www.bankalliance.ua BANK ALLIANCE JSC is a versatile Bank providing a full range of banking services for legal entities and S&P GLOBAL RATINGS individuals and having an impeccable business The S&P GLOBAL RATINGS international rating agency reputation, whose mission is to create favourable has given BANK ALLIANCE JSC high credit ratings of conditions for the development of the Ukrainian В-/В with a STABLE forecast. economy and stable growth of gross domestic product. Bank ALLIANCE JSC is a member The Bank has been operating in the market for more of MasterCard WORLDWIDE 28than 28 years (Certificate of Registration dated 10 international payment system March 1992, Registration No. 89 in the State Register and an approved member of VISA of Banks). The Bank provides comprehensive services ASSOCIATION. to legal entities and individuals on the basis of an Since 29 August 2018, it is an official indefinite Banking Licence No. 97 dated 17 November member of the European Business 2011 for the right to provide banking services specified Association (EBA). in Part 3 of Article 47 of the Law of Ukraine “On Banks The Bank is an official Member and Banking Activities” and General Licence for of the International Chamber of currency transactions of the National Bank of Ukraine Commerce (ICC) since 21 December dated 30 December 2016, No 97-3 for the right to 2018. conduct currency transactions. The authorized capital amounts to UAH 365 million and As of 10 march 2020, the Bank has the regulatory capital amounted to UAH 438 million a regional network of 21 branches, as of 1 January 2020. The Bank 100% complies with all which is represented in the largest economic standards365 and foreign exchange position cities of Ukraine. limits of the National Bank of Ukraine, including liquidity and capital. On 9 January, 2020, the Rurik The Bank is a member of21 the Deposit national rating agency confirmed BANK ALLIANCE Guarantee Fund (Certificate No. a long-term credit rating of a borrower at the uaAAA 023 dated 2 September 1999) and investment category level with a stable forecast, and a member of the Independent determined the Bank’s deposit rating at r5-. Association of Banks of Ukraine. Network International Highly Unchanged external Operation in the largest credit rating profitable auditor’s opinion on on the banking cities of Ukraine at the B-/B level from activity confirmation market since 1992 the leading rating agency of the financial state- Standard&Poor’s ments
Availability Share Individual Professional of national of non-performing flexible approach to and experienced top rating loan portfolio servicing management team uaAAA of up to 1% customers TO ATTAIN ITS STRATEGIC OBJECTIVES, THE BANK BUSINESS MODEL DISTINGUISH THE FOLLOWING BUSINESS AREAS IN ITS ACTIVITIES: CORPORATE BUSINESS: • lending • documentary transactions (including balancing guarantees) • payment and cash services • financial leasing • payroll programs • direct dealing • individual conditions SYNERGY in the work with the TOP • Forex Operational management and owners of management of corporate clients liquidity
Funding Purchase and sale of SMEs with funds of currency INTERBANK AND of individuals RETAIL BUSINESS: INVESTMENT BUSINESS • payment cards • purchase and sale of currency • mortgage lending • security transactions • deposit transactions • cash collection services • e-licences for investments abroad • placement / raising of funds • VIP banking • provision of cash • making international payments Cash collection • support of foreign economic activities FOREX for individuals
Cash collection
Purchase and sale of cash foreign currency SUSTAINABLE DEVELOPMENT Within the approved strategy for 2020~2022, BANK ALLI- ANCE JSC reaffirms its commitment to the principles of transparency and accountability in its day-to-day operations and strives to achieve high standards of service at the Bank 100% owned by Ukrainians.
• Investments in the development of SMEs • Continuous improvement of the quality of services provided • Expansion of regional presence • Implementation of joint projects with the state and international financial institutions
• Decent working conditions • Personnel training • Safety and health of employees • Charity projects KEY STAKEHOLDERS Shareholders Investors Sustainable development is not possible without building partner relations with the stakeholders. The Bank is guided by the principles of access to public information of all key stakeholders.
Media Employees
Partners Clients
Public authorities APPROVED STRATEGY AND MISSION OF THE BANK
The Bank’s priority objective for 2020~2022 is to achieve the position of an efficient, modern and competitive bank of Ukraine. This involves creating a structure that would be adaptive and resilient to rapid changes in the environ- ment, attentive and innovative to customer needs, subject to the risk management and security principles. Con- sidering the history of development, assessment of the current state and prospects (SWOT analysis), we consider the strategy of organic growth with a focus on the corporate segment, conservative credit policy and gradual de- velopment of the regional network to be justified.
