annual report | 2014
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1. Dear shareholders, customers and partners of our bank! The year 2014 was the Year of hospitality in Belarus. This provided the basis for the concept of the annual report of JSC Belagroprombank. A hospitable host always serves the best dishes when receiving guests. We did the same while creating this annual report and focused on what our native Belarusian land grants us. In 2014 JSC Belagroprombank continued to actively and purposefully promote the efficient development of the economy in our country. According to the results in the reporting year the bank holds a stable second position on the key segments in the banking business, including equity, assets, credit investments and retail customer funds. Belagroprombank has over 15% market share in equity of the domestic banking system. Our share in lending to domestic business entities is over 20%, and the number of corporate customers exceeded 48,000 in the past year. JSC Belagroprombank is the market leader by corporate time deposits in local currency, and the dynamics of corporate time deposits of JSC Belagroprombank in 2014 is nearly twice that of the market. The corporate loan portfolio of JSC Belagroprombank for the year 2014 totalled about BYR 55 trillion. Nearly 70% of JSC Belagroprombank’s assets are invested into the real economy of the Republic of Belarus. The customer loyalty towards JSC Belagroprombank is annually proved by its retail depositors: JSC Belagroprombank has outperformed other banks in the Republic of Belarus in growing its retail time deposits. The retail deposits portfolio amounted to BYR 22,5 trillion in 2014. However, the past year has become one of the most controversial and difficult in the history of the bank, as well as a test of strength, reliability and the ability to take the heat. However, difficulties not only create barriers in work, but also motivate to seek and implement new solutions, improve the quality of work. JSC Belagroprombank takes exactly this position today, which allows us to be optimistic about the future. Anatoly LYSYUK, Chairman of the Board of JSC Belagroprombank
Wheat Wheat is one of the main food crops in Belarus. The level of frost-resistant varieties is among the factors affecting the yield of wheat. In comparison to Western European varieties, which completely die at the temperature of minus 17 0С, Belarusian wheat varieties are able to grow even at minus 22 0С.
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2. Highlights 2014 MARCH JSC Belagroprombank received an award at the Cbonds Awards in the category "Best broker in the bonds market", which proves the bank’s status as one of the leading players in the financing sector of the Republic of Belarus. Belagroprombank’s mobile application was placed on GooglePlay and AppStore, which is a mobile version of Internet Banking service. Authorized users can view the information on their cards and accounts, as well as perform various transactions and payments with cards. Become more mobile with QR codes, indicated below, to download Belagroprombank’s mobile application.
JUNE JSC Belagroprombank handed the certificate in the amount of one billion rubles to the Belarusian public Veterans Association. These funds were used to provide financial aid to the veterans of the Great Patriotic War on the 70th anniversary of the liberation of Belarus.
JULY Anatoly Lysyuk was appointed the Chairman of the Board of JSC Belagroprombank. A pilot project of an automated system was put into commercial operation to support Belagroprombank’s users of information technologies. JSC Belagroprombank obtained an updated quality management system certificate of compliance with the requirements of the international standard ISO 9001. The scope of certification of the valid in JSC Belagroprombank quality management system on provision of retail banking services was successfully expanded.
AUGUST A centralized monitoring of ATMs was introduced using the software "ProView" developed by Wincor Nixdorf International GmbH.
SEPTEMBER About 25 thousand of the fifth grade pupils from secondary schools of the Republic of Belarus got the collection of children’s fairy tales of the financial content "Your first finances" from JSC Belagroprombank.
OCTOBER
DECEMBER
The General Agreement was signed between JSC Belagroprombank and Banco Popolare di Sondrio SCpA (Italy) and the Agreement on Cooperation with CJSC Hungarian Export-Import Bank. The Agreement with VTB Bank (Austria) AG was signed to attract lending resources of the Austrian bank for the total value of EUR 18 mln.
A diagnostic audit of the activities was held in compliance with the international standards in the field of occupational safety and health (OHSAS 18001), social responsibility (SA 8000). The bank was praised by experts about the extent to which these management systems comply with the international standards.
JSC Belagroprombank completed the deal on attracting the largest in its history Syndicated Loan in the amount of USD 70 mln and EUR 29 mln.
A centralized integrated banking system SC-Bank NT was implemented, which helped to finish the next stage of optimization of a large-scale regional network. As a result, the number of the bank’s branches was reduced to 8 (Head office, Minsk City Directorate and 6 regional branches).
