', the
Orenburg branch of Moscow Technological Institute, Orenburg State Institute of Management and Saint Petersburg
Industrial and Economic College.
An on-the-job training and internship were arranged for
most promising university students at our business units in
order to capture most talented and giﬅed graduates for
permanent employment. Over the reporting year, more
than 50 students were on internship at the Bank.
Much attention was paid to new staff adaptation issues,
and their probation period and qualification assessment
were monitored. In order for the beginners to adapt to new
environment, the HR Division prepared the Quick Reference
Guide for Newly Employed Staff.
Efforts made by the HR personnel were highly appreciated by experts — the Bank was ranked as the Most Attractive Employer, according to Superjob.ru agency.
Enhanced job efficiency and productivity of the staff, the
duly-arranged motivation and bonus award system have
become top priority components of the HR policy. The year
2013 saw enhanced requirements by the Bank to financial
motivation management, new motivation scheme development and a brand new level of financial incentive methodologies.
Throughout the reporting year, methods of motivation
and financial incentive for the retail staff were being improved. The HR Division by joint efforts with the Retail Product
Division prepared and implemented the Regulation on Staff
Motivation in Entering into Insurance Policies with Borrowers within the Lending Programmes.
Creating a competitive advantage in the marketplace by
offering a more valuable remuneration package to the staff
was an important activity of the HR Division in the year
under review. To get timely and accurate information on
the employment market trend, the Bank traditionally was
an active participant in preparations of annual reviews of
compensations offered by third party companies. Based on
such data, the Bank revised the staff compensation level,
and in 2013, it took part in a new compensation review project carried out by HeadHunter company.
Some projects were successfully implemented in 2013
towards improved planning and control over application of
payroll budget, arrangements were made to ensure job
measurement and more efficient usage of business hours.
The Bank consistently pursued a philosophy of switching
the staff to a universal and broad specialisation, and output
standards were prepared and established in this respect. All
such activities allowed to deal with such a large amount of
work by the available staff with no impairment in quality.
The HR Division advised staff members from branches
on a regular basis on complicated personnel issues — webinars and workshops took place in 2013 on compliance with
labour law and HR document execution.
118
2013 ANNUAL REPORT
MANPOWER
employees by branches
Nizhny Novgorod branch
Perm branch
Urals branch
North-Western branch
36
22
45
39
55
Chelyabinsk branch
47
352
Altai branch
Head office
57
Kemerovo branch
72
Kurgan branch
146
115
Tyumen branch
Surgut branch
140
Orenburg branch
Head office
Branches
TOTAL
352
774
1 126
31%
69%
100%
119
4
CORE BUSINESS
SEGMENTS
IN 2013
SPONSORSHIP AND
CHARITY
Agropromcredit Bank builds its business for the benefit of
the community. Its executive management opted for such
approach as a strategic priority. Sponsorship and charity
activities has been a crucial component of the Bank's activities throughout its 20 years of history. For a long time we
have shown our dedication to community values through
efficient usage of sponsorship projects and socially relevant
projects as an instrument to manage the corporate reputation.
In 2013, remarkable performance results allowed the
Bank to expand and diversify its sponsorship and charity
programmes, where activities in support to child care centres and projects in culture, art, sports and education were
of top priority.
The Bank put special emphasis on charity for kids. Over
the reporting year, Agropromcredit Bank sponsored children’s parties and took part in promotions in favour of orphans. Financial assistance to sport activities has been an
important component of our activities in charity and sponsorship for many years. The Bank traditionanly supports
sport clubs, professional and amateur teams, regional sport
events and local initiatives in active leisure and healthy
living.
Sponsorship and charity projects
in 2013
)) Agropromcredit Bank started the year with an event in
financial literacy — a collection of books from the Economic Chronicle of Russia series were donated to libraries and higher schools in Russian provinces.
)) The Kurgan regional philharmonic society was supported
by the Bank during the new concert season 2013.
)) With the support of the Kemerovo branch, Olga Makeyeva's private gallery in Kemerovo held a benefit event for
the pupils of boarding school No. 27 as a mentee of the
Bank.
)) Agropromcredit Bank took part in the Financial Literacy
Day in Barnaul.
)) The Bank was the general sponsor of the Pan-Russian
National Hockey Cup Games among clubs with team
members born between 1997–1998 years.
120
)) The Chelyabinsk branch was a partner to open the
second Sinnabon coffee-room from the world famous
chain of coffee and bakery shops.
)) The Bank sponsored the annual Journalist of the Year2011 contest among mass media in Surgut.
)) Andrey Nikolishin, star hockey player, provided financial
counseling for customers of the Bank.
)) Experts from the Orenburg branch conducted some lectures for students from Orenburg Institute of Business
and Politics within the Economics department week.
)) The Bank in the Kids' Eyes drawing contest was held at
the Orenburg branch.
)) Agropromcredit Bank took part in the 68th track-andfield relay race in Chelyabinsk on occasion of the WW II
Victory Day.
)) The Orenburg branch of the Bank took part in St. George
Ribbon event.
)) Agropromcredit Bank supported the 73th regional trackand-field relay race in Kurgan.
