2012 ANNUAL REPORT ANNUAL REPORT Content
Letter to shareholders, customers and partners of Belagroprombank .... 69 Jakub Kolas . O my land, my land so lovely… ...... 71 Highlights 2012 ...... 73 Jakub Kolas . The stream ...... 75 Market share...... 77 Jakub Kolas . Sunrise ...... 79 Resource potential ...... 81 Jakub Kolas . My native nook ...... 83 Retail banking ...... 85 Yanka Kupala . Sping ...... 89 Corporate banking...... 91 Yanka Kupala . Maple and hazel ...... 95 International cooperation...... 97 Yanka Kupala . The reaper ...... 101 Credit ratings of JSC Belagroprombank...... 103 Yanka Kupala . Heritage ...... 105 Correspondent banks...... 107 Maksim Bogdanovich . In Winter ...... 111 Financial statements in accordance with the national standards. Auditors’ report ...... 113 Maksim Bogdanovich . Above the white down of the cherries ...... 117 Balance sheet as of January 1, 2013...... 119 Maksim Bogdanovich . Rondeau ...... 121 Profit&loss statement 2012...... 123 Maksim Bogdanovich . Weavers from Slutsk ...... 125 Outlook for 2013...... 127 ANNUAL REPORT
Dear shareholders, customers and partners of Belagroprombank
The year 2012 was the Year of the Book in Belarus. This provided the basis for the concept of the annual report of JSC Belagroprombank. Our “Volume of Poems” will familiarize you with Belagroprombank’s main achievements for the year 2012 and recall in memory classic works of Belarusian literature. In 2012 JSC Belagroprombank demonstrated good performance in all key segments of business. In our opinion, this was achieved through correct priorities for solution of tasks defined in the bank’s current development strategy, professional teamwork of our staff members and continued con - structive relationships with our customers and business partners. Belagroprombank worked hard and used best endeavours to reach its financial targets and strengthen its position in core business fields. We are grateful to our employees for their professionalism, dedication and contribution to our performance. We thank our customers for their continued trust, loyalty and desire to move forward together which are cru - cial factors to our success.
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O my land, my land so lovely…
Poem “Symon The Musician”
O my land, my land so lovely, Well-loved corner of my race! What in God’s world is more beloved Than these banks, with brightness graced, Where the rivers glitter silver, Where the woods hum murmuring song, Where buckwheat breathes honey, quivering Cornfields murmur on and on; Than the monuments unending Of the marshes, of the pools, Where wide space its thoughts is blending Under freshets gushing cool, Where the osiers weep in autumn, Where in spring bright meadows blow, Where birch-trees in a path long-trodden Like a lovely highway grow? 1911-1925
Translated by Vera Rich
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Highlights 2012
JANUARY JUNE According to the resolution of JSC Belagroprombank was once the Council of Ministers of the Re - again placed on the list of Top 1000 public of Belarus as of 19.01.2012 World Banks and 25 largest banks of No.55, JSC Belagroprombank became Central and Eastern Europe produced the prize winner of the Government annually by the Banker magazine. for achievements in the field of The Bank adopted 3D-Secure quality. technology offering enhanced secu - rity for online purchasing using credit MAY and debit cards. Belagroprombank jointly with Belarus Football Federation held a OCTOBER large-scale campaign titled “Happy Belarus' first contactless transac - Soccer Ball” during which 18 000 tion using VISA payWave technology first grade students from all rural area schools of the country became was performed at the payment termi - happy owners of soccer balls from nal of Belagroprombank in one of Belagroprombank. Minsk cafes.
JUNE NOVEMBER Belagroprombank and SIMEST SpA JSC Belagroprombank was hon - signed a cooperation agreement and oured by Commerzbank AG with an agreed to assist Belarusian and Ital - International STP Excellence Award ian enterprises, business associations for achieving the highest quality of and financial institutions to approach formatting payments channeled each other aiming to implement in - through Belagroprombank’s corre - vestment projects with participation spondent accounts with the German of the Italian enterprises in the Re - public of Belarus. bank.
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The stream
Through the alders, the shrubs, There, where nightingales sing, Murmurs and softly sobs. Silvery-toned, the spring. Willows, like mothers, their heads Over the stream bow down. Bushes into it glance, See their luxurious crown. Round about it there stand Rushes, reeds, and the sedge. Flowering meadows as well Spread from far to its edge. Sometimes at night the stars, Seen in its waters, gleam. Storm-clouds which often pass Also glance in the stream. Grasses above it bend, Loosen their frilly locks, While the spoiled favourite still Lightly with laughter rocks. Here to the forest it runs, Here round a mound it swings. Sometimes it angrily drums, Sometimes it kindly sings. All may enjoy its song, Ceaseless, and sweet to the breast. Lulled by its peaceful refrain, You as well will find rest. 1909 Translated by Walter May
75 ANNUAL REPORT Market share
In 2012 JSC Belagroprombank maintained its position as one of the leaders in the national financial market, contributing significantly to the performance of the banking sector of the Republic of Belarus, and continued to expand its presence in key segments of the national financial market. At the end of 2012 Belagroprombank retained its second place among other Belarusian banks in terms of authorized fund and equity, with a 22,1% and 18,5% market share respectively. In the course of 2012 corporate and retail customer funds attracted by the bank grew more than 1,5-fold. As of January 1, 2013 Belagroprombank has more than 1/4 share in corporate deposits in local currency (leading position among other Belarusian banks), and almost 15% share in retail deposits (second place) accumulated by the banking system of the Republic of Belarus. Belagroprom - bank has almost 1/5 share in the total resource base of the national banking sector. During 2012 Belagroprombank was a noticeable player in the loan market. At the year-end 2012 Belagroprombank’s had a 22,1% share in gross lending to economy. Belagroprombank ranks second in terms of corporate loan portfolio, and is the leader by loans in local currency. Belagroprombank enters top three leaders in the national banking system and retail lending.