NOVEMBER JSC Belagroprombank was the organizer of the ninth international conference "Retail banking services: tendencies and prospects". The representatives from the National Bank of the Republic of Belarus, as well as from Belarusian, Ukrainian and Russian banks and companies discussed the following issues: how to increase the share of non-cash payments in retail trade, the development of money transfer market, increase of customer loyalty and other issues. A package of agreements was signed with JSC Moscow Exchange MICEX-RTS, which granted JSC Belagroprombank the status of the bidder in the foreign exchange market of Moscow Exchange. This event became the essential element of integration of financial markets and the implementation of joint currency policy within functioning of the Eurasian Economic Union.
The fourth International Specialized Conference "Agroecotourism – current situation and perspectives" was held. The current issues of rural tourism, main directions of further development and implementation of innovative ideas in the sphere of agroecotourism and other issues were discussed. A project of mobile acquiring was implemented, under which the first mPOS device for banking payment cards and the first online shop were installed. The first payment transaction using mPOS terminal was performed on December 30, 2014.
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Chairman of the Board of JSC Belagroprombank Anatoly Lysyuk (on the photo – the second on the right) and Heads of regional branches during celebration of the Bank’s birthday.
Events
The Republican social initiative "Your first finances" started with a solemn line in Minsk gymnasium №23 with participation of the honoured guests – Heads of the National Bank, JSC Belagroprombank and the Ministry of Education of the Republic of Belarus.
annual report | 2014
From September 3 through September 12, 2014 over 25 000 of the fifth grade pupils from rural schools and some urban schools got special presents, the main from which was the collection of children’s fairy tales of the financial content "Your
9
first finances" issued by JSC Belagroprombank. Moreover, the bank’s specialists held improvised lessons, contests and quizzes, which let the children learn about financial literacy in an interesting and accessible manner.
Events
In honour of the 70th anniversary of the liberation of Belarus from Germanfascist invaders Belagroprombank handed the Belarusian Veterans Association a certificate in the amount of 1 billion rubles as sponsorship. 900 million Belarusian rubles were sent directly to the veterans of the Great Patriotic War.
annual report | 2014
In the course of the IV International Specialized Conference "Agroecotourism – current situation and perspectives", organized by JSC Belagroprombank, topical issues of the industry, basic guidelines
11
for further development and implementation of innovative ideas in the field of rural tourism and other issues were discussed to promote and support the domestic rural tourism .
Colza Brest region was the first region in Belarus to cultivate colza. 60 thousand hectares of land are under colza here. Nowadays Belarus is the constant provider of colza oil for energy purposes to consumers from Germany, Israel, Great Britain and other countries. In 2020 foreign purchases of crude colza oil by the EU members are estimated at about 1 mln tons.
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3. Market share In 2014 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 2014 Belagroprombank retained its second place among other Belarusian banks in terms of authorized fund and equity, with a 20,2% and 15,4% market share, respectively. In 2014 JSC Belagroprombank contributed 13,6% to the growth of the total resource base of the national banking system, about 25% to the growth of time corporate deposits, 20% to the growth of corporate loans in local
currency and almost 19% to the growth of time retail deposits of the banking sector of the country. The volume of retail customer funds attracted by the bank increased 1,3-fold, enabling the bank to retain the second position in the banking system. In the course of 2014 Belagroprombank also played a noticeable role in the financing of the real sector of economy. At year-end 2014 Belagroprombank had a 17% share in gross loans to economy provided by the banking sector of Belarus. Belagroprombank ranks second by corporate loan portfolio, and is the leader by time corporate deposits in Belarusian rubles.
Market share of JSC Belagroprombank in the banking sector of the Republic of Belarus, %
20,2
Authorized fund
15,4
Equity
17,0
16,4
20,7
11,1
Resource base
Corporate deposits
2,5
Retail deposits
Corporate loans
Retail loans
Corn It was believed that Belarusian climatic conditions are not suitable for growing corn for grain. That is why this crop has been cultivated in Belarus only for silage for a long period. However, the green mass is not the most nutritious food for cattle compared with grain. To solve this problem a new technology has been developed and patented in Belarus, which has provided an opportunity to grow corn grain. This helped to solve the main problem of the livestock sector — to increase own food supply.