)) The Agropromcredit Bank is Our Helper and Friend drawing contest was held at the Chelyabinsk branch.
)) The Bank sponsored the official launch of TymenFree
WiFi network in Ishim and Tobolsk.
)) The Bank won the Kusbass Financial Market-2012 contest
held in the Kemerovo Region in the High Social Efficiency
Bank category.
)) The Tyumen branch hosted the Financial Literacy Week.
)) Agropromcredit Bank took part in the opening of InstaFlash photo exhibition in Tuymen.
)) In Kurgan, the Bank sponsored the Wider Circle charity
event.
)) Agropromcredit Bank was the general sponsor of the
Russian Youth Day celebration in Buguruslan, the Orenburg region.
)) The Youth Day was celebrated in Tuymen with the sponsorship of the Bank.
)) Agropromcredit Bank took part in the prize-giving ceremony of the Siberia as a Land of Happy Peoples photo
contest in Tuymen.
)) The Bank supported a gala concert staged in the central
square of Chadrinsk on occasion of the Town Day.
)) Agropromcredit Bank sponsored the annual Harvest2013 trade fair festival in Surgut.
2013 ANNUAL REPORT
)) The Bank congratulated the Kurgan residents on occasion of the Town Day and once again sponsored three
event-related places.
)) Agropromcredit Bank congratulated pupils of school No.
10, grammar schools No. 17 and No. 21 in Kemerovo
with the Knowledge Day.
)) The Chelyabinsk branch hosted an exposition of
paintings for general public.
)) The VI Annual mini-football tournament, traditionally
staged with the support of the Bank, took place in Kemerovo.
)) The Surgut branch of the Bank took part in the Town Day
and the Oil and Gas Worker Day celebrations in Neﬅeyugansk and Kogalym.
)) The Buguruslan municipal administration delivered a letter of gratitude to the Bank for its cooperation and contribution to the town development.
)) Within the Third Age Day celebrations, Agropromcredit
Bank held a charity event in Kemerovo for the WW II
veterans. The Bank donated an annual subscription for
Our Countrymen in Kusbass newspaper.
)) The Financial Literacy Days were celebrated in the Urals,
Sub-Volga and Siberia federal districts by the Bank.
)) The Kurgan city administration gave thanks to the local
branch staff for efficient cooperation in festivities dedicated to the Town Day.
)) Jointly with the Association of Commercial Banks of the
Orenburg region, Agropromcredit Bank held a round
table dedicated to financial literacy at the Orenburg
State Agrarian University.
)) The Bank was the general sponsor of the theatre season
in Buguruslan.
)) Agropromcredit Bank again supported the Journalist
Exploit contest in Magnitogorks — winners and nominees were awarded with commemorative diplomas, cash
bonuses and giﬅs. ChelyabEnergo company (a branch of
Interregional Distributive Grid Company of Urals) was a
partner of the contest.
)) Staff of the Bank took part in the Financial Literacy Week
held by the Chelyabinsk branch of the Russian Presidential Academy of National Economy and Public Administration.
)) The Chelyabinsk branch of the Bank was declared winner
of the independent Southern Urals Financial Pride award
in the For the Positive Image of Banks among the Community category.
)) A contest for the best Christmas-tree decoration was
held at the Chelyabinsk branch. Pieces of work made by
kids were exhibited at the contest, and they become a
beautiful ornament of Christmas trees displayed at our
offices in Chelyabinsk and Magnitogorsk. All participants
were given branded giﬅs from the Bank.
)) In anticipation of the New Year 2014, the Kemerovo
branch of the Bank congratulated the pupils of the local
boarding school No. 27 on occasion of the upcoming
celebration. 120 pupils were presented with the Christmas giﬅs by the Bank.
121
5
OUTLOOK FOR
2014
Agropromcredit Bank focuses on further strengthening its
positions in the financial market by offering new innovative
products and services, developing partnership relations with
counterparties and customers, capturing them for comprehensive
services.
Plans of the Bank include achieving more streamlined
network of customer offices, and opening more offices at
regional branches. The Bank is determined to pursue a policy aimed at keeping the existing clients and expanding the
customer base, and plans to maintain and further strengthen its positions in conventional segments such as interbank trading, lending, cash and settlements. Those measures ensure sustainable sources of funding for future income
of the Bank. Additional income is scheduled to earn from
electronic services and other hi-tech products.
Financial markets
In 2014, outlook of the Bank will, to a great extent, depend
on factors making a great impact on the Russian financial
sector, namely:
)) Restructuring process initiated by the Bank of Russia in
2013 with a view to establish a financial market megaregulator
)) Standards imposed by the Basel Committee on Banking
Supervision in terms of bank capital requirements (the
Third Basel Accord)
)) Law “On consumer loans” came into effect on
1 July 2014
)) Expanded list of transactions was approved subject to
requirements to report to the National Settlement
Depository which started acting as a repository in February 2013
)) The Bank of Russia made consistent efforts towards
financial rehabilitation of the banking sector, including
identification of core banks and more preventive supervision.
122
In this connection, the Bank's treasury will focus in 2014 on
improved job efficiency, compliance with new regulations,
optimising the correspondent banking network and clearing banks in the money market and the forex market.
