2015Annual Report
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JSCB «ALMAZERGIENbaNK» JSC ANNUAL REPORT 2015 73 ANNUAL 20REPORT 15 MANAGEMENT RESPONSIBILITY STATEMENT We confirm that to the best of our knowledge and belief: ` The financial statements, prepared in accordance with International Financial Reporting Standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of Almazergien- bank ` The management report includes a fair review of the development and performance of the business and the position of Almazergienbank, together with a description of the principal risks and uncertainties that it faces. Chair of the Management Board of JSCB Almazergienbank JSC Lyudmila Nikolaeva JSCB «ALMAZERGIENbaNK» JSC ANNUAL REPORT 2015 75 TABLE OF CONTENTS FINANCIAL HIGHLIGHTS AND KEY CORPORATE GOVERNANCE. .108 EVENTS Of THE YEAR 2015 . 80 ` Corporate governance system . .108 ` Financial highlights. 80 ` General shareholders meeting . .110 ` Key events of the year 2015 . 81 ` Supervisory Board . .112 ` Committees of the Supervisory Board . .119 ` Management Board . .122 STRATEGY, MISSION AND VALUES . .82 ` Remuneration of the members of the Supervisory Board and Management Board . .126 ` Mission . 82 ` Internal control and audit . .128 ` Values . 82 ` The Bank’s strategic goals and objectives . 83 ` Implementation of the strategy. 84 SUSTAINABLE DEVELOPMENT . 132 ` Personnel . .132 EcONOMY, BANKING SECTOR ` Social responsibility . .133 AND POSITION IN THE SECTOR . .86 ` Environmental protection. .135 ` Information on the major transactions ` Economy . 86 and interested party transactions . .135 ` Banking sector . 88 ` The Bank’s position in the sector . 90 INFORMATION FOR SHAREHOLDERS. .136 MANAGEMENT REPORT . .92 ` Share capital. .136 ` Organizational structure. 92 ` Information on the dividend policy ` Operating review . 94 and dividend record. .136 ` Corporate business . 94 ` Retail business . 98 ` Operations with securities . .100 APPENDICES . .140 ` Financial review. .102 ` Prospects of the Bank’s development in 2016 . .103 ` IFRS reporting . .140 ` Risk management . .104 ` Contacts and requisites. .144 76 MESSAGE FROM THE CHAIR OF THE SUPERVISORY BOARD DEAR SHAREHOLDERS, PARTNERS, FRIENDS! In the year 2015 the tendencies noted in the previous year ranged by the strategic partner and main shareholder of Alma- continued for the economy of the country and the republic zergienbank — the Government of the Sakha Republic (Yakutia), as well. The rates of economic growth were held down due and increase of the authorized capital. Today, the recapitaliza- to certain economic circumstances. All of that influenced tion allows Almazergienbank to implement large-scale social the growth of the banking sector as well, including the re- and infrastructural projects, from lending housing construction gional banks with state participation. in rural regions to funding the construction of kindergartens, so much needed in all regions of Yakutia. However, in spite of unfavorable economic conditions, Alma- zergienbank finished last year successfully. Today Almazer- In the period under review, we continued to improve the sys- gienbank ranks highly among the Russian banks by all its tem of corporate governance in the Bank. The system of cor- key indicators: the volume of retail credit portfolio and the porate governance in the Bank is monitored thoroughly, size of the corporate credit portfolio, by private deposits the work on the development of anticorruption procedures and the size of the capital. The implementation of the Bank’s and compliance control is continued. Development Strategy, adopted in 2014, began to bring ac- tual results last year. The Supervisory Board approved a number of major docu- ments, including the Anticorruption Policy, the Corporate Certainly, I would like to mention the work of the Supervisory Social Responsibility Policy, and the Regulations on the key Board and its committees, engaged in making the key decisions: performance indicators for management. the Bank’s recapitalization in the amount of RUB 900 mln, ar- JSCB «ALMAZERGIENbaNK» JSC ANNUAL REPORT 2015 77 THIS IS WHERE I SEE ALMAZERGIENBAnk’s UNIQUENEss — ALTHOUGH IT HAS NOT COM- PLETED THE MODERNIZatION OF ITS BUSI- NESS PROCESSES YET, It IS NOT AFRAID OF IMPLEMENTING THE NEW LARGE-SCALE PROJECTS, THat CAN GREatLY BENE- FIT BOTH THE DEVELOPMENT OF ECONO- MY AND THE SOLUTION OF SOCIAL ISSUES. At tHat, I SHOULD NOTE THat THE MODERN- IZatION OF THE Bank’s operatIONS IS GO- ING QUITE SUCCESSFULLY The measures taken by the Bank resulted in the RAEX Rat- quality management system. That is why, the improvement ing Agency’s increase of its credit rating from А “High level of quality of almost all banking activities will be the man- of creditworthiness” to А+ “Very high level of creditworthi- agement’s priority task. ness”, Outlook Stable. On behalf of the Supervisory Board, I would like to express As I have already mentioned, in 2014 the new Development my gratitude to all employees of Almazergienbank for their Strategy of the Bank until 2018 was adopted. Today, it