KEY FEATURES OF THE SELECTED STRATEGY INCLUDE THE FOLLOWING: 1. Niche treasury and transaction bank 2. Target segments: • Small and medium-sized corporate clients and related retail clients • VIP clients (private banking) • financial institutions 3. Regional presence in the largest cities of Ukraine, with the primary reach in Kyiv 4. The priority lending segment is small and medium-sized business 5. Priority to lending to borrowers with a high financial status 6. Increase in the share of commission fee income, first of all, from corporate clients 7. Combination of traditional and digital operation models Based on the selected strategy, the vision, mission and objective of the Bank are formed as follows: VISION: BANK ALLIANCE is a reliable and versatile bank that has the trust of the public and builds long partner relations, providing clients with modern personalized solutions.
MISSION: Creating favourable conditions for the development of the economy of Ukraine and stable growth of gross domestic product, while maintaining the optimal balance of inter- ests of clients, shareholders and the Bank itself. We give people confidence and reliability, we make their lives better by helping them to bring to life their aspirations and dreams. Our mission defines the sense and content of the activities of BANK ALLIANCE JSC and emphasizes the important role of the Bank in the national economy and society — maintenance of confidence, reliability and stability. Our customers, their needs, dreams and aspira- tions are the basis of our activity as an organisation. At the same time, the Bank’s objectives cannot be attained with- out personal and professional objectives of the people who work in the Bank. A high objective is attained by a team of like-minded people who are united by a common value system.
OBJECTIVE: To be a reliable financial partner focused on the interests of clients, and to hold strong positions in the target client segments, to ensure profitable activities of the Bank. OWNER Alexander Sosis
The ultimate beneficial owner of BANK ALLIANCE JSC is a citizen of Ukraine. Alexander Sosis who, after approval by the National Bank in 2016, acquired a major interest in BANK ALLIANCE JSC of 89,289% in the authorized capital of the Bank. Alexander Sosis is a businessman, founder and co-owner of the insurance group ASKA, founder of the All-Ukrainian charitable organisation “Alexander Sosis Foundation”, winner of the "Personality of the insurance market" of the newspaper “Business” (2000), winner of the national program "Man of the Year" in the nomination “Manager year” (2002), the best top-manager of Ukraine according to the rating “Investgazeta” (2002), entered the top ten of the leaders of the insurance sector, according to the estimation of “Guard of leaders — 2009”. KEY EVENTS
2020 The Bank is an active player in the interbank foreign exchange market of Ukraine, and ranks 17th in terms of trading vol- ume in the interbank foreign exchange market of Ukraine. Since Q4 2018, the National Bank of Ukraine has quarterly included BANK ALLIANCE JSC into the list of banks participating in the foreign exchange intervention 2019 The Bank is the leader in the bank guarantees market in the Prozzoro procurement system
The Rurik national rating agency confirmed BANK ALLIANCE JSC a long-term credit rating of a borrower at the uaAAA investment category level with a stable forecast and also rated bank’s deposits at the level of r5- The S&P GLOBAL RATINGS international rating agency has given BANK ALLIANCE JSC high credit ratings of В-/В with a STABLE forecast As of 1 January 2020, the individual UAH deposit portfolio of Bank Alliance reached UAH 1 billion Refinitiv, the global leader in financial services information and trading systems, recognizes Bank Alliance’s treasury team as the winner in annual Best Dealing Desk category in 2019 Annual audit of financial statements by Baker Tilly, an international auditing firm The Bank has received licences to carry out such new activities for itself as “factoring”, “financial leasing”, “depository activity of depository institution” and “securities trading activity: dealership activity” The Bank has signed a memorandum on the general principles of cooperation in the implementation of state support to agricultural producers with the state, which provides for the allocation of budgetary funds for support to agribusiness. Thus, under this memorandum, all borrowers of the Bank can expect a compensation of 2018 up to 70% of the loan rate under agricultural programs