Interbank cooperation
In 2014, the Bank is going to continue with interbank
cooperation, expand the number of counterparty banks,
increase unsecured loan counter-limits. Preference will be
given to those banks which are among the 150 Top Russian
Banks in Terms of Total Assets.
Corporate banking
The Bank is going to continue making loans to the real economy sectors such as manufacturing and agribusiness
companies, and developers.
In 2014, activities under agreements entered into with
SME support foundations will be further developed. The
main goal is to create favourable environment for a sustainable development of entrepreneurship in Russian provinces based on efficient mechanisms to ensure its financial
support.
2013 ANNUAL REPORT
Personal banking
Sponsorship and charity
As in the prior year, the Bank will focus on development of
consumer lending programmes. Offer of products will be
further improved by their target tuning and business terms
and conditions.
Under the economic situation which is becoming more
complicated, an emphasis will be placed on bona fide borrowers of the Bank and those borrowers with regular income — staff from backbone companies and payroll clients of
the Bank, and public sector employees.
Development of the Bank in harmony with the environment
is a key driver to success. Charity projects remain an important segment of the banking management aimed at supporting the consumer confidence in the Bank and its services, and therefore, at achieving success in business.
The Agropromcredit Bank's brand has, over many years,
been associated by customers with striking events and
good mood — in 2014 the Bank will continue supporting
municipal festivals, culture and sports events in all cities
and towns of its business presence.
In the new period, the Bank will go on cooperating with
the Automobilist hockey club, being its titular sponsor.
And, no doubt, the practice of many years to support
child care centres under the sponsorship of the Bank will be
continued.
The Bank will focus on holding Financial Literacy Days
for the general population and students, and on taking part
in ad-hoc symposiums, round tables and other educational
projects held by local media.
Hardware and soﬅware complex
The Information and Banking Technology Department plans
for 2014 to launch some key projects, with the upcoming
Client Relationship Management system being the most
crucial of them. Much attention will be paid to creating a
loan application submission system via our corporate Web
site (www.apkbank.ru), optimising the unified automated
reporting system and adjusting the electronic archives to
store payment documents. As to the infrastructure, there
are targets to consolidate the server equipment, virtualise
the workstation farm, upgrade the back-up facilities and
create an infrastructure to build a standby data processing
centre.
HR management
Sales promotions
In 2014, Agropromcredit Bank is going to celebrate its 20th
anniversary. Gala events will be held on this occasion at all
its branches and offices — pleasant surprises will await
customers such as giﬅs and special marketing offers.
Moreover, a range of promotions is going to be launched to
support retail sales to target consumer groups.
In 2014, the HR Division will have the learning format
expanded — more training and practice workshops based
on video courses will be conducted, electronic library of
know how will be expanded, with the in-house trainer institute being developed,
The comprehensive adaptation system for the newly
employed staff will further be developed and implemented.
The Bank plans to prepare methodologies to evaluate staff
compensation efficiency. New methodologies will allow to
identify potential to ensure enhanced job quality and job
efficiency of the personnel.
123
STATEMENTS
1FINANCIAL
FOR 2013
6
UNDER RAS
The audit of the financial reporting of Agropromcredit commercial bank
(open joint-stock company) was conducted by ZAO KPMG under the
Russian accounting standards.
Auditors' report
To the shareholders of Agropromcredit commercial
bank (open joint-stock company)
We have audited the accompanying annual financial statements of Agropromcredit commercial bank (open jointstock company) (hereinaﬅer “the Bank”) for the year 2013.
The annual financial statements, consisting of 56 (fiﬅy six)
folios, comprise as follows:
)) Balance sheet statement (Disclosure form) as of 31
December 2013
)) Income statement (Disclosure form) for the year ended
31 December 2013
)) Annexes to the Balance sheet statement and the Income
statement, including:
• Statement on capital adequacy, provision for impairment of loans and other assets (Disclosure form) as of
31 December 2013
• Cash flow statement (Disclosure form) for the year
ended 31 December 2013
)) Notes to the financial statements.
Responsibility of the Bank for these annual financial
statements
The responsibility for preparing these annual financial statements and its fair and true view in compliance with applicable law of the Russian Federation as far as preparation of
the financial statements (annual report) by credit institutions is concerned, and for the internal control system
required to prepare these annual financial statements free
of any material misstatements owing to bad faith or errors
rests with the executive management of the Bank.
124
Responsibility of the independent auditor
Our responsibility is to express an opinion as to whether
these annual financial statements based on our audit give a
true and fair view in all material respects. We have conducted our audit in accordance with the federal auditing standards. These standards require compliance with applicable
code of conduct, and planning and conducting an audit so
as to give reasonable assurance that the financial statements are free from material misstatement.
The audit involved performing procedures to obtain audit
evidence about the amounts and disclosures in the annual
financial statements. The procedures selected depend on
the auditor’s judgment, including the assessment of the
risks of material misstatement, whether due to fraud or
error. In making those risk assessments, we considered the
internal control system relevant to the preparation and fair
and true presentation of the annual financial statements in
order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the internal control.
The audit also included evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.
We believe that the audits we have conducted give reasonable assurance so as to draw our conclusion on a fair and
true view of the financial statements.