Market share of JSC Belagroprombank in the banking sector of the Republic of Belarus, %
22,1 27,0 19,0 18,5 16,9 14,7 7,7
Authorized Equity Resource Corporate Retail Corporate Retail loans fund base deposits deposits loans (excluding preferential loans )
77 ANNUAL REPORT Sunrise
In the east the sky is playing, Gleaming colours drops, Sprinkles gold upon the forest And upon the copse. Slightly trembles and spills over Crimson in the east – That is heaven smiling, greeting Man and bird and beast. Answering laughter, happy laughter, Runs through rocks and rills. Time of dawn – the time benevolent... Stars fade o'er the hills. Wider, wider then the dawning Opens up her wings, Like a fire, a spring is spouting Where the horizon swings. Sheaves of rays in sumptuous splendour Sow red gleams o'erhead – That is heaven spreading mantles For the sun to tread. O'er the fields the dark disperses, O'er the hollows low; In the forest the mist-cloud rises, Meadows bathe in dew. And the fiery filaments flying Weave a red silk gown – That’s the clouds the sunrise greeting, Making day a crown. How delicious the rye is smelling! What a peaceful time! Ah, how beautiful, how glorious, Decorous and fine! Heaven has gathered here together Hues of wondrous flowers… Where’s the response to such rich beauty In this world of ours? 1908 Translated by Walter May
79 ANNUAL REPORT Resource potential Thanks to active participation in core segments of the financial market and build-up of own financial resources, the bank grew its resource potential by BYR 10 trillion, or 1,2-fold, ending the year at BYR 61 trillion. In terms of resource potential Belagroprombank ranks second among its banking peers, with a 1/5 share of the domestic banking sector’s resource base. Profitable performance and capitalization of the revenue in the bank’s funds in the accounting period ensured the growth of the Belagroprom - bank’s equity by BYR 0,5 trillion (1,1-fold increase). The growth of the bank’s resource base was mainly contributed by ramp up of funds on deposit and current accounts of retail and corporate cus - tomers (by BYR 9,2 trillion). More than 80% of the total volume of funds accumulated on customer accounts were attracted on a fixed-term basis, which gives the necessary stability to Belagroprombank’s resource potential and allows active use of this financial source for long-term lending to the real sector of economy. Foreign borrowings transactions are actively used to build up Belagro - prombank’s resource potential. As of January 1, 2013 the volume of borrow - ings raised by Belagroprombank from foreign banks totalled BYR 6,5 trillion. Growth of resource base enabled the bank to provide additional financ - ing to the Belarusian economy in the amount of BYR 9,5 trillion.
Dynamics of resource Resource base structure of base, BYR bln. JSC Belagroprombank as of Jabuary 1, 2013 60 965 50 949 Due to resident Other liabilities, banks, 8,5% 7,3% 31 354 Due to non- resident banks 20 240 10,6% 15 570 8213
Equity, 14,5% Customer accounts and funds raised through issue of securiries, 0 3 8 9 1 2 1 1 0 0 1 1 59,1% 0 0 0 0 0 0 2 2 2 2 2 2 ...... 1 1 1 1 1 1 0 0 0 0 0 0 ...... 1 1 1 1 1 1 0 0 0 0 0 0 81 ANNUAL REPORT
My native nook
Poem “The New Land” My native nook, dear land that bred me!.. I have no power to forget thee! Often when, from roadway weary, From my life’s springtime, poor and dreary, To thee on wings of thought I hasten, And my poor soul finds rest and grace then.
And now, again, before me rises That nook in all its lovelinesses, The curving stream-bed of the freshet, The spruce tree and the pine that ever Above the stream embrace together, Like young folk in their love’s devotion. The last eve before separation. I see the woods around the homestead, Where merrily girls in the gloaming Sang their songs in a lovely chorus, Late from work passing by the forest.