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4. Resource potential The bank’s active work in the key sectors of the financial market and accumulation of its own financial sources in 2014 enabled it to increase its resource potential by BYR 11,7 trillion or by 17,4%, beginning the year 2015 at over BYR 79 trillion. JSC Belagroprombank maintains its stable second position by the volume of resources available and has a 16,4% share in the total resource base of the national banking sector. 66,7% (BYR 52,5 trillion) of the bank’s resources portfolio is made up of the funds accumulated on current accounts, deposit accounts and other customer accounts, as well as funds raised through the issue of the bank’s securities. Increased authorized fund, profitable performance and capitalization of the revenue in the bank’s funds in the accounting period increased the bank’s own resources by BYR 256 billion. In 2014 the growth
Resource base structure of JSC Belagroprombank as of January 1, 2015
Dynamics of resource base, BYR bn 79 065
01.01.2015
Own resources, 14,4 %
01.01.2014
01.01.2013
01.01.2012
01.01.2011
31 354
50 949
60 965
67 345
of the bank’s resources was predominantly secured through attracting additional retail customer funds (BYR 5,8 trillion). More than 80% of the total volumes 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 Belagroprombank’s resource potential. As of January 1, 2015 the volume of borrowings raised by Belagroprombank from foreign banks totalled BYR 6,5 trillion. Growth of resource base enabled the bank to provide additional financing to the Belarusian economy in the amount of BYR 5,7 trillion.
Customer accounts and resources raised through issue of securities, 66,7 %
14,4% 8,4%
66,7%
7,5% 2,9%
Due to non-resident banks, 8,4 % Due to resident banks, 7,5 %
Other liabilities, 2,9%
Triticale "Gift from Belarus" is the domestic variety of triticale — a cereal, synthesized from rye and wheat. Since 2012 our country has been in the second position in the world ranking for sowing areas occupied with triticale. Flour is made from this crop, which is used for the production of dietary bread. It is also used for baking cakes, crackers and cookies.
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5. Retail banking Last year Belagroprombank continued its commitment to modernizing and extending the product line offered to retail customers, as well as improving the quality of retail customer service, which had a favourable impact on performance in the retail banking sector. In 2014 retail client base of JSC Belagroprombank totalled over 2 million customers. In the accounting year balances on demand accounts with JSC Belagroprombank grew 1,2-fold and totalled more than BYR 1,3 trillion. Retail deposits portfolio in local currency increased by BYR 575,5 bn, or 1,1 fold, while in foreign currency retail deposits portfolio grew by USD 442,3 mln, or 1,4-fold). Overall, in 2014 retail customer funds contributed BYR 5,8 trillion to the bank’s resource potential. Belagroprombank’s share in retail customer funds made 16,9%.
Notwithstanding the reduced demand for retail lending products offered by Belarusian banks, which was in the first place due to high interest rates in the respective market, JSC Belagroprombank improved consumer characteristics of its lending products, their accessibility for customers, including the development of remote service. One of the areas of Belagroprombank’s retail banking was the introduction and improvement of savings products. A new savings product "Big Money 2.0" entered the market that provided a fixed interest rate, and at the end of the term the deposit shall be automatically extended for a period similar to the original. In 2014 Belagroprombank started to implement the "Caring for Veterans" promotional initiative. The veterans of the Great Patriotic War who hold a deposit with our bank receive extra interest income: 3% under agreements in Belarusian rubles, 0,5% – in foreign currency.
As of January 1, 2015 the number of users of various kinds of remote banking services makes:
7 580
1 558
770 USSD Banking
TV and Mobile Banking
Mobile Internet Banking
33 702
SMS Banking
250 484
Internet Banking
areas of activity – remote banking services. The introduction of Mobile Internet Banking, Mobile Banking and USSD Banking services provided the bank’s customers with an opportunity to be more mobile and to have a choice of a more convenient method of remote banking services. As for acquiring services, in 2014 the system GTRM was implemented in the bank, which allowed
Dynamics of retail customer funds, BYR bn
01.01.2014
01.01.2012
01.01.2011
2 858
01.01.2013
12 587
7 348
24 219
18 402
01.01.2015
In 2014 Belagroprombank introduced a new service for accepting applications from individuals who want to get a loan using Internet Banking service; one more service was implemented for accepting applications from individuals to obtain a consumer loan through the bank’s Contact Center. In 2014 Belagroprombank significantly expanded one of the most essential and promising
Dynamics of retail loan portfolio of JSC Belagroprombank, BYR bn 1 622,0
01.01.2015
01.01.2014
1 346,0
01.01.2013
01.01.2012
01.01.2011
1 145,7
1 576,7
1 330,6
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to partially automate the process of registration of terminal equipment. The first mPOS device and the first online shop were installed. All this allowed to expand the line of bank’s acquiring services. Belagroprombank installed more than 3 500 payment terminals at merchants’ and 25 items of terminal equipment at agroecotourism facilities to expand the use of the system of cashless payments
for goods and services. Moreover, the functions of the terminals were expanded installed in points of cash disbursement providing an opportunity to make payments through the system SSIS using bank payment cards (a trial operation was conducted). At present the introduction of the similar decision in the network is being carried out (12 terminals have been installed).