2013 ANNUAL REPORT
Opinion
In our opinion, the accompanying financial statements
(annual report) to this Auditor’s report fairly reflect, in all
material respects, the financial standing of the Bank as at
31 December 2013 (including) and its business and financial performance for the year ended 31 December 2013
(including) in compliance with applicable law of the Russian
Federation as to preparation of the financial statements by
credit institutions.
Miscellaneous
Part 3, Article 42 of the Federal Law No. 395-1 “On banks
and banking business” dated of 2 December 1990 requires
that information on governance quality, internal control
situation, compliance with statutory ratios of a credit institution imposed by the Bank of Russia be included in the
Auditor's report. Annual financial statements of the Bank
contain information on compliance by the Bank with statutory ratios imposed by the Bank of Russia as of 31 December 2013 (including), on governance arrangements and
internal control arrangements at the Bank. There is no
information which we deemed essential to be included in
this Auditor's report with respect to such issues, as a complement to the information shown in the annual financial
statements of the Bank.
N.V. Lukashova
Director, ZAO KPMG
(power of attorney dated 1 October 2013 No. 64/13)
27 May 2014
Independent auditor's profile
Business name:
KPMG (limited liability company)
Public registration:
)) Registered with the Moscow Registration Chamber;
Certificate No. 011.585 of 25 May 1992
)) A record entry was made in the Unified Public Register of
Companies by Interdistrict Inspectorate of the Russian
Ministry on Taxes and Duties No. 39 for the Moscow City
under No. 1027700125628 on 13 August 2002;
Certificate series 77 No. 005721432.
Membership in self-regulating auditor organisation:
)) Member of the Russian Audit Chamber
)) Main registration number with the public register of
auditors and audit institutions: 10301000804.
Data on audited entity
Business name:
Agropromcredit commercial bank
(open joint-stock company)
Domicile (registered address):
5th Mikrorayon, kvartal 2, 13 Lytkarino,
Moscow Region 140083, Russian Federation
Postal address:
5th Mikrorayon, kvartal 2, 13 Lytkarino,
Moscow Region 140083, Russian Federation
Public registration:
)) Registered by the Bank of Russia; Certificate No. 2880
issued on 14 August 2009
)) A record entry was made in the Unified Public Register of
Companies by the Federal Revenue Service Department
for the Moscow Region under No. 1095000004252 on
14 August 2009; Certificate series 50 No. 010638817.
Domicile (registered address):
Office 3035, 18/1 Olympiysky Prosp.,
Moscow 129110, Russian Federation
Postal address:
Floor 31, build. C, 10 Presnenskaya Nab., Moscow 123317,
Russian Federation
125
1
6
FINANCIAL STATEMENTS
FOR 2013
UNDER RAS
BALANCE SHEET
STATEMENT
as of 31 December 2013
(Disclosure form)
(in RUR thousands)
Items
I
1
2
2.1.
3
4
5
6
6.1
7
8
9
10
ASSETS
Cash
Balances with the Bank of Russia
Legal reserves
Due from banks
Financial assets at fair value through profit or loss
Net outstanding loans
Net investment in available-for-sale securities and other financial assets
Investment in subsidiaries and affiliates
Net investment in held-till-maturity securities
Fixed assets, intangibles and inventories
Other assets
Total assets
II.
11
12
13
13.1.
14
15
16
17
LIABILITIES
Due to the Bank of Russia
Due to banks
Due to customers (non-banks)
Personal deposits
Financial liabilities at fair value through profit or loss
Debt instruments issued
Other liabilities
Provision for impairment on notional credit-related liabilities,
other losses and off-shore resident transactions
Total liabilities
18
126
As of 31
December
2013
As of 31
December
2012
727,874
472,274
231,060
1,786,272
5,150,722
19,549,475
604,910
0
100,538
2,216,995
778,138
31,387,198
802,806
559,837
248,783
1,724,817
4,329,688
13,915,053
604,563
0
218,976
2,236,040
194,395
24,586,175
3,437,188
104,119
23,254,879
14,318,739
0
901,162
806,594
2,344,030
11
19,047,167
10,897,825
0
451,227
248,168
78,080
28,582,022
104,905
22,195,508
2013 ANNUAL REPORT
Items
As of 31
December
2013
As of 31
December
2012
III.
19
20
21
22
23
24
25
26
27
EQUITY
Shareholders’ (members’) equity
Treasury shares (ownership interest)
Share premium
Reserves
Mark-to-market valuation of available-for-sale securities
Fixed asset adjustment
Undistributed profit (uncovered loss) for previous years
Net profit (loss) for the reporting year
Total equity
1,890,000
0
0
268,844
160
0
231,992
414,180
2,805,176
1,890,000
0
0
268,844
(169)
0
193,748
38,244
2,390,667
IV.
