Business in Three Dimensions Annual Report 2014
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www.expobank.ru ANNUAL REPORT 2014 BUSINESS IN THREE DIMENSIONS ANNUAL REPORT 2014 THE BEST RUSSIAN BANK Expobank has received the EMEA Finance Europe Banking Award, nominated as the Best Bank Operating in Russia, based on 2014 results. EMEA Finance Magazine is an internationally recognized financial publication telling of the most important events in the financial markets in Europe, the Middle East and Africa. Every year the magazine gives out ‘Europe Banking Awards’ to the best banks. When deciding on the winners, EMEA Finance experts rely on such criteria as the economic performance, increase in profits and international business expansion. Expobank 2014 ANNUAL REPORT CONTENTS General Information on the Report The Report has been prepared by Expobank SUMMARY CORPORATE GOVERNANCE Limited Liability Company (‘Expobank’). The consolidated data cover the period General information on the Report 3 Accountability and efficiency 40 from 01 January to 31 December 2014. Assets and partner banks 6 Risk management 42 Geography of operation 7 Information openness and transparency 48 Key Topics of the Report Contact Details Expo brand footprint globally and across Russia 8 Social policy and HR management 49 History of the Bank 10 The Report highlights performance indicators included in 29 Kalanchevskaya Street, bldg.2, Moscow, 107078 Expobank’s 2015–2017 Strategy. Tel: +7 (495) 228 31 31 Standards Email: [email protected] STARTEGIC REPORT FINANCIAL STATEMENTS 24/7 Information Centre: The report has been prepared based on Expobank +7 (495) 231 11 11; +7 (800) 500 07 70 2014 IFRS Statements. Address of the Chairman of the Board of Directors 13 Independent Auditor’s report 60 Website: www.expobank.ru Address of the Chairman Statement of financial position 62 Ratings of the Management Committee 15 Statement of Comprehensive Income 64 In May 2014 International Rating Agency Fitch Ratings Strategy, Mission, Values 18 Statement of changes in equity 66 upgraded the Bank’s National Long-Term Rating to “BBB”, Our activities 19 with its International Ratings affirmed at “B”. The ratings were Statement of cash flows 67 affirmed in December 2014. Key events in 2014 20 In November 2014 Russian Rating Agency RusRating upgraded Financial results 21 the Bank’s credit ratings to “BBB-” (International Scale) and Overview of Russian economy in 2014 24 to “AA–” (National Scale), Outlook Stable Strategic goals for 2015–2017 27 GENERAL Core Business Private Banking / Expobank Premier 30 Treasury 31 Addresses / Contacts 69 Offering a whole range of banking services to corporate clients and affluent private customers are among the Bank’s priorities, Corporate banking 36 as well as acquisition and consolidation of banking assets. The M&A 38 Bank operates under General License for Banking Operations No.2998 of 06 February 2012 (replacement of License No.2998 Regional policy 39 of 02 December 2008) issued by the Bank of Russia (CBR). The Bank participates in the government’s deposit insurance programme introduced by Federal Law No.177-FZ dated 23 December 2003 ‘On Insurance of Household Deposits with Russian Banks’. 2 www.expobank.ru 3 INTERNATIONALITY Business and finance have no borders. Despite differences in traditions and cultures businessmen PRAGUE STOCK EXCHANGE MOSKVA-CITY from various countries are able to find common is the second largest stock exchange in the CEE ‘Moskva-City’ Moscow International Business Center is language. Expobank opens up the way to the European countries. Though the first commodities and stock the biggest business area both in Moscow and Russia. and world markets to its clients and is ready to be exchange in the Czech capital was founded yet in 1861, The country’s highest skyscrapers — Mercury City Tower their guide in new directions and new opportunities. the modern Prague Stock Exchange is relatively young: (338.8m), Eurasia Tower (308.9 m), Moscow Tower We are familiar with all subtleties and nuances trading started on 6 April 1993. (301.8m) — have been and are still constructed. of business cultures in various countries, and we are happy to share this experience. Everywhere, we speak one common language with business people — the language of growth and development. PRAGUE, THE CZECH REPUBLIC MOSCOW, RUSSIA RIGA STOCK EXCHANGE The stock exchange is owned by Swedish-Finnish OMX Group which also operates exchanges in Helsinki and Stockholm. The neo renaissance stock exchange building was constructed in 1852–1855, designed by architect Harald Julius von Bosse. RIGA, LatVIA Expobank 2014 ANNUAL REPORT Assets and Partner Banks Geography of Operation THE BANKS ARE REPRESENTED IN THREE “Clients’ business value growth leads to the Igor Kim REGIONS — RUSSIA, THE CZECH