Issued cards in circulation, thsd
01.01.2015
01.01.2014
01.01.2013
01.01.2012
1 030 01.01.2011
1 235
1 213
1 137
1 313
Number of the bank’s infrastructure units accepting bank card payments
15 787
01.01.2015
01.01.2014
11 321
01.01.2013
01.01.2012
01.01.2011
4 797
7 143
15 787
Beet Cultivation of sugar beet has high labor content. Despite the introduction of new technologies, the cost of processing of 1 hectare of sugar beet is 6-8-fold more expensive than cultivation of 1 hectare of crops. In Belarus the production of white beet sugar is almost twice as much as its domestic needs. It is possible to find the domestic sugar in traditional markets — in Russia, Moldova, Kazakhstan and Kyrgyzstan.
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6. Corporate banking In 2014 Belagroprombank continued to strengthen its position in corporate customer service. A wide range of financial services and a customtailored approach enable the bank to attract more customers. Over the past year Belagroprombank's customer base increased by 650 corporate customers and totalled over 48 thousand at the beginning of the year 2015. By closely cooperating with the largest domestic capital-intensive businesses and actively raising temporary free funds from its corporate customers, Belagroprombank managed to increase its corporate deposit portfolio by more than BYR 1,3 trillion (as of January 1, 2015 the corporate deposit portfolio totalled BYR 8,8 trillion). The bank remains committed to improving technological aspects of corporate 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 2,2 thousand people and reached 18,3 thousand corporate customers. Over the accounting year the total value of users of remote banking service system increased by 4,3% and made 38,0%. In 2014 Belagroprombank continued to support the development of agroecotourism in the Republic of Belarus. As of January 1, 2015, loan support was provided to 506 agroecotourism entities. In the accounting year the territory of agroecotourism development with the bank’s participation expanded – 97 out of 118 districts of the country were granted loans by JSC Belagroprombank. Individual approach, flexible interest and tariff policy, professionalism and helpful staff made
Corporate customer base
01.01.2015
01.01.2014
01.01.2012
01.01.2011
37 070
01.01.2013
44 103
41 549
48 227
47 577
it possible not only to meet the needs of customers and to increase loyalty by the operating companies and organizations, but also to win the
trust of new business entities. Belagroprombank thanks its corporate customers for fruitful and mutually beneficial cooperation in 2014!
01.01.2014
01.01.2013
8 773 01.01.2012
01.01.2011
2 719
7 208
8 794
7 547
01.01.2015
Dynamics of corporate deposits, BYR bn
Dynamics of corporate loans, BYR bn
01.01.2015
01.01.2014
01.01.2012
01.01.2011
24 399
01.01.2013
45 375
36 080
54 878
49 662
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Head of Grodno branch of JSC Belagroprombank Anatoly Chuyanov became the prize winner of the "Man of the Year of Grodno region" in 2014.
Pumpkin One of the participants of the contest "Giant in the garden-2013", which was held in Minsk, brought a 90 kilo pumpkin grown in Belarus. It became not only the winner of the contest, but also set a new record among the products presented by gardeners.
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7. International cooperation Belagroprombank’s reputation of a bonafide business partner, its transparent financial reporting, high level of trust in the financial markets and a wide range of banking products enable it to maintain constructive relations with foreign financial institutions in many countries of the world and use different financial tools to implement foreign trade projects of the bank’s customers on favourable and competitive terms and conditions. JSC Belagroprombank is one of the most active financial institutions of the Republic of Belarus in raising foreign borrowings into the country’s economy. Foreign credit facilities raised by JSC Belagroprombank totalled USD 5,5 bn (in 2014 – USD 0,5 bn). Special attention is paid to the use of financial tools and to attracting
new trustworthy customers among financial institutions from all over the world. The year 2014 became famous for raising of a Syndicated Loan in the amount of USD 70 mln and EUR 29 mln for one year period. This deal was the result of prolongation of the Syndicated Loan attracted by JSC Belagroprombank in 2013 in the amount of USD 63,5 mln. While prolongation new creditors joined the deal, and the total value of the raised funds increased to USD 107 mln in the equivalent, making this deal not only the largest bank’s Syndicated Loan, but one of the largest deals in the Belarusian market. Moreover, this deal became the only deal in the banking sector of the Republic of Belarus performed in 2014 based on English law with participation of the leading banks from Germany and Italy for one year period.