28
29
30
OFF-BALANCE SHEET COMMITMENTS
Irrevocable commitments
Guarantees issued
Notional non-credit commitments
4,785,827
164,499
0
2,931,022
498,372
25,909
Chief Executive
Vasiliy A. Kornev
Chief Accountant
Svetlana A. Khmeleva
127
1
6
FOR 2013
UNDER RAS
INCOME
STATEMENT
for the year ended 31 December 2013
(Disclosure form)
(in RUR thousands)
Items
1
1.1
1.2
1.3
1.4
2
2.1
2.2
2.3
3
4
4.1
5
6
7
8
9
10
11
12
13
14
128
Total interest income from, including:
Deposits with banks
Loans made to customers (non-banks)
Financial lease
Investment in securities
Total interest expense due to,
including:
Deposits from banks
Customer balances (non-banks)
Debt instruments issued
Net interest income (negative interest margin)
Total amendment to provision for loan impairment,
credit-related and similar liabilities, clearing account balances,
and interest income accrued,
including:
Amendment to provision for interest income impairment
Net interest income from (negative interest margin)
aﬅer provision for impairment
Net income from trading in securities at fair value
through profit or loss
Net income from trading in available-for-sale securities
Net income from trading in held-till-maturity securities
Net income from dealings in foreign exchange
Net income from foreign exchange revaluations
Income from participations in other companies
Fee and commission income
Fee and commission expense
Amendment to provision for impairment of
available-for-sale securities
For the
reporting
year
For the
previous
year
2,707,254
20,742
2,271,811
0
414,701
1,684,699
2,409,222
76,493
1,948,637
0
384,092
1,138,760
170,256
1,478,772
35,671
1,022,555
73,503
1,035,675
29,582
1,270,462
458,298
(651,781)
(6,582)
4,805
1,480,853
618,681
1,718
32,873
(6)
132,185
(90,871)
0
288,204
53,722
(6,936)
13,499
(19)
3,639
15,849
0
269,145
41,950
0
44
2013 ANNUAL REPORT
Items
15
16
17
18
19
20
21
22
23
23.1
23.2
24
Amendment to provision for impairment of
held-till-maturity securities
Amendment to provision for other impairment
Other operating income
Net income (expense)
Operating expense
Before-tax profit (loss)
Taxes accrued (paid)
Aﬅer-tax profit (loss)
Total payments from aﬅer-tax profit,
including:
Dividends
Allocations for reserves
Net profit (loss) for the reporting year
Chief Executive
Vasiliy A. Kornev
For the
reporting
year
For the
previous
year
1,157
18,775
193,671
2,004,837
1,522,103
482,734
68,554
414,180
0
0
(31,738)
1,020,535
1,860,749
1,744,333
116,416
78,172
38,244
0
0
0
414,180
0
0
38,244
Chief Accountant
129
1
6
FOR 2013
UNDER RAS
STATEMENT ON CAPITAL ADEQUACY,
PROVISION FOR IMPAIRMENT
OF BAD LOANS AND OTHER ASSETS
(Disclosure form)
Items
1
1.1
1.1.1
1.1.2
1.2
1.3
1.4
1.5
1.5.1
1.5.2
1.6
1.7
1.8
2
3
4
4.1
4.2
4.3
4.4
130
Total shareholders’ equity (capital) (RUR‘000),
including:
Total share capital, including:
Registered ordinary shares (ownership interest),
face value
Registered preference shares, face value
Treasury shares
Share premium
Bank’s reserves
Financial result on estimated equity (capital):
For the previous years
For the reporting year
Intangible assets
Subordinated loans (facilities, deposits, bonded debt)
Additional capital (part of it) involving
investors’ improper assets
Required capital adequacy ratio (percentage)
Actual capital adequacy ratio (percentage)
Actual total provision for impairment (RUR‘000),
including:
Loans, outstanding loans and similar liabilities
Other risk-bearing assets and other impairments
Contingent credit-related liabilities shown on
off-balance sheet accounts, and derivatives
Transactions with off-shore residents
As of 1
January
2013
Increase (+)/
decrease (-)
As of 31
December
2013
3,096,685
414,927
3,511,612
1,890,000
0
1,890,000
1,890,000
0
0
0
268,844
165,434
198,254
(32,820)
659
773,066
0
0
0
0
0
414,840
31,724
383,116
(87)
0
1,890,000
0
0
0
268,844
580,274
229,978
350,296
572
773,066
0
10.0
11.9
1,933,791
0
Х
Х
(482 667)
0
10.0
12.0
1,451,124
1,804,905
23,981
(461 584)
5,742
1,343,321
29,723
91,602
13,303
(27 885)
1,060
63,717
14,363
2013 ANNUAL REPORT
FOR REFERENCE
1.
1.1.
1.2.
1.3.
1.4.
Reserve provision for impairment of loans, outstanding loans and similar liabilities, including those caused by:
making loans
changed loan quality
changes in foreign currency exchange rates against the rouble as quoted by the Bank of Russia
other reasons
3,706,144
2,359,945
1,163,387
33,263
149,549
2.
Total recovery (decrease) of the reserve provision for impairment of loans, outstanding loans and similar liabilities
in the reporting period (in RUR thousands), including those caused by:
bad loan write-off
loan repayment
changed loan quality
changes in foreign currency exchange rates against the rouble as quoted by the Bank of Russia
other reasons
4,167,728
3,286
2,671,229
1,381,585
26,141
85,487
2.1.
2.2.
2.3.
2.4.
2.5.