Since 29 August 2018, it is an official member of the European Business Association (EBA) The Bank is an official Member of the International Chamber of Commerce (ICC) since 21 December 2018 The Competition Committee of the Ministry of Finance of Ukraine recognized BANK ALLIANCE JSC as an authorized bank winning the right to pay pensions, cash benefits and wages to employees of budgetary organisations BANK ALLIANCE JSC enters the TOP 20 largest players in the stock exchange among traders in government bonds following 2017 BANK BRANCHES The regional network of Bank Alliance JSC is represented by 21 branches in: Kyiv, Lviv, Dnipro, Zaporizhzhia, Chernivtsi, Kharkiv, Odesa, Mykolaiv, Chornomorsk, Chernihiv, Cherkasy, Vinnytsia, Kremenchuk, Chernihiv Korosten, and Sumy Sumy Korosten
Lviv Kyiv Kremenchuk Kharkiv
Cherkasy
Vinnytsia
Chernivtsi Dnipro
Zaporizhzhia Odesa Chornomorsk BANK ALLIANCE JSC is one of the leaders of the interbank mar- INTERBANK ket of Ukraine, which is confirmed by the inclusion of the Bank into the list of 20 banks authorized to participate in currency inter- ventions to be implemented by the National Bank of Ukraine. The AND INVESTMENT Bank carries out transactions for purchase/sale of currency both in the interbank foreign exchange market of Ukraine and curren- cy conversion transaction in foreign markets. In addition, BANK BUSINESS ALLIANCE JSC actively carries out resource transactions in the in- terbank market, namely placement/attraction of resources with counterparty banks, SWOP operations and purchase of deposit certificates from the National Bank of Ukraine.
In parallel, the treasury business of the Bank is developing the cash collection area. New cars have been purchased, and the number of customers and the market share in Kyiv has been in- creased significantly. Cash collection services are provided to both legal entities and individuals. Professionalism and efficiency are the main values that allow us to quickly develop this business.
New services, such as FOREX for individuals and real-time elec- tronic trading for legal entities, have been introduced. These prod- ucts are innovative in the banking sector of Ukraine.
BANK ALLIANCE JSC is also an active participant in securities trading in the Ukrainian stock market. Thus, according following 2019, the Bank was ranked 14th among the banks that traded in government bonds on the PFTS Stock Exchange. The Bank both provides brokerage services to Clients and conducts dealer trans- actions with securities for its own benefits and at its own expense. KEY PERFORMANCE 498 INDICATORS 3453 401
2114 290
188
777 73 313 140
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 NET ASSETS / 60% + per year EQUITY / 90 million + per year
111 97 40% 34% 64 30% 22% 50
2016 2017 2018 2019 2016 2017 2018 2019
NET PROFIT / 50 million + per year RETURN ON EQUITY / 20% + 1,779,939 1,080,677 CLIENT FUNDING FUNDS 978,827 686,411
SOURCES Legal Individuals LIABILITY STRUCTURE entities TOTAL: UAH 2,956 million
357,042 98,752 103,630 3,343 489 7,518
96.8% Client funds 2.9% Payables 2015 2016 2017 2018 2019 0.3% Other funds
BORROWED 594% FUNDS / EQUITY
427%
168% 37.8% funds of legal entities 67% 62.2% funds of individuals 2016 2017 2018 2019 DIVERSIFIED STRUCTURE OF ASSETS AND LOAN PORTFOLIO
NET ASSETS HIGHLY LIQUID ASSETS TOTAL: UAH 3,453 million TOTAL: UAH 874,020
UAH 2,347,172 68% Credit portfolio UAH 181,210 20.7% Cash in hand UAH 874,020 25% Highly liquid assets UAH 635,446 72.7% Funds in the NBU UAH 232,266 7% Other assets UAH 57,364 6.6% Funds in other banks