Honey The assortment of Belarusian natural honey can surprise any gourmet. Flower, meadow, field, sweet clover, buckwheat, lime, heather honey, May honey, forest honey, fireweed and acacia honey is produced in our country. Moreover, the population of our country can get all bee products, such as ambrosia, pollen, propolis, zabrus, beeswax and podmor.
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8. Credit ratings of JSC Belagroprombank The bank’s financial position is rated by the international rating agency Standard & Poor's, which for over 150 years, is the leader in providing market participants with credit
ratings and analytical analysis, ensuring a sound understanding of the global finance infrastructure. Ratings of Belagroprombank as of January 1, 2015:
Long-term foreign currency rating
B-
Short-term foreign currency rating
C
Long-term local currency rating
B-
Short-term local currency rating
C
Outlook
Stable
Sunflower There are two main regions in Belarus for growing sunflower: Brest region (cultivated area is 3 000 hectares) and Gomel region (cultivated area is about 1 000 hectares). Special retrofit kits of grain or corn reapers or, even better, special reapers are required to cultivate sunflower with minimal losses.
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9. Correspondent banks Austria UniCredit Bank Austria AG, Vienna Raiffeisen Bank International AG, Vienna VTB Bank (Austria) AG, Vienna Erste Group Bank AG, Vienna Raiffeisenlandesbank Oberösterreich AG, Linz Sberbank Europe AG, Vienna Belgium KBC Bank NV, Brussels Bulgaria Bulgarian Development Bank AD, Sofia Great Britain VTB Capital plc, London Hungary Hungarian Export-Import Bank Plc., Budapest K&H Bank Zrt., Budapest OTP Bank Plc., Budapest Citibank Europe plc Hungarian Branch Office, Budapest Germany AKA Ausfuhrkredit-Gesellschaft mbH, Frankfurt am Main Deutsche Bank AG, Frankfurt am Main DZ Bank AG, Frankfurt am Main BHF-BANK Aktiengesellschaft, Frankfurt am Main Commerzbank AG, Frankfurt am Main
UniСredit Bank AG, Munich WGZ Bank AG, Dusseldorf Landesbank Berlin AG, Berlin Landesbank Baden-Wuerttemberg, Stuttgart Landesbank Hessen-Thueringen Girozentrale, Frankfurt am Main Kreissparkasse Esslingen-Nuertingen, Esslingen VTB Bank (Deutschland) AG, Frankfurt am Main Bayerische Landesbank, Munich Intesa Sanpaolo SpA German Branch, Frankfurt am Main Georgia JSC "Capital Bank", Tbilisi Denmark Danske Bank A/S, Copenhagen Israel Bank Leumi le-Israel B.M., Tel Aviv Italy Unione di Banche Italiane SсpA, Bergamo Banca Monte dei Paschi di Siena SpA, Siena Intesa Sanpaolo SpA, Turin Banca Popolare di Vicenza SсpA, Vicenza UniCredit SpA, Milan Banco Popolare Soc. Coop., Verona Banca Popolare dell’Emilia Romagna s.c., Modena Banca Popolare di Sondrio ScpA, Sondrio Veneto Banca ScpA, Montebelluna
Kazakhstan JSC Kazkommertsbank, Almaty Eurasian Development Bank, Almaty Latvia JSC "Baltic International Bank", Riga JSC "Rietumu Banka" Riga JSC "Swedbank", Riga JSC "Baltikums Bank", Riga JSC "Trasta Komercbanka", Riga Lithuania AB DNB Bankas, Vilnius AB SEB Bankas, Vilnius "Swedbank", AB, Vilnius Netherlands ABN AMRO Bank N.V., Amsterdam Rabobank Nederland, Utrecht Credit Europe Bank N.V., Amsterdam Norway DNB Bank ASA, Oslo Poland mBank S.A., Warsaw Bank Pekao S.A., Warsaw Bank BGŻ S.A., Warsaw Bank Gospodarstwa Krajowego, Warsaw Bank Zachodni WBK S.A., Wrocław Raiffeisen Bank Polska S.A., Warsaw PKO Bank Polski S.A., Warsaw Republic of Belarus CJSC "ABSOLUTBANK", Minsk