Notes of their fluent songs, far-trilling, Once again by the woods were mirrored, And with them all the hills resounded. Forth in free billows, gladness bounded, And firs and spruces sempiternal. Beneath those song-notes, young and vernal, Stood silent in some meditation, And in their quiet murmuration Were born the prayers of evening whispered, Aloft, high into holy distance. 1911-1923
Translated by Vera Rich
83 ANNUAL REPORT Retail banking
Last year Belagroprombank continued its commitment to modernizing and extending the product range for private customers, as well as improving the quality of retail customer service, which had a favourable impact on per - formance in the retail banking sector. In 2012 retail client base of JSC Belagroprombank increased by more than 300 000 to nearly 1,7 million. In the accounting year balances on on-demand accounts with JSC Bela - groprombank grew 2,3-fold (by 1,5 times exceeding the growth rate of its banking peers) and totalled more than BYR 1 trillion. Retail deposits portfolio increased by BYR 839 bln., or 1,7 fold (in foreign currency USD 361 mln., or 1,6-fold). In 2012 Belagroprombank’s share in re - tail time deposits grew from 15% to 15,9%. In 2012 funds attracted by Belagroprombank from individuals by means of own bonds more than doubled (up to BYR 945 bln.). Belagroprombank boasts nearly a 90% share in the total grow rate of funds attracted from in - dividuals by means of bonds issued by Belarusian banks. Overall, in 2012 retail customer funds contributed to a BYR 5,2 trillion
Dynamics of retail customer funds, BYR bln.
12 587 7 348 2 858 2 128 1 509 1 171
01.01.2008 01.01.2009 01.01.2010 01.01.2011 01.01.2012 01.01.2013
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increase of the bank’s resource potential. Belagroprombank’s share in the directed toward service improvement and enhancing the possibilities to en - total volume of funds attracted from retail customers by the banking sector able customers to perform unassisted online financial transactions using grew from 14,2 to 15,3%. Internet banking. As a result, Internet banking interface was adapted for a Notwithstanding the reduced demand for retail lending products offered better customers’ intuitive perception thereof, while system functionality by Belarusian banks, which was in the first place due to high interest rates allows customers to pay for goods and services online without visiting the in the respective market, JSC Belagroprombank improved consumer charac - bank branch, as well as to monitor and manage their bank accounts. teristics of its lending products. This allowed the bank to maintain its stable rank in the top three players in retail lending. Belagroprombank is actively developing card technologies aiming to Dynamics of key indicators of card business performance provide all-inclusive retail banking services and loans and savings services. The bank’s customers are offered a full range of card products of Visa and Number of the bank’s infrustructure units accepting bank cards payments MasterCard international payment systems and BelCard national payment 11 321 system. In total, as at the year-end 2012 the number of Belagroprombank- 7 143 issued cards in circulation reached 1,2 million. 4 797 For its cardholders’ convenience, JSC Belagroprombank carries out con - 2 064 sistent activities to extend its payment infrastructure across the territory 1 808 of the Republic of Belarus. As of January 1, 2013 Belagroprombank’s network 1 397 of terminal equipment supporting transactions using credit and debit cards (ATMs, information kiosks, payment terminals) numbered more than 11,3 thousand. In the accounting year the bank implemented a set of measures
Dynamics of key indicators of card business performance 01.01.2008 01.01.2009 01.01.2010 01.01.2011 01.01.2012 01.01.2013 Belagropombank – issued cards in curculation, thsd
1 235 1 213 1 030 854 591 344
01.01.2008 01.01.2009 01.01.2010 01.01.2011 01.01.2012 01.01.2013
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Spring
Gone the sharp cold and the frost and the blizzard, Never a soul will feel frozen henceforth, With the warm sunshine, with foliage brilliant, Spring has returned and rewarded the earth.
Rivers which yesterday lay soundly sleeping, Now fly a-streaming, their wavelets a-dance; Fishes go flashing and splashing and leaping, Up at kind skies from the water they glance.
Dark dreaming forests which slept through the winter, Now their glad chorus have struck up again; Leaves gently rustle and birds are a-twitter, Woodpeckers hammer, the nightingale’s plain.
Fields are bedizened in fresh luscious verdure, Cattle in pastures are browsing away; Round them there goes with his reed-flute the herder, Rambles and pipes, for his spirits are gay.
Play, play, little flute! Play gay, so it pleases! Pipe in the springtime and joy to me bring; Tuned to the forests, the birds and the breezes, Pipe me of happiness, sing me of spring! 1906 Translated by Walter May
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Corporate banking
In 2012 Belagroprombank continued to strengthen its position in cor - porate customer service. A wide range of financial services, a custom-tai - lored approach, a flexible pricing and interest rate policy and the bank’s highly professional stuff enabled the bank to not only meet the demands of its existing corporate customers and raise their loyalty, but also to gain trust of new enterprises. Over the past year Belagroprombank's customer base increased by 2,6 thousand customers and totalled over 44 thousand at the year-end 2012. The bank remains committed to improving technological aspects of cor - porate customer service, including through use of remote service systems. Over the accounting year the number of corporate users of Client-Bank and Internet-Client services provided by Belagroprombank increased by nearly 20% and reached 13,6 thousand by January 1, 2013.