Chief Executive
Vasiliy A. Kornev
Chief Accountant
131
1
6
FOR 2013
UNDER RAS
STATEMENT ON COMPLIANCE WITH
STATUTORY RATIOS
(Disclosure form)
(Percentage)
Items
Required
ratio
Actual ratio
At 31
December
2013
Actual ratio
At 31
December
2012
1
2
3
4
5
Capital adequacy (N1)
Quick liquidity ratio (N2)
Current liquidity ratio (N3)
Long-term liquidity ratio (N4)
Highest risk per borrower or group of related borrowers (N6)
>=10
>=15
>=50
<=120
<=25
12.0
95.0
159.8
89.0
Max 20.5
Min
0.0
11.9
117.3
135.4
79.9
Max 19.4
Min
1.6
6
7
Largest credit risk (N7)
Largest loans, bank guarantees and sureties issued by
the bank to its members (shareholders) (N9.1)
Aggregate risk on the bank’s insiders (N10.1)
Equity applied to purchase shareholdings (ownership interest)
in other corporate entities (N12)
<=800
337.3
348.6
<=50
<=3
0.0
1.2
0.0
1.5
<=25
17.1
19.4
8
9
Chief Executive
Vasiliy A. Kornev
132
Chief Accountant
2013 ANNUAL REPORT
STATEMENT OF
CASH FLOW
(Disclosure form)
(in RUR thousands)
Item
1
1.1
1.1.1
1.1.2
1.1.3
1.1.4
1.1.5
1.1.6
1.1.7
1.1.8
1.1.9
1.1.10
1.2
1.2.1
1.2.2
1.2.3
1.2.4
1.2.5
Net cash received from/applied for operating activities
Total cash received from/applied for operating activities before
amendments in operating assets and liabilities,
including:
Interest received
Interest paid
Fees and commissions received
Fees and commissions paid
Income, net of expense, from operations in available-for-sale
financial assets at fair value through profit or loss
Income, net of expense, from trading in held-till-maturity securities
Income, net of expense, from dealings in foreign exchange
Operating expense
Expense/repayment on corporate tax
Total inflow/outflow in net cash from operating assets and liabilities,
including:
Net inflow/outflow in legal reserves with the Bank of Russia
Net inflow/outflow in investment securities at fair value through
profit or loss
Net inflow/outflow in outstanding loans
Net inflow/outflow in other assets
Net inflow/outflow in loans, deposits and other balances due to the
Bank of Russia
For the
reporting
year
For the
previous
year
99,292
(91,253)
2,687,823
(1,623,665)
287,034
(54,071)
2,186,022
(976,798)
272,903
(41,373)
45,572
(6)
132,185
190,928
(1,492,838)
(73,670)
(491,292)
(8,636)
(19)
3,639
25,631
(1,475,122)
(77,500)
1,883,781
17,723
(52,955)
(792,220)
(4,624,421)
(494,884)
(297,198)
(2,575,109)
914,110
1,093,158
2 344 030
133
1
6
FOR 2013
UNDER RAS
Item
1.2.6
1.2.7
1.2.8
1.2.9
1.2.10
1.3
2
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
134
Net inflow/outflow in balances due to banks
Net inflow/outflow in corporate balances (non-banks)
Net inflow/outflow in financial liabilities at fair value through
profit or loss
Net inflow/outflow in debt securities issued
Net inflow (outflow) in other liabilities
Sub-total for Section 1 (item 1.1 + item 1.2)
Net cash received from/applied for investment activities
Purchase of securities and other financial assets identified as
“available-for-sale”
Proceeds from sale and redemption of securities and
other financial assets identified as “available-for-sale”
Purchase of securities identified as “held-till-maturity”
Proceeds from redemption of securities identified as “held-till-maturity”
Purchase of fixed assets, intangible assets and inventories
Proceeds from sale of fixed assets, intangible assets and inventories
Dividends received
Sub-total for Section 2 (sum of items 2.1 through 2.7)
For the
reporting
year
For the
previous
year
104,108
3,866,912
0
1,608,736
0
348,757
(10,425)
(392,000)
0
(35,513)
(22,320)
1,792,528
(18)
(600,322)
0
0
124,428
(16,283)
24,094
0
132,221
0
0
0
(13,773)
31,347
0
(582,748)
2013 ANNUAL REPORT
Item
3
3.1
3.2
3.3
3.4
3.5
4
5
5.1
5.2
Net cash received from/applied for financial activities
Payments by shareholders (members) to the share capital
Purchase of treasury shares
Sale of treasury shares
Dividends paid
Sub-total for Section 3 (sum of items 3.1 through 3.4)
Effect of changes in official exchange rates of foreign currencies
against the rouble as quoted by the Bank of Russia on cash and
cash equivalents
Inflow/application of cash and cash equivalents
Cash and cash equivalents at the start of the reporting year
Cash and cash equivalents at the end of the reporting year
Chief Executive
Vasiliy A. Kornev
For the
reporting
year
For the
previous
year
0
0
0
0
0
0
0
0
0
0
165,836
(93,943)
2,833,964
2,740,021
(45,394)
1,164,386
1,669,578
2,833,964
Chief Accountant
135
STATEMENTS
2FINANCIAL
FOR 2013
6
UNDER IFRS
Audit of the financial statements of Joint-Stock Commercial bank
“Agropromcredit” prepared in compliance with International Financial
Reporting Standards, was conducted by ZAO KPMG.