CJSC "RDB-Bank", Minsk CJSC "MTBank", Minsk CJSC "Trustbank", Minsk CJSC VTB Bank (Belarus), Minsk CJSC "Alfa-Bank", Minsk CJSC "Delta Bank", Minsk CJSC "BTA Bank", Minsk CJSC "BSB Bank", Minsk CJSC "Idea Bank", Minsk CJSC "Bank BBSB", Minsk CJSC "Zepter Bank", Minsk CJSC "Eurobank", Minsk JSC "BPS-Sberbank", Minsk JSC "JSSB Belarusbank", Minsk JSC "Development Bank of the Republic of Belarus", Minsk "Belinvestbank" JSC, Minsk "Priorbank" JSC, Minsk Bank BelVEB OJSC, Minsk OJSC "Paritetbank", Minsk OJSC BNB-Bank, Minsk JSC Belgazprombank, Minsk OJSC "Technobank", Minsk "Fransabank" OJSC, Minsk "Bank Moscow-Minsk" JSC, Minsk JSC "Eurotorginvestbank", Minsk OJSC "HCBank", Minsk CJSC "BIT-Bank", Minsk Russian Federation JSC "Russian Agricultural Bank", Moscow JSCB "NOVIKOMBANK", Moscow OJSC "Promsvyazbank", Moscow JSC "ALFA-BANK", Moscow JSCB "Investtradebank", Moscow
annual report | 2014 JSC "FRB", Moscow JSC "Sberbank of Russia", Moscow JSC VTB Bank, St.Petersburg JSC "MDM Bank", Moscow JSC Bank of Khanty-Mansiysk, Moscow JSC "Bank of Moscow", Moscow JSC "SMP Bank", Moscow CJSC "ProBank", Moscow "Asian-Pacific Bank" JSC, Blagoveshchensk OJSC "Bank "St.Petersburg", St.Petersburg "Bank BCC-Moscow" Ltd., Moscow Slovakia Eximbankа SR, Bratislava Všeobecná úverová banka, a.s., Bratislava Ceskoslovenska obchodna banka, a.s., Bratislava Sberbank Slovensko, a.s., Bratislava USA Deutsche Bank Trust Company Americas, New York Citigroup Inc., New York Tajikistan JSC "Agroinvestbank", Dushanbe Turkey Yapi ve Kredi Bankasi AS, Istanbul T.C. Ziraat Bankasi AS, Ankara Ukraine JSC CB "PRIVATBANK", Dnepropetrovsk JSC "Oschadnybank", Kiev JSC "The State Export-Import Bank of Ukraine", Kiev
31 Finland Nordea Bank Finland Plc, Helsinki Pohjola Bank Plc, Helsinki Danske Bank A/S Helsinki Branch, Helsinki France VTB Bank (France) SA, Paris Societe Generale, Paris BNP Paribas SA, Paris Intesa Sanpaolo SpA Paris Branch, Paris Czech Republic Ceskoslovenska obchodni banka, a.s., Prague UniCredit Bank Czech Republic and Slovakia, a.s., Prague Česká spořitelna, a.s., Prague Evropsko-ruská banka, a.s., Prague Komerčni banka, a.s., Prague Sberbank CZ, a.s., Prague VUB a.s., Prague branch, Prague Switzerland Banque de Commerce et de Placements SA, Zurich Zuercher Kantonalbank, Zurich Sweden SEB AB (publ), Stockholm Swedbank AB (publ), Stockholm Estonia Swedbank AS, Tallinn AS SEB Pank, Tallinn Japan Sumitomo Mitsui Banking Corporation, Tokyo
Potatoes Potatoes seem to have entered Belarus from Baltic States and Poland. The largest potato fields were located in Polotsk governorship and the estate Telyatniki in Mogilev province. Nowadays our country is included in the eight largest potato producers in the world and holds the first position in its production per capita — over 1 000 kilo.
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10. Financial statements, in accordance with the national standards. Auditors’ report To the shareholders and the Supervisory Board of JSC Belagroprombank 3 Zhukov Ave., Minsk, Republic of Belarus, 220036 JSC Belagroprombank is registered in the Unified State Register of Legal Entities and individual entrepreneurs №20 Reference 1203-04
Auditors’ report on the annual financial statements of JSC Belagroprombank for the year 2014 We have audited the attached annual accounting (financial) statements of the Joint-Stock Company Belagroprombank (hereinafter referred to as "the Bank"), comprising the balance sheet
as of January 1, 2015, the profit and loss statement, statements of changes in funds and cash flow statements for the year 2014, as well as explanatory notes.