Corporate clients base
44 103 41 549 37 070 33 299 29 915 27 069
01.01.2008 01.01.2009 01.01.2010 01.01.2011 01.01.2012 01.01.2013
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Dynamics of corporate deposits, BYR bln. By closely cooperating with the largest domestic capital-intensive busi - nesses and actively raising temporary free funds from its corporate cus - 8 773 tomers, Belagroprombank managed to increase its corporate deposit portfolio by more than 20%. As of January 1, 2013 the bank’s corporate de - 7 208 posit portfolio totalled BYR 8,8 trillion, boasting a 20% share in the banking sector’s portfolio of corporate deposits in local currency. 2 719 Lending to the real sector of the national economy is one of the most 1 159 important tasks of Belagroprombank, giving priority to its traditional cor - 1 096 porate customers – agroindustrial entities. In 2012 the bank’s corporate 833 loan portfolio grew by 25,8% to BYR 45,4 trillion. Belagroprombank’s market share in the banking sector’s portfolio of local currency loans exceeded 40%. As a government agent on financing state programs, the bank provided loans to the total amount of BYR 12,1 trillion in 2012. Lending was mainly earmarked for construction and reconstruction of commercial dairy farms and other production facilities at agroindustrial enterprises, housing con - struction in rural area, financing of programs for innovative development 01.01.2008 01.01.2009 01.01.2010 01.01.2011 01.01.2012 01.01.2013 of certain fields of the national economy, as well as seasonal activities of the agricultural sector (sowing campaigns, harvesting and procurement of agricultural produce). Dynamics of corporate loans, BYR bln. 45 375 36 080 24 399 17 704 12 496 6 716
01.01.2008 01.01.2009 01.01.2010 01.01.2011 01.01.2012 01.01.2013
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Maple and hazel
With spring’s song of swans returning, And casting off winter’s spell, The maple to hazel is murmuring On the banks of the mournful dell.
The greening leaves are all praising The heavens in mutual tongue: And the morning in dew is laving, And revels in noonday sun.
To the setting orb obedient, Which bids mother earth goodbye; Mysterious in night’s dark medium, The moon and stars peep on high.
There’s sound of mermaids’ laughter, The flapping of night-bird’s wings, The wind swaying drunkenly after; The splashing of crystal springs.
A wonderful music arises In tales sleepy rushes tell… The maple the hazel caresses, And casts off the winter’s spell. 1910
Translated by Walter May
95 ANNUAL REPORT International cooperation
Over a number of years, JSC Belagroprombank has been one of the leaders in terms of attracting foreign facilities into the country's economy, which evidences the high rating of the bank’s performance and its buona fide rep - utation among foreign partners At present, JSC Belagroprombank actively cooperates with 87 foreign fi - nancial institutions from 24 countries around the world. For more complete satisfaction of customers in target financing of their foreign trade projects,
in 2012 Belagroprombank established cooperation with banks such as Zurcher Kantonalbank (Switzerland), JSC^ “SMP Bank” (Russian Federation), JSC “Alfa Bank” (Russian Federation), Ceskoslovenska' obchodna' banka, a.s. (Slovakia). At the year-end 2012 Belagroprombank entered into coop - eration with forfeiting companies DF Deutsche Forfait AG (Czech Republic) and Swiss Forfait s.r.o. (Czech Republic) and implemented joint projects worth more than USD 20 mln. over a short period of time.
Dynamics of foreign borrowings (excluding treasury operations), USD mln.
877 794 727
533 431 290
2007 2008 2009 2010 2011 2012
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In 2012 foreign credit facilities raised by Belagroprombank enabled it to implement 411 foreign trade contracts initiated by Belarusian en - terprises for the total value of USD 794 mln., of which USD 64 mln. long- term financing, USD 647 mln. short-term financing, USD 83 mln. confirmation of letters of credit without financing. To improve foreign economic activity services for its corporate cus - tomers and minimize their financial risks, Belagroprombank is consis - tently extending the scope of letter-of-credit payments and other types of documentary operations. In 2012 Belagroprombank performed 632 documentary operations worth USD 504 mln.
Structure of foreign borrowings raised in 2012
Confirmed letters Long-term of credit without financing, 8,1% financing, 10,4%
Short-term financing 81,5%
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The reaper
Like a very empress In her golden crown, She goes in her garland, Where the rye hangs down. From rye-ears her garland – Witness to her youth – Like a flower in the garden, Shines on her in truth. What a happy bosom In her rosy vest! In her hand a sickle, Toothed, of steel the best. And the breeze embraces Her young waist as it flies, And the sun-rays kiss her, Neck, and face, and eyes. Ripened ears are bending, Low before her bow, While the pear-trees wonder By the grass path now. She, just like an empress, Happy, bright and gay, With a song be-girdles Golden sheaves today. Boldly ‘neath the sunshine, And herself a sun, Here she goes in the reaping In our land begun. 1911
Translated by Walter May
101 ANNUAL REPORT Credit ratings of JSC Belagroprombank
The bank’s financial position is rated by the international rating agen - cies Standard & Poor's and Moody’s Investors Service.