• Corporate business is a priority for the Bank (99% of total loan portfolio) • The key segment is small and medium-sized clients (revenue — up to UAH 500 million per year) 302 13% Construction 764 33% Trade • The growth rate of the Bank’s loan portfolio is signifi- 176 8% Finance cantly 454 19% Agriculture ahead of the increase rate in the system in general 158 7% Transport (+ 225% and + 68% for 2018 and 2019, respectively) 225 10% Other industries • The Bank adheres to a conservative credit policy — 24 1% Individuals overdue arrears below 1% 242 10% Fuel and energy industry • Portfolio reserve level is 5% PROFITABILITY 2019* 2018 2017 2016 KEY Profit, million. 97 111 64 50 INDICATORS Return on assets, % 3% 8% 15% 24% Return on equity, % 22% 34% 30% 40% Interest margin, % 6% 9% 13% 10% Return on assets, % 16% 17% 15% 12% Funding cost, % 10% 10% 7% 5% Interest spread, % 5% 7% 9% 7%
EFFICIENCY
Net operating income (NOI), UAH million 403 351 170 87 COST/INCOME, % 63% 39% 42% 31% Non-interest income / Operating expenses,% 99% 162% 170% 238% Profit / NOI, % 24% 32% 38% 57%
EQUITY
Net operating income (NOI), UAH million 260 260 200 130 COST/INCOME, % 438 369 295 174 Non-interest income / Operating expenses,% 11% 13% 19% 41%
LIQUIDITY Highly liquid assets, UAH million 312 372 177 58 Short-term liquidity**, % 75% 73% 75% 101% Liquidity coverage ratio, LCR Total** 125% 118% Liquidity coverage ratio, LCR FX** 370% 306%
* — preliminary data (not confirmed by an audit) ** — NBU standards FINANCIAL (in UAH thousands) 31 December 31 December 31 December 31 December 2019 2018 2017 2016 STATEMENTS ASSETS
Cash and cash equivalents 311,616 372,004 177 208 58,242 BALANCE Loans and debts of clients 2,347,172 1,398,873 430 858 184,332 SHEET Investments in securities 562,404 297,795 150 103 62,044 Fixed assets and intangible assets 69,058 21,190 12 863 6,392 Other assets 163,208 24,305 6 232 1,961 Total assets 3,453,459 2,114,167 777 264 312,971
LIABILITIES Funds of banks 1 - 2 - Funds of clients 2,860,617 1,665,238 460 672 99,240 Other liabilities 95,255 47,884 26 743 25,953 Total liabilities 2,955,872 1,713,123 487 418 125,194
EQUITY Share capital 365,120 260,000 200 000 129,779 Reserve and other funds of the bank 35,404 29,844 25 554 22,791 Retained earnings (uncovered loss) 97,063 111,200 64 292 35,208 Total equity 497,587 401,044 289 846 187,778 Total liabilities and equity 3,453,459 2,114,167 777 264 312,971 31 December 31 December 31 December 31 December STATEMENT (in UAH thousands) 2019 2018 2017 2016 OF PROFITS Interest income 392,426 234,242 60,713 27,418 AND LOSS Interest expenses -240,525 -108,076 -11,381 -3,790 Net interest income / (Net interest expense) 151,901 126,166 49,332 23,627
Commission income 133,649 1,118,604 36,982 3,971 Commission expenses -11,131 -13,146 -6,892 -531 Net commission income / (Net commission expense) 122,518 105,458 30,090 3,440 Trading result 93,378 103,904 89,489 58,350 Other operating income 34,908 15,120 1,389 1,984 Net operating income / (Net operating loss) 402,705 350,648 170,301 87,401
Employee benefits -119,122 -65,454 -35,138 -14,485 Depreciation and amortization costs -9,703 -6,282 -3,432 -1,389 Other administrative and operating expenses -123,777 -64,898 -32,674 -10,964 Operating cost by Business -252,603 -136,634 -71,245 -26,838
Net operating profit / (loss) to reserves 150,102 214,014 99,056 60,563 - Net loss / (profit) from increase / (decrease) in reserves -31,690 78,039 -20,484 1,722 Profit / (loss) before tax 118,412 135,975 78,572 62,285 Income tax expenses -21,870 -24,774 -14,277 -12,249 Profit / (loss) 96,543 111,200 64,295 50,036 BANK’S POSITION* BANK ALLIANCE JSC The growth rates are ahead of BS IN THE BANKING SYSTEM 29 OF UKRAINE 38 61 78
1 January 2017 1 January 2018 1 January 2019 1 December 2019
RETURN ON EQUITY SHARE OF NPL** Extremely low NPL level High profitability, even during a deep crisis in BS
TYPE BS BANK ALLIANCE 40% 34% 30% 37% 15% 22% Individuals 37% 2.5%
2016 2017 2018 2019 Legal 54% 0.5% -16% entities Total 50% 0.5%
BS -117% * — by net assets BANK ALLIANCE JSC ** — indicators are given as of 1 December 2019 MAJOR PARTNERS OF THE BANK SOCIAL ACCOUNTABILITY Since 2016, JSC BANK ALLIANCE has implemented its own strategy of social and charitable programs, worked on creating a positive im- age and tries to engage in solving social problems of the country as often as possible. Charitable projects for the Bank are not a one-time spontaneous manifestation of charity, but an individual are of the development strategy and an opportunity to positively influence the society.