Management’s Responsibility for the Annual Accounting (Financial) Statements The Bank’s management is responsible for the preparation and fair presentation of the annual accounting (financial) statements in accordance with the legislation of the Republic of Belarus. The Bank’s management is responsible for
designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of the annual accounting (financial) statements that are free from material misstatements, whether due to fraud or error.
Auditors’ Responsibility Our responsibility is to express an opinion on these annual accounting (financial) statements based on our audit. We conducted our audit in accordance with the requirements of the legislation of the Republic of Belarus as of July 12, 2013 №56-3 "On Audit Activities", republican rules of auditing activity and International Standards on Auditing provided that they are not in conflict with these requirements. Those standards and requirements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether these annual accounting (financial) statements are free from any material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual accounting (financial) statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement
of the annual accounting (financial) statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control relevant to the preparation and fair presentation of the annual accounting (financial) statements of the Bank in order to design audit procedures that are appropriate in the circumstances, but not for 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 made by the Bank’s management, as well as evaluating the overall presentation of the annual accounting (financial) statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide our audit opinion.
Audit opinion In our opinion, the annual financial statements present fairly, in all material respects the financial position of the Joint-Stock Company Belagroprombank as of January 1, 2015, and its financial and economic performance and cash
flows for the year 2014 in accordance with the requirements of the legislation of the Republic of Belarus regarding preparation of the annual financial statements.
Opinion regarding other legislative requirements Our responsibility is also to assess the calculation methods and authenticity 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
annual report | 2014 and operations", 2809 "Liquidity calculation", prepared by the Bank and presented as of January 1, 2015. 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, 2015
35 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, approved by the resolution of the Board of the National Bank of the Republic of Belarus as of October 31, 2006 № 172 (as amended).
Other issues Audit of the bank’s annual financial statements for 2013 were carried out by different auditors,
whose report dated March 12, 2014 contained unmodified opinion on those statements. Vereshchagina Irina Vladimirovna Director Borisenko Tatiana Michailovna Head of Audit Group March 12, 2015 Minsk, Republic of Belarus Limited Liability Company KPMG Certificate of state registration issued by Minsk City Executive Committee pursuant to the decision dated 10.02.2011, UNP 191434140
Flax Belarus holds the fourth position in the world in flax production after China, France and Russia. By the end of the 90s of the XIX cent. the main regions for production of cloth industry became Vitebsk and Mogilev regions, which supplied linen cloth not only to the Russian market, but also to Germany, Austria-Hungary and England. Belarusian flax has become the global brand. On the contemporary territory of the country Vitebsk, Grodno and Minsk regions are the main raw areas for cultivation of flax.
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11. Balance sheet № 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Description ASSETS Cash assets Precious metals and precious stones Due from the National Bank Due from banks Securities Loans to customers Derivative financial assets Long-term financial investments Fixed assets and intangible assets Assets intended for sale Deferred tax assets Other assets TOTAL assets LIABILITIES Due to the National Bank Due to banks Due to customers Securities issued by the bank Derivative financial liabilities Deferred tax liabilities Other liabilities TOTAL liabilities CAPITAL Authorized fund Share premium Reserve fund Balance sheet items re-evaluation fund Retained profit TOTAL capital TOTAL liabilities and capital
Index
Explanatory notes
1101 1102 1103 1104 1105 1106 1107 1108 1109 1110 1111 1112 11
5,33,79 6,34,79 7,35,79 8,36,79 9,37,77,79 10,38,77,79 11,39,79 12,40,79 13,41,77,79 14,42,79 15,43 16,44,79 4
1 279 552 5 996 5 499 798 541 932 10 613 130 55 011 663 1 748 826 217 2 380 341 570 1 373 092 77 534 039
935 325 7 799 4 384 117 1 235 850 5 818 581 48 964 926 27 730 735 2 126 529 490 244 64 694 133
1201 1202 1203 1204 1205 1206 1207 120
19,45,79 19,46,79 19,47,77,79 20,48,77,79 21,49,79 22,50,69,79 23,51,79 18
4 528 310 8 505 448 47 582 442 5 153 133 15 204 11 437 620 66 222 168
3 529 334 9 199 913 35 214 939 5 574 240 175 542 430 54 061 031
1211 1212 1213 1214 1215 121 12
24,29,52
6 803 635 934 879 1 199 730 2 373 627 11 311 871 77 534 039
6 803 635 506 659 1 352 282 1 970 526 10 633 102 64 694 133
53 25,54 26,55 24
2014
2013
(as of January 1, 2015, BYR, million)
Buckwheat In 2014 700 thousand tons of buckwheat were threshed in Belarus, so the population of the country has enough of this product at its disposal, as its annual demand is 550 thousand tons. The main export markets for buckwheat are Lithuania and Russia. However, about 9 tons of imported cereal could be found in Belarusian stores.