Ratings of Belagroprombank as of January 1, 2013: Standard & Poor’s
Long-term foreign and local currency rating B
Short-term foreign and local currency rating C
Outlook Stable Moody’s Investors Service
Foreign currency long-term rating Caa1
Foreign currency short-term rating Not Prime
Local currency long-term rating B3
Local currency short-term rating Not Prime
Bank financial strength rating E+
Outlook Negative
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Heritage
From forebears’ ages, long since gone, A heritage has come to me, Among strange folk, among my own, Me it caresses, motherly. Of it to me dream-fables sing Of first thaw-patches, vernally, The woods’ September murmuring. An oak-tree lone, half burned away. Memories of it, like storks aclack Upon the lime have woken me, Of a mossed fence, old, gone to wrack, Fallen near the village, brokenly; The dreary bleat of lambs that pours Out in the pasture, endlessly, The caw of the assembled crows, On the graves in the cemetery. And through black night and through white day I keep, my watch unceasingly, Lest this my treasure goes astray, Lest by drones it should eaten be. I bear it in my living soul Like torch-flame ever bright for me, That through deaf darkness to my goal, Midst vandals it may lighten me. With it lives my thought-family. Bringing dreams of sincerity… And its name, all-in-all must be My native land, my heritage. 1918
Translated by Vera Rich
105 ANNUAL REPORT Correspondent banks
Austria WGZ Bank AG, Dusseldorf Landesbank Berlin AG, Berlin UniCredit Bank Austria AG, Vienna Landesbank Baden Wuerttemberg, Raiffeisen Bank International AG, Vienna Stuttgart VTB Bank (Austria) AG, Vienna
Raiffeisenlandesbank Obero: sterreich AG, Landesbank Hessen Thueringen Linz Girozentrale, Frankfurt am Main Kreissparkasse Esslingen Nuertingen, Belgium Esslingen KBC Bank NV, Brussels VTB Bank (Deutschland) AG, BNP Paribas Fortis NV/SA, Brussels Frankfurt am Main KBC Bank Deutschland AG, Bremen Bulgaria Bayerische Landesbank, Nuernberg Bulgarian Development Bank AD, Sofia Georgia Raiffeisenbank (Bulgaria) EAD, Sofia АО «Инвестбанк», Tbilisi Great Britain Denmark VTB Capital plc, London FBN Bank (UK) Ltd, London Danske Bank A/S, Copenhagen The Royal Bank of Scotland plc, London Sydbank A/S, Copenhagen Hungary Israel Hungarian Export Import Bank Plc., Bank Leumi le Israel B.M., Tel Aviv Budapest Bank Hapoalim B.M., Tel Aviv K&H Bank Zrt., Budapest Italy OTP Bank Plc., Budapest UniCredit Bank Hungary Zrt., Budapest Unione di Banche Italiane Scpa, Bergamo Citibank Europe plc., Hungarian branch Banca Monte dei Paschi di Siena S.p.A., office, Budapest Siena Intesa Sanpaolo S.p.A., Turin Germany Banca Popolare di Vicenza Scpa, Vicenza AKA Ausfuhrkredit Gesellschaft mbH, UniCredit S.p.A., Milan Frankfurt am Main Banco Popolare Soc. Coop., Verona Deutsche Bank AG, Frankfurt am Main Banca Antonveneta S.p.A., Padova DZ Bank AG, Frankfurt am Main BHF BANK Aktiengesellschaft, Kazakhstan Frankfurt am Main Commerzbank AG, Frankfurt am Main JSC BTA Bank, Almaty UniСredit Bank AG, Munich JSC Kazkommertsbank, Almaty
107 ANNUAL REPORT Latvia JSC “MTBank”, Minsk JSC “URALSIB”, Moscow Finland PJSC “Trustbank”, Minsk JSC “FRB”, Moscow АО “Baltic International Bank”, Riga Nordea Bank Finland plc., Helsinki CJSC VTB Bank (Belarus), Minsk JSC Bank of Khanty-Mansiysk, AO “Trasta Komercbanka”, Riga Pohjola Bank plc., Helsinki CJSC “Alfa-Bank”, Minsk Khanty-Mansiysk АО “Rietumu Banka” , Riga Danske Bank plc., Helsinki JSC “Delta Bank”, Minsk JSCB “Sviaz-Bank”, Moscow АО “UniCredit Bank” , Riga JSC “InterPayBank” , Minsk “NOMOS-BANK” (JSC), Moscow France АО “Swedbank” , Riga CJSC “BTA Bank”, Minsk JSC “OTP Bank”, Moscow АО “Baltikums Bank” , Riga VTB Bank (France) SA, Paris USC BelSwissBank, Minsk JSC “Bank of Moscow”, Moscow JSC “SMP Bank”, Moscow Societe Generale, Paris Lithuania JSC “Alfa-Bank Finance” , Minsk BNP Paribas SA, Paris JSC “Idea Bank” , Minsk CJSC “ProBank”, Moscow AB DNB Bankas, Vilnius CJSC “Bank BBSB” , Minsk Slovakia Czech Republic AB SEB Bankas, Vilnius JSC “Zepter Bank” , Minsk
Eximbankа SR, Bratislava “Swedbank”, АВ, Vilnius JSC “Eurobank” , Minsk ^ Ceskoslovenska obchodni banka, a.s., Vseobecn'a u' verov'a banka, a.s., Bratislava AS “UniCredit Bank ” Lithuania Branch, JSC BPS-Sberbank , Minsk Prague
Ceskoslovenska obchodna banka, a.s.,
U^ niCredit Bank Czech Republic, a.s., Prague Vilnius JSC “JSSB Belarusbank”, Minsk ^