Auditors’ Report
To the Shareholders and the Board of Directors of
JOINT-STOCK COMMERCIAL BANK
“AGROPROMCREDIT” (Open Joint-Stock Company)
We have audited the accompanying financial statements of
JOINT-STOCK COMMERCIAL BANK “AGROPROMCREDIT”
(Open Joint Stock Company) (the Bank), which comprise the
statement of financial position as at 31 December 2013,
and the statements of profit or loss and other comprehensive income, changes in equity and cash flows for 2013, and
notes, comprising a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair
presentation of these financial statements in accordance
with International Financial Reporting Standards, and for
such internal control as management determines is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud
or error.
136
Auditors’ Responsibility
Our responsibility is to express an opinion on the fair presentation of these financial statements based on our audit.
We conducted our audit in accordance with Russian Federal
Auditing Standards and International Standards on Auditing. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s
internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by management,
as well as evaluating the overall presentation of the financial statements.
2013 ANNUAL REPORT
We believe that the audit evidence we have obtained is sufficient and appropriate to express an opinion on the fair
presentation of these financial statements.
Opinion
In our opinion, the financial statements present fairly, in all
material respects, the financial position of the Bank as at
31 December 2013, and its financial performance and its
cash flows for 2013 in accordance with International Financial Reporting Standards.
Lukashova N.V.
Director
(power of attorney dated 1 October 2013 No. 64/13)
ZAO KPMG
Moscow, Russian Federation
2 June 2014
Auditor
ZAO KPMG, a company incorporated under the Laws of the
Russian Federation, a part of the KPMG Europe LLP group,
and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
ZAO KPMG
10 Presnenskaya Naberezhnaya
Moscow, Russia 123317
Telephone: +7 (495) 937 4477
Fax: +7 (495) 937 4400/99
Internet: www.kpmg.ru
137
2
6
FOR 2013
UNDER IFRS
STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
Interest income
Interest expense
Net interest income
Charge for impairment on loans to customers
Net interest income aﬅer charge of impairment on loans to customers
Fee and commission income
Fee and commission expense
Net fee and commission income
Net gain on financial instruments at fair value through profit or loss
Net foreign exchange gain
Net gain on available-for-sale financial assets
Income from revaluation of investment property
Operating income
General administrative expenses
(Loss) profit before income tax
Income tax benefit (expense)
Net (loss) profit for the period
Other comprehensive income, net of income tax
Items that are or may be reclassified subsequently to profit or loss:
Revaluation reserve for available-for-sale financial assets:
• net change in fair value, net of deferred tax
• net change in fair value transferred to profit or loss, net of income tax
Total items that are or may be reclassified subsequently to profit or loss
Other comprehensive income, net of income tax
Total comprehensive (loss) income for the period
Chairman of the Management Board
Vasiliy A. Kornev
138
2013
RUB’000
2012
RUB’000
2 698 441
(1 677 422)
1 021 019
(95 750)
925 269
301 450
(56 504)
244 946
6 880
41 314
14 782
10 447
86 441
1 330 079
(1 469 427)
(139 348)
3 482
(135 866)
1 966 187
(1 078 160)
888 027
(39 529)
848 498
285 726
(41 374)
244 352
19 951
19 508
30
907 880
370 233
2 410 452
(1 582 753)
827 699
(258 922)
568 777
22 804
(11 826)
10 978
10 978
(124 888)
18 274
(24)
18 250
18 250
587 027
Chief Accountant
2013 ANNUAL REPORT
STATEMENT OF
FINANCIAL POSITION
as at 31 December 2013
2013
RUB’000
2012
RUB’000
4 915 802
231 060
2 247 780
3 140 823
248 783
1 439 237
1 072 235
4 078 487
16 471 790
1 584 661
2 543 569
13 523 057
702 286
233 202
2 012 360
26 185
40 987
111 976
32 144 150
819 510
200 513
247 828
2 007 136
33 637
41 732
103 947
25 934 433
LIABILITIES
Deposits and balances from banks
Current accounts and deposits from customers
Promissory notes
Other borrowed funds
Deferred tax liability
Other liabilities
Total liabilities
3 544 294
22 752 425
824 832
773 066
234 496
536 648
28 665 761
2 345 564
18 478 801
464 473
773 066
252 798
16 454
22 331 156
EQUITY
Share capital
Revaluation reserve for available-for-sale financial assets
Retained earnings
Total equity
Total liabilities and equity
1 890 000
1 761
1 586 628
3 478 389
32 144 150
1 890 000
(9 217)
1 722 494
3 603 277
25 934 433
ASSETS
Cash and cash equivalents