is im- effective work, initiative and energy, without which the Bank portant to make right conclusions from the results of the would not have achieved its present results. We are confi- Strategy’s implementation for the past year and a half, to as- dent that, improving its main activities, the Bank is moving sess correctly the macroeconomic situation and mid-term on the right track. Almazergienbank should continue devel- development prospects of the banking business in Russia, oping its activity as a reliable high-tech bank, which makes in order to set the right priorities and amend the Develop- considerable contribution to the development of the repub- ment Strategy in a timely manner. The members of Almazer- lic’s economy. gienbank’s Supervisory Board will be engaged in the devel- opment of the necessary amendments. Chair of the Supervisory Board of JSCB Almazergienbank JSC, General Director of Non-Profit Organization In the years to come, Almazergienbank should focus on im- “Trust Fund for Future Generations proving the quality of distant servicing, traditional servic- of the Sakha Republic (Yakutia)” ing in operational offices and development of the service Sergey Mestnikov 78 MESSAGE FROM THE CHAIR OF THE MANAGEMENT BOARD DEAR CUSTOMERS AND PARTNERS Of ALMAZERGIENBANK, and medium businesses. It could be noted that throughout COLLEAGUES, FRIENDS! last year, in the conditions of the country’s economy stunted development, when lending volumes of federal banks were objectively decreasing, it was Almazergienbank — the state- In 2014 the Supervisory Board of Almazergienbank ap- owned regional bank — that provided considerable support proved the Bank’s Development Strategy, where moderni- to the small and medium businesses. zation was identified as a priority way of Almazergienbank’s development. Large-scale modernization, based on the im- The modernization of the Bank’s business processes guaran- plementation of new technologies, continued in the year teed its success in 2015. It is confirmed by many of our re- 2015. The work was conducted in the following major ar- cord-breaking indicators. Almazergienbank became 83rd by eas: improvement of software systems for the development the volume of the retail credit portfolio, came close to the of high-tech distant servicing, improvement of traditional TOP 100 of the country’s largest banks by the size of the servicing in the operational offices in the context of the corporate credit portfolio and private deposits. We also were gradual increase in their number, development of the ser- among 150 largest Russian banks by the capital’s size. vice quality management system, enlargement of the prod- uct line to meet the demands of various customer segments, In addition, the Bank considerably strengthened its activi- primarily, small and medium businesses. ty in corporate lending, having occupied the share of 18 % in the republic’s target market. By the results of 2015, Thus, in 2015 each third loan to the small and medium the Bank’s corporate credit portfolio made RUB 11,7 bln. businesses in the republic was granted by Almazergienbank, The Bank was obviously successful in the private funds at- which made 34 % of the lending volume to Yakutia’s small tracted — the republican market share made 15,9 %. The JSCB «ALMAZERGIENbaNK» JSC ANNUAL REPORT 2015 79 Bank achieved the growth of the aggregate credit portfo- lio by 24 % — from RUB 14 to 17,3 bln at year-end, as well THUS, IN 2015 as the increase of the attracted customer funds by 18 % — from RUB 17,1 to 20,1 bln. EACH THIRD LOAN At year-end 2015, we increased the profit from the opera- tions with securities six-fold — from RUB 9,3 mln in 2014 TO THE SMALL to RUB 53,4 mln. According to the federal Finance Ministry, Almazergienbank ranks 12th in the rating of the largest banks to buy gold in 2015. AND MEDIUM Progressive and tangible success of Almazergienbank re- flected in the Bank’s ratings at the federal level. Thus, by BUSINESSES the decision of the RF Finance Ministry, Almazergienbank became one of the 38 large Russian banks to get the right IN THE REPUBLIC to take part in the federal mortgage lending program with state support. By this program, in the last year’s May-June we lent 402 mortgage loans for RUB 898 mln, including WAS GRANTED in Yakutsk — 647 mln, in the republic’s and Russian re- gions — RUB 251 mln. Total in 2015, the Bank granted RUB 1 163 mln of mortgage loans. BY ALMAZERGIENBANK, 3 new offices were involved in achieving these, I dare say, WHICH MADE 34 % excellent results: supplementary operational office in Nyur- ba, operational office in Vladivostok and supplementary op- erational office in Mirny. OF THE LENDING Still, the achieved results do not imply that all tasks have been completed. It is needed to finalize the creation of the VOLUME TO YaKUTIA’s efficient customer relationship management system (CRM), introduce new types of distant servicing, increase the level SMALL AND MEDIUM of the bank’s branches’ efficiency, first of all, front offices, and make corporate business corporate investment.