VEB Group Demonstrates Equity Increase in 9M 2017

Vnesheconombank published its interim condensed consolidated financial statements of the VEB Group for the nine-month period ended 30 September 2017 under IFRS.

«Fully abiding by the approved development Strategy, we are currently in the transformation stage, which we plan to complete in 2018. We are on schedule. This year we have focused our efforts, among others, on the “old” loan portfolio management, on profound change to the investment process, strategic projects financing. Of course, these measures do not produce an immediate effect: VEB Group’s financial result for the nine-month period is negative so far, which was mainly caused by provisioning within the “old” loan portfolio restructuring. However, there already are some positive interim results: funding structure is being optimized, interest expense on borrowed funds is going down; we see the Group’s equity increase.

The Bank is thus preparing to an active phase of investing in the approved priority areas. Under the development Strategy the new VEB will focus on financing of the projects in value-added industries, projects promoting new technology development, including National Technology Initiative. It is obvious that the use of new information technology is a pre-requisite for the efficient and competitive economy.

We also worked hard on the establishment of the Project Finance Factory, which is due in the first quarter 2018. We strongly believe that this instrument will boost the investment process and will make project financing one of the major drivers for the economic growth of Russia», - VEB’s First Deputy Chairman – Member of the Board Nikolai Tsekhomsky said.

Large-scale transformation of the VEB’s activity became possible thanks to a solid capital base.

  • Group’s equity for the nine-month period went up by RUB 3.8 bn (+0.7%) to reach RUB 559.5 bn as at September 30 2017. The major contributing factors were subsidies from the federal budget (RUB 107.6 bn) and the Group’s financial result.
  • Capital adequacy ratio (under RAS) amounted to 15,6% as at September 30 2017.

Total assets for the nine-month period 2017 equaled RUB 3.5 trl as at September 30 2017. The assets structure remained mostly unchanged, with the loans to customers (after allowance for impairment) amounting to RUB 1.77 trl. At the same time throughout the nine-month period quarter-on-quarter we saw a positive stable dynamics with regard to granting new loans. The amount of new loans in the nine-month period of 2017 was RUB 107.9 bn, exceeding by 46% that in the corresponding period of 2016.

Total liabilities for the nine-month period of 2017 went down by 2.5% to RUB 2.94 trl, primarily due to the decline in amounts due to the Russian Government and the Bank of Russia by RUB 47.8bn (-8.6%) because of partial maturity of the Federal Treasury deposits in Q3 2017, as well as the reduction of amounts due to banks by RUB 27bn (-4.2%).

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