Mandatory reserve deposit in the Central Bank of the Russian Federation
Loans to banks
Financial instruments at fair value through profit or loss
• Held by the Bank
• Pledged under repo agreements
Loans to customers
Available-for-sale financial assets
• Held by the Bank
• Pledged under repo agreements
Property, equipment and intangible assets
Investment property
Assets held-for-sale
Current tax asset
Other assets
Total assets
Vasiliy A. Kornev
Chief Accountant
139
2
6
FOR 2013
UNDER IFRS
STATEMENT OF
CASH FLOWS
2013
RUB’000
2012
RUB’000
CASH FLOWS FROM OPERATING ACTIVITIES
Interest receipts
Interest payments
Net receipts on financial instruments at fair value through profit or loss
Net receipts from foreign exchange
Net receipts on available-for-sale financial assets
Fee and commission receipts
Fee and commission payments
Other receipts
Other general administrative expenses payments
2 668 604
(1 618 139)
49 765
132 185
14 782
303 447
(55 532)
221 694
(1 549 272)
2 072 707
(961 033)
47 965
3 659
30
299 803
(39 143)
370 253
(1 533 641)
(Increase) decrease in operating assets
Mandatory reserve deposit in the Central Bank of the Russian Federation
Loans to banks
Financial instruments at fair value through profit or loss
Loans to customers
Other assets
17 723
(806 252)
(1 050 100)
(3 060 892)
(7 923)
(52 955)
728 692
571 748
(3 936 948)
(15 589)
Increase (decrease) in operating liabilities
Deposits and balances from banks
Current accounts and deposits from customers
Promissory notes
Other liabilities
Cash provided from operating activities before income tax paid
Income tax paid
Cash flows provided from operations
1 197 266
3 888 686
362 757
517 426
1 226 225
(16 820)
1 209 405
2 342 590
1 660 947
(45 537)
(12 273)
1 501 275
(18 049)
1 483 226
140
2013 ANNUAL REPORT
CASH FLOWS FROM INVESTING ACTIVITIES
Net sales (purchases) of financial assets available-for-sale
Sales of assets held-for-sale
Net purchases of property and equipment
Cash flows provided from (used in) investing activities
Net increase in cash and cash equivalents
Effect of changes in exchange rates on cash and cash equivalents
Cash and cash equivalents as at the beginning of the period
Cash and cash equivalents as at the end of the period
Vasiliy A. Kornev
2013
RUB’000
2012
RUB’000
328 715
7 452
(30 335)
305 832
(69 694)
32 841
(27 869)
(64 722)
1 515 237
259 742
3 140 823
4 915 802
1 418 504
(94 924)
1 817 243
3 140 823
Chief Accountant
141
2
6
FOR 2013
UNDER IFRS
STATEMENT OF
CHANGES IN EQUITY
Revaluation
reserve for
available-forsale financial
assets
RUB’000
Share capital
RUB’000
Balance as at 1 January 2012
Total comprehensive income
Net profit for the period
Other comprehensive income
Net change in fair value of
available-for-sale financial assets,
net of deferred tax RUB 4 568 thousand
(note 12)
available-for-sale financial assets
transferred to profit or loss,
net of income tax RUB 6 thousand
(note 12)
Total other comprehensive income
Balance as at 31 December 2012
142
Retained
earnings
RUB’000
Total equity
RUB’000
1 890 000
(27 467)
1 153 717
3 016 250
-
-
568 777
568 777
-
18 274
-
18 274
1 890 000
(24)
18 250
18 250
(9 217)
568 777
1 722 494
(24)
18 250
587 027
3 603 277
2013 ANNUAL REPORT
Revaluation
reserve for
available-forsale financial
assets
RUB’000
Share capital
RUB’000
Net loss for the period
Other comprehensive income
available-for-sale financial assets,
net of deferred tax RUB 5 701
thousand (note 12)
available-for-sale financial assets
transferred to profit or loss,
net of income tax RUB 2 956 thousand
(note 12)
Total other comprehensive income
Total comprehensive loss
Balance as at 31 December 2013
Vasiliy A. Kornev
Retained
earnings
RUB’000
Total equity
RUB’000
-
-
(135 866)
(135 866)
-
22 804
-
22 804
1 890 000
(11 826)
10 978
10 978
1 761
(135 866)
1 586 628
(11 826)
10 978
(124 888)
3 478 389
Chief Accountant
143
Контакты
КОММЕРЧЕСКИЙ БАНК «АГРОПРОМКРЕДИТ»
(Открытое акционерное общество)
Сокращенное наименование Банка: ОАО КБ «АГРОПРОМКРЕДИТ»
Генеральная лицензия Банка России: № 2880
Дата регистрации Банком России: 9 июня 1994 года
Адрес: 107023, г. Москва, ул. Электрозаводская, д. 27, стр. 5
Телефоны: +7 (495) 755-80-08, 8 800 100 80 08
E-mail: [email protected]
Сайт: www.apkbank.ru
Contacts
JOINT-STOCK COMMERCIAL BANK “AGROPROMCREDIT”
(Open Joint-Stock Company)
Abbreviated name: JSCB “Agropromcredit”
Full banking licence issued by the Bank of Russia: No. 2880
Date of registration by the Bank of Russia: 9 June 1994
Address: 27, str. 5, Ul. Electrozavodskaya, Moscow 107023, Russian Federation
Phones: +7 (495) 755-8008, 8 800 100 8008
Email: [email protected]
Website: www.apkbank.ru

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