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Vnesheconombank releases financial results for 6 months 2017 under IFRS

28 august 2017 года
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Vnesheconombank published its interim condensed consolidated financial statements of the VEB Group for the six-month period ended 30 June 2017 under IFRS.

“In the first half of 2017, our key focus was set on elaboration of a legislative and organizational basis for the Project Finance Factory and building a network of strategic partners for Vnesheconombank as a development institution for the implementation of 'leap frog' technologies in the Russian economy. Definitely, our activities would hardly be successful without support from the Government of the Russian Federation, which was not limited to financial measures. But above all, it was aimed at creating the conditions to evolve an effective mechanism for financing high-tech and innovative projects. Besides, we continued to work on improving a distressed part of the “old” loan portfolio”, First Deputy Chairman of Vnesheconombank – Member of the Board, Nikolay Tsekhomskiy said.

The VEB Group’s key financial highlights:

  • Total assets for the six-month period 2017 were almost flat and totaled RUB 3.56 trl as at 30 June 2017. The assets structure was also broadly unchanged.
  • For the first half of 2017, Vnesheconombank granted RUB 69.7 bn of new loans, including RUB 21.7 bn provided to AO Transholdleasing to deliver a project on the acquisition and leasing of subway cars to the Moscow Metro. Total loans to customers (after allowance for impairment) amounted to RUB 1.84 trl as at 30 June 2017.
  • Total liabilities for 1H 2017 went down by 2.4% to RUB 2.95 trl as at 30 June 2017, reflecting a decline in the amounts due to banks as a result of the contractual maturities expiration and a decrease in customer accounts. For 1H 2017, Vnesheconombank was an active player in the domestic bond market: new local bonds were issued for the total amount of RUB 80 bn and USD-denominated bonds for the amount of USD 550 mn with settlement in Russian rubles. With all this going on, the VEB Group managed to achieve 9.3% lower interest expense on debt securities issued compared to the six-month period of 2016.
  • Equity for 6M 2017 increased by RUB 61.8 bn, up 11.1%, to reach RUB 617.5 bn as at 30 June 2017. The capital adequacy ratio (under RAS) reached 16.2% as at 1 July 2017 (11.6% as at 1 January 2017). The positive movement in equity reflected the subsidies from the federal budget provided to Vnesheconombank in March and June 2017 in the form of an asset contribution of the Russian Federation in the total amount of RUB 107.6 bn:
    • The amount of RUB 103.4 bn was recognized in “Authorized capital” to compensate for a part of costs related to the fulfillment of obligations arising from foreign borrowings in the capital markets;
    • The amount of RUB 4.2 bn was recognized in “Uncovered loss” to compensate for losses arising from free of charge transfer of assets to the state treasury of the Russian Federation.
  • The VEB's Group negative financial result for the six-month period of 2017 in the amount of RUB 47.6 bn was due to the restructuring strategies implementation on the projects within the “old” loan portfolio transformation. At the same time net interest margin showed positive dynamics for 1H 2017 and came at 2.4% compared to 2.2% for 1Q 2017.

In July 2017, the efforts of the VEB's team to implement the Strategy 2021 and the systemic importance of VEB as a development institution for the Russian economy were emphasized by two rating agencies.

  • The Analytical Credit Rating Agency (ACRA) assessed Vnesheconombank for the first time and assigned it a AAA (RU) top credit rating with a stable outlook. The rating is at par with the sovereign rating of the Russian Federation.
  • Standard and Poor’s revised its outlook on Vnesheconombank to ‘positive’ from ‘developing’ thus equalizing it with that on the Russian Federation. The rating agency also affirmed the 'BB+/B' long- and short-term foreign currency issuer credit ratings and the 'BBB-/A-3' long- and short-term local currency issuer credit ratings on VEB.


Press Office
E-mail: press@veb.ru


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