Bratislava ' JSC “Development Bank of the C^eska sporitelna, a.s., Prague Netherlands UniCredit Bank Slovakia a.s., ' Republic of Belarus”, Minsk Ceska exportni banka, a.s., Prague
Bratislava Evropsko-rusk'a banka, a.s., Prague ABN Amro Bank N.V., Amsterdam “Belinvestbank” JSC, Minsk ^ Komer сni banka, a.s., Prague Rabobank Nederland, Utrecht “Priorbank” JSC, Minsk Slovenia Credit Europe Bank N.V., Amsterdam Bank BelVEB OJSC, Minsk Nova Ljubljanska Banka d.d., Ljubljana Switzerland Norway OJSC Paritetbank, Minsk OJSC BNB-Bank, Minsk UniCredit Banka Slovenija d.d., Ljubljana Credit Suisse AG, Zurich DNB Bank ASA, Oslo Banque de Commerce et de Placements JSC Belgazprombank, Minsk USA Poland OJSC “Technobank”, Minsk SA, Zurich “Fransabank” OJSC, Minsk Deutsche Bank Trust Company Americas, BNP Paribas (Suisse) SA, Geneva BRE Bank SA, Warsaw “Bank Moscow-Minsk” JSC, Minsk New York Zuercher Kantonalbank, Zurich Bank Pekao SA, Warsaw . JSC “Eurotorginvestbank”, Minsk Citigroup Inc., New York Bank BGZ SA, Warsaw OJSC HCBank, Minsk Sweden Bank Gospodarstwa Krajowego, Tajikistan CJSC “BIT -Bank”, Minsk Warsaw SEB AB, Stockholm JSC “Agroinvestbank”, Dushanbe Swedbank AB, Stockholm Bank Zachodni WBK SA, Wr оc/law Russian Federation Svenska Handelsbanken AB, Stockholm Raiffeisen Bank Polska SA, Warsaw Turkey Nordea Bank Polska SA, Gdynia JSCB “Investtradebank”, Moscow Yapi ve Kredi Bankasi AS, Istanbul Estonia PBP Bank SA, Warsaw CB “IntrustBank” (JSC), Moscow T.C. Ziraat Bankasi AS, Ankara “Gazprombank” (JSC), Moscow AS UniCredit Bank Estonian Branch, JSCB “NOVIKOMBANK”, Moscow Portugal Ukraine Tallinn CB “EUROTRUST” (CJSC), Moscow Banco Finantia SA, Lisbon Swedbank AS, Tallinn JSC “Russian Agricultural Bank”, Moscow JSC CB “PRIVATBANK”, Dnepropetrovsk JSC “The State Export-Import Bank Republic of Belarus JSC “ALFA-BANK”, Moscow Japan JSC “Promsvyazbank”, Moscow of Ukraine”, Kiev CJSC “Absolutbank”, Minsk JSC “Sberbank of Russia”, Moscow JSC VTB Bank (Ukraine), Kiev Sumitomo Mitsui Banking Corporation, JS RDB-Bank, Minsk JSC VTB Bank, St.Peterburg JSC “Oschadnybank”, Kiev Tokyo
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In winter
Hail, frosty evening, ringing, calling! Hail, crunching crisp, soft spread of snow! No snowstorm blows, the wind has fallen, And freely the light sledges go.
Like phantoms, birches whitely hover, Under the night’s dark-blue quilt, In the heavens, the stars shiver, Frozen utterly, frost-chilled.
The moist moon from on high is shedding A shaft, transparent and aglow, And with silver cloaks is spreading The blueing acres of the snow.
With sledges cleave the snow, good horses! Copper bells, ring out with glad zest! Forests and fields fly in swift courses, The blood is boiling in the breast! 1911
Translated by Vera Rich
111 ANNUAL REPORT Financial statements in accordance with the national standards. Auditors’ report
To the shareholders of JSC Belagroprombank 3 Zhukov Ave., Minsk Republic of Belarus, 220036 JSC Belagroprombank is registered in the Na - tional Bank of the Republic of Belarus on 03.09.1991, registration number 20. Reference 1103-01 Auditors’ report on the annual financial statements of JSC Belagroprombank for the year 2012
We have audited the attached annual financial statements of the Joint- Stock Company Belagroprombank (hereinafter referred to as “The Bank”), comprising the balance sheet as of January 1, 2013, the profit and loss state - ment, statements of changes in funds and cash flow statements for the year 2012 and explanatory notes.
Management’s Responsibility for the Annual Financial Statements The Bank’s management is responsible for the preparation and fair pres - entation of the annual financial statements in accordance with the legislation of the Republic of Belarus, as well as for an internal control system which, in its opinion, is relevant to the preparation of annual financial statements that are free from material misstatements, whether due to error or fraud.
Auditors’ Responsibility Our responsibility is to express an opinion on these annual financial statements based on our audit, and to obtain evidence on the Bank’s com - pliance with secure functioning standards. We conducted our audit in accordance with the requirements of the leg - islation of the Republic of Belarus and International Standards on Auditing provided that they are not in conflict with these requirements. Those stan - dards and requirements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether these annual financial statements are free from any material misstatement.