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12. Profit and loss statement 2014 № 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Description
Interest income Interest expenses Net interest income Commission income Commission expenses Net commission income Net income from transactions with precious metals and precious stones Net income from transactions with securities Net income from foreign currency transactions Net income from transactions with derivative financial instruments Net transfers to reserves Other income Operational expenses Other expenses Profit (loss) before tax Income tax PROFIT (LOSS) Earnings per share in BYR Basic earnings per ordinary share Diluted earnings per ordinary share
Index
Explanatory notes
2014
2013
2011 2012 201 2021 2022 202
58,77,80 58,77,80 58 59,77,80 59 59
9 460 605 7 051 637 2 408 968 1 133 607 278 850 854 757
9 536 363 6 998 534 2 537 829 1 052 066 251 954 800 112
203
60
658
722
204
61,80
1 261
63 100
205
62,77
336 409
302 595
206 207 208 209 210 211 212 2
63,80 64 65,77 57,66,77 57,67,77 68 69 26
(7 702) 560 036 1 039 344 2 357 476 272 034 1 444 149 275 320 1 168 829
(36 669) 651 046 503 307 1 884 654 205 115 1 430 181 389 586 1 040 595
22 23
70 71
344 —
314 — (BYR, million)
Apple-tree Belarusian scientists learned to make chips from apples. This natural dessert also contains sugar, lemon acid and vanillin. Apple chips are not fried in oil, like potato chips. They are dried. It is interesting to know that only apples of the first or premium quality varieties, collected from the tree by hand, without broken sides or stains are suitable for making chips.
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13.Outlook for 2015 In 2015 Belagroprombank will take measures aimed at retaining and strengthening its position across key financial market segments of the Republic of Belarus due to the positive dynamics of growth and quality of key performance indicators. The Bank will proceed to meet the needs of its customers in today's high-quality banking services. Remote service systems will be further developed providing high efficiency and quality of services. Tariff policy and organization of cooperation with corporate customers will be focused on complex needs of business entities in all types of banking services. In 2015 retail customer service will involve further modernization and expansion of the range of deposit, loan and card products, reducing the overall time limit for provision of banking services, expansion of infrastructure and update of technologies used for the implementation of independent financial transactions by the bank’s customers. Belagroprombank’s shortterm planning includes further development of consumer lending. To further broaden the loan
products range for its retail customers, the bank plans to study the possibility of implementing pilot projects related to the adoption of specialized loan services in partnership with retail trade network. Special attention will be paid to the program to increase customer loyalty to the bank. Moreover, the bank planned to launch a new program to support individuals engaged in private farming. Belagroprombank’s 2015 objectives also include further development of cooperation with foreign financial institutions focusing on raising foreign borrowings into the domestic economy to meet customers’ demands in financing of foreign trade projects. We set a target for 2015 to implement a set of activities related to further 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 management systems. Belagroprombank’s products will still remain one of the most affordable, profitable and beneficial.
Events
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Together with the Youth! Participants of the third Republican conference of Belarusian Republican Youth Union sector committee of JSC Belagroprombank came to Minsk from all over Belarus.
Events
Bank’s amateur team "Artel" is not only a great opportunity to improve health, but also pleasant emotions from victories on ice rinks of the Republic of Belarus.
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Legal Department of JSC Belagroprombank won the professional contest "Best departments of Belarus" in 2014 and got a big prize in the category "Financial Services".
Events
Support of gifted children is one of the priorities of the corporate social responsibility of JSC Belagroprombank. The bank has been supporting the participants of the popular TV show "I am singing" for several years already.
annual report | 2014
The Bank together with the Belarusian Football Federation held the initiative "Give a child a soccer ball as a present". Over 19 000 of the first grade pupils from all the rural schools of the country received soccer balls with Belagroprombank’s logo.
47
Reliable performance and excellent professionalism of the collection service of JSC Belagroprombank was highly appreciated by employees and customers of the bank, as well as by the professional community.
Растение
JSC BELAGROPROMBANK 3 Zhukov Ave., 220036, Minsk, Republic of Belarus phone: (+375 17) 218 57 77, (+375 17) 218 57 15 fax: (+375 17) 218 57 14 www.belapb.by e-mail: info@belapb.by