REPUBLIC increase in the shareholder value of the Bank. Chairman of the Board of Directors, AND LatVIA — AND operate UNDER That is why each of the credit institutions is Expobank LLC (Russia) A SINGLE corporate NAME OF EXPOBANK. result-oriented and focuses on offering the most Chairman of the Supervisory Board, advantageous opportunities. Partner banks Expobank CZ (Czech Republic) Each of the credit institutions is controlled by Igor Kim and form new access points for Russian clients is a financial partner of the Russian credit institutions. This Chairman of the Board of Directors, provides the clients of our bank in Russia with both prompt to global financial centers, provide operational AS Expobank (Latvia) execution of transactions in Russia and with a whole range efficiency and consultancy expertise”. of opportunities in European countries and in Hong Kong. Igor Kim is an international strategic investor who has success- fully completed over 30 M&A deals both with Russian partners The banks are focused on corporate banking, M&A deals and on and global financial institutions. servicing export and import transactions of companies including Igor Kim those promoting import substitution policies and development of joint businesses in the territories of the brand presence. IGOR KIM SUCCESSFULLY CLOSED Barclays (UK) OVER 30 M&A DEALS WITH GLOBAL Santander (Spain) Morgan Stanley (USA) FINANCIAL INSTITUTIONS: West LB (Germany) VR Leasing (Germany) LBBW (Germany) THE FOLLOWING ASSETS HAVE LLC ‘SIBBUSINESSBANK’ (Surgut) BEEN PURCHASED IN THE RUSSIAN Commercial Bank ‘STROMCOMBANK’ Limited (Krasnoyarsk) Kirill Nifontov Māris Avotiņš Ilya Mitelman SECTOR RECENTLY: Commercial Bank ‘MAK-Bank’ LLC (Moscow) CEO, Russia CEO, the Czech Republic CEO, Latvia from OJSC ALROSA Diamond Mining Company. Moscow COMMERCIAL BANK ‘MAK-BANK’ LLC EXPOBANK LLC EXPOBANK CZ AS EXPOBANK Surgut is a dynamically developing bank that has been operates in the Czech banking market since 1991. is one of the oldest banks in Latvia. It was founded operating in the Russian banking market since The bank is focused on provision of complex prod- in 1991. The Bank’s major task is to be a reliable LLC ‘SIBBUSINESSBANK’ 1994. ucts and services. This covers corporate banking and professional financial partner to its customers Krasnoyarsk services incl. treasury services, real-estate financing and clients, to provide them with top quality and Its priorities are offering a whole range of banking and export and trade financing as well as a broad speedy service, and to ensure security and stability. COMMERCIAL BANK ‘STROMCOMBANK’ LIMITED services to corporate clients and affluent private range of private and personal banking services. The service standards have already been appreciated customers. The Bank focuses on providing banking Expobank CZ takes pride in being able to offer by clients from Russia, CIS and Europe operating services backed up by an extensive experience custom-made solutions and in its great care to detail in mining, manufacturing, finance, trade and other of successful deals involving funds raising, M&A’s when providing its clients with intellactual products industries. and business restructuring for Russian and interna- and services. THE PURCHASED FINANCIAL INSTITUTIONS tional companies. About 7.5 thousand companies and over 100 thousand individuals are among the WERE MERGED INTO EXPOBANK LLC Bank’s customers and clients. (RUSSIA) 6 www.expobank.ru 7 Expobank 2014 1 ANNUAL REPORT Summary “The Bank’s team possesses qualitative “We see great potential for the development Expo Brand Footprint Globally expertise and competences in M&A deals. of the Bank’s and its clients’ businesses in Ensuring development for the Bank, growth in its the Asian market, namely in such segments as and Across Russia business volumes and profitability, and expansion China, Malaysia, Indonesia. We think that the of geographical footprint through M&A deals are Bank’s products and services, especially highly our key business goals. The synergy effect from efficient servicing of payments with a remote Expobank LLC (RUSSIA) their implementation enables us to develop at access option, will be in great demand” the rate exceeding the market average”. ASSETS Ilya Mitelman CEO of AS Expobank AS OF 2014 Kirill Nifontov 51.9 CEO of Expobank LLC RUB BLN YEAR-END THE CZECH REPUBLIC EQUITY OF RUB 6.9 BLN, “We provide our clients with top quality financial RETURN ON EQUITY LATVIA instruments and service. When performing OF 22.5% Prague export and import transactions between Riga Russia and the Czech Republic, promptness Saint Petersburg and skilled support are among our competitive advantages”. EXPOBANK CZ (CZECH REPUBLIC) RUSSIA Māris Avotiņš ASSETS Moscow CEO of Expobank CZ 750 AS OF 2014 Yakutsk EUR MLN YEAR-END Perm EQUITY OF EUR 94