113 ANNUAL REPORT
An audit involves performing procedures to obtain audit evidence about approved by the resolution of the Board of the National Bank of the Republic the amounts and disclosures in the annual financial statements. The pro - of Belarus as of October 31, 2006 № 172 (as amended). cedures selected depend on the auditor’s judgment, including the assess - ment of the risks of material misstatement of the annual financial During the audit we found out that the Bank violated the secure func - statements, whether due to fraud or error. In making those risk assessments, tioning standards set by the National Bank of the Republic of Belarus for the auditor considers internal control relevant to the preparation and fair banks, stated on pages 55 and 72 of the explanatory notes. Other facts con - presentation of the annual financial statements of the Bank in order to de - stituting non-compliance with secure functioning standards in 2012, as set sign audit procedures that are appropriate in the circumstances, but not for by the National Bank of the Republic of Belarus, were not found. the purpose of expressing an opinion on the effectiveness of the Bank’s internal control. An audit also includes evaluating the appropriateness of the accounting policy used and the reasonableness of accounting estimates Vereshchagina Irina Vladimirovna made by the Bank’s management, as well as evaluating the overall presen - Director tation of the annual financial statements. Aboisheva Anna Mikhailovna We believe that the audit evidence we have obtained is sufficient and Head of Audit Group appropriate to provide our audit opinion. March 15, 2013 Minsk, Republic of Belarus Audit opinion Limited Liability Company KPMG In our opinion, the annual financial statements present fairly, in all ma - terial respects the financial position of the Joint-Stock Company Belagro - Certificate of state registration issued by prombank as of January 1, 2013, and its financial and economic performance Minsk City Executive Committee pursuant to and cash flows for the year 2012 in accordance with the requirements of the the decision dated 10.02.2011, UNP legislation of the Republic of Belarus regarding preparation of the annual fi - 19143410 nancial statements.
Opinion regarding other legislative requirements Our responsibility is also to assess the calculation methods and authen - ticity of information contained in the forms of prudential accounting, namely 2801 "Calculation of capital adequacy", 2807 "Report on special provisions against potential losses on off-balance sheet assets and operations", 2809 "Liquidity calculation", prepared by the Bank and presented as of January 1, 2013. The Bank’s management is responsible for the preparation of these forms of prudential accounting. Our responsibility is to express an opinion on authenticity of these forms of prudential accounting.
In our opinion, the abovementioned forms of prudential accounting as of January 1, 2013 are drawn up by the Joint-Stock Company Belagroprombank accurately in all material respects in accordance with the Instructions on preparation and presentation of the prudential accounting by banks and non- bank financial institutions to the National Bank of the Republic of Belarus,
114 115 ANNUAL REPORT
* * * Above the white down of the cherries, Like blue fire, soaring high, Cleaving, weaving pathways, lightly Darts – a blue-winged butterfly.
All around the air is trembling With the sun in golden strings, And almost too quiet for hearing It strums them with trembling wings.
And in waves the song is pouring, Gentle gleaming paean to spring. Is it not my heart that carols? Is it not my heart that sings?
Is it not a bell-voiced zephyr, Whispering where the thin shoots grow? Or perhaps the tall dry rushes By the river rustle so?
Not for us to understand it. Nor discover it, nor learn: The notes flying, quivering, ringing, Let me not to thinking turn.
Song bursts forth and gushes into The great world, unfettered, free. But who is it that will hear it? The poet alone, maybe. 1910
Translated by Vera Rich
117 ANNUAL REPORT Balance sheet
balance sheet as of January 1, 2013 (BYR, million)
№ Description Index Explanatory 2012 2011 п/п notes 1 ASSETS 2 Cash assets 1101 9,51 1 007 959,0 699 768,3 3 Precious metals and precious stones 1102 10 4 409,5 3 649,5 4 Due from the National Bank 1103 11,51 4 385 454,3 7 344 002,4 5 Due from banks 1104 12,51 902 741,2 852 117,8 6 Securities 1105 13,50,51 4 947 884,7 2 382 500,0 7 Loans to customers 1106 14,50,51 44 265 236,1 36 243 746,2 8 Derivative financial assets 1107 15,51 793,7 98,7 9 Long-term financial investments 1108 16,51 699 816,7 418 956,7 10 Fixed assets and intengible assets 1109 17,50 1 749 961,7 1 105 426,4 11 Assets intended for sale 1110 18 – 1 909,2 12 Other assets 1111 19,51 319 775,2 144 697,3 13 TOTAL assets 11 8 58 284 032,1 49 196 872,5 14 LIABILITIES 15 Due to the National Bank 1201 20,51 1 198 044,2 2 303 652,3 16 Due to banks 1202 21,51 10 587 711,5 9 112 027,7 17 Due to customers 1203 22,50,51 28 960 528,3 20 282 325,8 18 Securities issued by the bank 1204 23,50,51 7 455 310,5 8 841 508,6 19 Derivative financial liabilities 1205 24,51 – 7 014,2 20 Other liabilities 1206 25,51 603 627,0 328 167,8 21 TOTAL liabilities 120 48 805 221,5 40 874 696,4 22 CAPITAL 23 Authorized fund 1211 6,26 6 603 635,0 6 603 635,0 24 Share premium 1212 – – 25 Reserve fund 1213 27 330 189,9 250 189,9 26 Balance sheet items re-evaluation fund 1214 28 1 174 482,2 759 667,4 27 Retained profit 1215 29 1 370 503,5 708 683,8 28 TOTAL capital 121 9 478 810,6 8 322 176,1 29 TOTAL liabilities and capital 12 8 58 284 032,1 49 196 872,5
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Rondeau
Design of stars so fair and fine In the dark firmament is blazing; Waters of pools and marshes shine Mirroring in their depths this blazon. A mist into far space doth twine, A chair of frogs chants hymns of praising The beauty in the puddles shrined. And in them burns a fair, amazing Design.