By providing sponsorship and charity support, JSC BANK ALLIANCE: supports initiatives in education, culture, holds children’s sports competitions, supports sports teams; makes targeted charitable donations; helps cancer patients.
For example, in the autumn of 2018, the Bank sponsored children’s aikido and freestyle wrestling competitions among juniors in the Kyiv region, and in December, children’s freestyle wrestling competitions were held in Ukrainka with our support.
Assistance to children is definitely a priority among social activities. The Bank pays attention to both charity, sports and cultural develop- ment programs. For the last 3 years, BANK ALLIANCE JSC donates a portion of its annual income to charity needs on 19 December each year. Thus, in 2018, the Bank transferred washing machines, dryers, furniture to rehabilitation rooms, fruits and sweets to Zinkivka О.V. Syniahovskyi Orphanage, which is the home to 129 children with various developmental disabilities, ICP, and mental retardation.
In May 2019, BANK ALLIANCE JSC joined the support of the #Мамапоруч flash mob held by the Zaporuka Charitable Foundation. This flash mob is aimed at helping to build a new Dacha centre that can become a home for the period treatment of children with cancer. Dacha is the only residential building in Ukraine where children with cancer will live with their families who have come from different parts of Ukraine for treatment. The bank could not help but send a corporate donation to support the construction of the Dacha centre for children with cancer.
Traditionally, at the end of the year, the Bank sends aid to children who currently need help. Including thanks to each of our clients, on 19 December 2019 the Bank was able to transfer an instrument sterilization device to the Children’s Operating Centre of the National Cancer Institute, where 300 children from all regions of Ukraine are treated annually. These are children with all the most severe types of malignant neoplasms. Each child undergoes surgery or any other procedure that requires sterile materials. The availability of high-quality sterilizer in the operating room will enable surgeries in modern conditions.
The most dear result of future social investment for the Bank is healthy, educated and happy children who will be the cornerstone of the Ukrainian nation in the future. TEAM
PAVLO NATALIIA SHCHERBAN BOCHKOVSKA First Deputy Chairman Chief Accountant, of the Board, member of the member of the Board Board
OLEKSANDR YULIIA VIKTOR KRUK FROLOVA BURKYTSIA Deputy Chairman of the Board, Chairman of the Board Deputy member of the Board Chairman of the Board member of the Board
OLHA KOSTIANTYN LAKTIONOVA MOISEIENKO Head of the Financial Director for Analysis Monitoring Department and Agribusiness Development member of the Board Programs, member of the Board HUMAN RESOURCES Taking into account the needs and development of employees is one of the most effective strategies for success- ful business. Therefore, the Human Resources Management Strategy of the Bank is based on the professionalism, efficiency, motivation and involvement of each employee to achieve the Bank’s strategic objectives.
The matters of labour organisation and remuneration terms at the Bank are regulated in accordance with the applicable laws of Ukraine on labour, the Personnel Management Policy of the Bank, the Collective Employment Agreement, Regulation on Further Training and Education of Employees, Regulations on Work Standardization and Remuneration, Regulation on Employee Bonuses and Allowances. They provide for payments to employees of all levels, changes in wages, lists and amounts of social benefits, including financial aid.
The Bank supports and respects the protection of human rights, that are internationally proclaimed and enshrined in the Universal Declaration of Human Rights adopted by the UN General Assembly. It respects human rights and freedoms without discrimination, regardless of gender, race, nationality, language, age, place of residence, religion or political opinion.
Much attention is paid to employee training (distance training, attendance of seminars, conferences, etc.), as in- vestment in the personnel is an investment in the future of the Bank. Corporate events are held on a regular basis, which allows to create and develop a favourable atmosphere in the team.
That is, BANK ALLIANCE JSC is: The bank that values and takes care of its employees That enables employees’ personal and professional development, so onlythe best professionals would like to work here Where employees feel they are actively participate in every process That provides its employees with a decent financial well-being and social position That is interesting to work in The Bank one can be proud to work in; the bank enjoying respect and employees who are confident in their future Kyiv, 50 Sichovykh Striltsiv Str. Telephone: 0 800 60 22 22 www.facebook.com/bankalliance.ua/ www.bankalliance.ua