Frogs curse the sun that hides from gazing The puddles' stars by day. The pine Woods hear, the field hears the croaked phrasing; But frog-songs o'er the mountain spine Rise not, where once some hand was tracing Design. 1911
Translated by Vera Rich
121 ANNUAL REPORT Joint-stock company Belagroprombank
Profit&loss statement 2012 (BYR, million)
№ Description Index Explanatory 2012 2011 п/п notes 1 Interest income 2011 31,50 10 509 366,3 5 722 226,6 2 Interest expenses 2012 31,50 7 615 876,9 3 865 787,9 3 Net interest income 201 31 2 893 489,4 1 856 438,7 4 Commission income 2021 32,50 811 953,6 457 509,6 5 Commission expenses 2022 32,50 165 277,8 87 908,4 6 Net commission income 202 32 646 675,8 369 601,2 7 Net income from transactions 203 33 1 075,0 1 853,5 with precious metals and precious stones 8 Net income from transactions 204 34,50 173,1 1 657,8 with securities 9 Net income from foreign currency 205 35,50 231 237,6 217 747,2 transactions 10 Net income from transactions 206 36 (73 975,1) (231 165,9) with derivative financial instruments 11 Net transfers to reserves 207 37,50 1 392 104,0 1 178 623,6 12 Other income 208 38,50 466 356,8 160 963,8 13 Operational expenses 209 39,50 1 291 477,1 702 965,0 14 Other expenses 210 40,50 188 364,2 92 084,8 15 Profit (loss) before tax 211 41 1 293 087,3 403 422,9 16 Income tax 212 42 232 280,1 100 575,4 17 PROFIT(LOSS) 2 5,30 1 060 807,2 302 847,5 18 Earnings per share in BYR 19 Basic earnings per ordinary share 22 43 321 118 20 Deluted earnings per ordinary share 23 44 – –
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Weavers from Slutsk*
From native home, from native tillage, To the Big House, for beauty’s sake, Luckless girls taken from their village, Girdles of woven gold to make. Long hours of labour they endeavour, Forgetful of their girlish dreams, Toiling at the broad weaving ever. Where the Persian pattern gleams. Outside the walls is smiling tillage, The sky shines fair beyond the pane, And thoughts go wandering, willy-nilly, There where the spring’s in flower again. There by the rye, in the far distance, The cornflowers gleam with azure still, And waves of chilly silver glisten, Where rivers gush between the hills; Dark frowns the forest’s jagged verdure, And hands, forgetful at the loom, Neglecting the designs of Persia, Weave in the native cornflower bloom. 1912 Translated by Vera Rich
* Slutsk – town in Belarus.
125 ANNUAL REPORT
Outlook for 2013
In the light of stability achieved in the domestic financial and cur - rency markets and the focus of the national economy on steady growth, Belagroprombank plans to maintain the dynamics of its key financials, strengthen its position across core segments of the banking services market and continue enhancing economic effectiveness of its performance.
Retail customer service will be further developed through gradual up - grade of retail product range, retail technology modernization and busi - ness processes optimization aimed at reducing the overall time limit for provision of services, as well as active promotion of card products.
To enhance the efficiency of interaction with corporate customers and minimize the costs of managing their cash flow, as well as create favourable conditions for businesses to efficiently manage their own cash assets, the bank plans to proceed with active implementation of remote service systems. Taking into account the state of market and customer needs, the bank will carry out activities aimed at adjusting the conditions for providing services, as well as offering the economic entities the optimal ways of interaction with the bank that suit the peculiarities of their busi - ness. The bank intends to continue activities aimed at creating favourable environment to enable target corporate customers to develop their core line of business. In particular, we expect to finalize the creation of the technical platform to provide full-fledged merchant acquiring service for retail and service businesses, define further steps to promote the devel - opment of agroecotourism, and elaborate and launch the implementation of the program of its participation in the development of the national mo - torway service.
Belagroprombank’s 2013 objectives also include further development of cooperation with foreign financial institutions focusing on raising for - eign borrowings into the domestic economy. Foreign borrowings will be the key contributor to the financing of foreign trade projects implemented
127 by corporate customers. Provided that the market conditions are favourable, the bank will consider economically acceptable schemes to raise untied credit facilities from international markets as an additional tool to diversify sources for the resource potential.
We set a target for 2013 to implement a set of activities related to fur - ther development of organizational aspects of structuring the work within the bank. They will be directed toward improving of corporate management mechanisms and enhancing the efficiency of internal control and risk man - agement systems.
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