National Reserve Bank - is one of the most reliable and stable banks of Russian Federation. According to “The Banker” magazine NRB is 638th by capital among Top 1000 World Banks and is 10th among Russian credit institutions.
NRBank was established in 1994. Among its clients - the largest Russian companies, leaders of the national economy.
Constantly developing traditional areas of banking business, including retail banking, NRBank can confidently present itself as a strategic investor able to implement large-scale investment projects in such spheres, as: aircraft construction, air leasing and air transportations, shipbuilding, fuel and energy industry, low-cost buildings construction on the mortgage lending basis.
The Bank has wide experience of work in the international financial markets, including the Debt Capital markets.
NRBank step-by-step creates broad network of regional branches. Its Branch in St.Petersburg is operating since 2001 and covers all the North-West of Russia. In 2006 NRBank opened its regional branch in Voronezh to extend its presence in Central and Southern regions of Russia. In years to come we are planning to open new regional branches in Volga region and Siberia.
Developing mortgage lending, NRBank established National Mortgage Company in 2003, and at year-end 2006 mortgage loans portfolio has reached to USD 120 million. In September 2006 NRBank jointly with National Mortgage Company has opened the specialized mortgage credit center in Moscow. NRB is planning to open the similar centers in many Russian regions.
The full range of financial services, provided by NRBank, includes:
- Settlement and cash services
- Consulting services
- Tailor-made debt settlement solutions
- Credit lines
- Syndicated loans
- LC’s and bank guarantees
- Trade Finance
- Foreign exchange transactions
- Securities transactions
STATEMENT BY THE PRESIDENT
YU. A. KUDIMOV
The year 2005 proved quite controversial for Russia’s economy. On the one hand, high prices for traditional export goods, first of all, oil enabled the Russian Government to considerably consolidate its financial position. Gold and exchange reserves reached a record mark of USD 182,2 billion which represents a circa 50% rise versus 2004 (USD 120,7 billion). Accumulation of huge financial resources in the stabilization fund – RUB 1,237 billion as of January 1, 2006 allowed to reduce the burden of external debts. Besides, Russia was assigned with credit rating of investment level whereas the domestic financial market not only experienced penetration of short- and medium-term investors but, what is more, it witnessed the coming of ‘long money’.
However, the reverse side of oil dollar abundance became further strengthening of the
Russian Ruble which negatively influenced competitiveness of the Russia’s economy and triggered increased import inflow. Thus the industry production index came in 2005 to 104% versus 108,3% in 2004. Lower rates of industrial growth slowed the country’s GDP growth which amounted in 2005 to only 6,4% versus 7,2% in 2004 whereas high oil prices accounted for a third of that growth.
In spite of controversial economic factors, 2005 marked another year of NRBank’s overall
successful performance. Thanks to a well-thought-out development strategy, reasonably conservative investment policy supplemented by flexible management structure, highly qualified staff and seamless banking service, the Bank could post a record profit of RUB 5,622 billion, increase the volume of loan portfolio by 1,3 times and achieve conspicuous growth in the volume of transactions.
While implementing its investment policy NRBank sought, as in previous years to facilitate
introduction of foremost technologies, revival and reorganization of large enterprises, creation of new production facilities as well as development of high tech sectors. Special attention traditionally was given to socially significant industries of Russia’s economy. In 2005 we won as new customers reputed companies such as ZAO Zvezda (St. Petersburg), Volga-Aviaexpress, OAO Krasair, OAO Vladivostok Avia, ZAO Energiya Concern, OAO Techsnabexport, OAO S.P.
Korolev Energy Corporation, OSAO RECO-Guarantee, etc.
NRBank took part in the implementation of nationwide projects. In cooperation with the
Agency on Atomic Energy and FGUP Rosoboronexport we launched a number of projects in the nuclear and military sectors of Russia’s economy whereas NRBank’s accreditation with the Federal Agency on Industry did much to help the Bank establish relations with large stateowned enterprises and companies.
Striving to effectively respond to current trends in the financial markets and changes within the Russian banking community we concentrated our energies on elaboration of a long-term development program providing for transfer of all non-financial assets to the National Reserve Corporation. The strategic goal of this program is to get transformed into a universal banking institution.
To implement this program NRBank initiated ambitious expansion of its retail business. We introduced a number of new deposit types which allowed the head office of NRBank to attract deposits in the total amount exceeding USD 23 million.
In 2005 NRBank became an associate member of Visa International and began issuing debit and credit cards bearing NRBank’s logo. Besides, we established jointly with the Savings Bank of the Russian Federation Russia’s largest credit bureau - ZAO Bureau of Credit Histories Infocredit. Same year NRBank’s management took a strategic decision to take part in the creation of a national payment system SBERCARD based on microchip technologies. To that end ZAO Sbercarta was established jointly with the Savings Bank of Russia, Interregional Investment Bank, RG Leasing and BGS Smartcard Systems A.G. (Austria).
The Bank achieved powerful expansion in the volume of mortgage lending business and
joined the top 10 market makers. By year-end 2005 the volume of monthly lending came close to USD 5 million whereas the aggregate volume of issued loans exceeded USD 51 million. All this allowed more than one thousand families to improve their living conditions.
Throughout 2005 we actively supported the National Reserve Corporation in the implementation of a number of construction projects, the prime focus being on the large scale program called ‘Low-Rise Buildings in Russia’. The goal of the program is to create in Russia a new sector of economy producing and selling standard wooden country houses, provide affordable accommodation and facilitate solution of environmental problems in large Russian cities.
During the year under review the Bank continued realization of the long-term project of
development of Russia’s aircraft building industry. We also continued cooperation with OAO Aeroflot. Officers of the National Reserve Corporation and NRBank appointed to the board of directors took an active part in reorganization of the company’s management and its participation in a number of investment projects. Financial resources provided by NRBank allowed Ilyushin Finance Co. to complete a large export deal – delivery of two IL-96-300 planes to Cuba.
While implementing new programs we did not forget our traditional areas of business. There was conspicuous growth in the volume of transactions in the stock and certified debt markets.
Besides, we managed to attract new customers and offer them highest quality and seamless banking services. NRBank was also proactive in arranging placements and syndications. Thus in 2005 we participated in the IPO of Evraz Group, OAO Lebedyansky, OAO AFK Systema, OAO MTS, as well as in a syndicated loan extended to OAO Gazprom by a number of foreign banks.
During the accounting period NRBank continued its strategic expansion in the Russian
regions. Activities of NRBank’s strategic partner Voronezh Bank (situated in Voronezh region) and the Bank’s Branch in St. Petersburg whose business doubled in 2005 were a great help in the implementation of our ambitious regional policy.
During the year under review NRBank dynamically developed its cooperation with the strategic partners in the Ukraine – ZAO NRBBank, OAO CB Energobank, European Insurance Alliance, resort group in the Crimea as well as other organizations comprising the National Reserve Corporation and facilitating its business activities in the Ukraine.
Throughout 2005 NRBank continued to attract new counterparts and solidify its position in all segments of the interbank market. The Bank’s immaculate reputation enabled us to enhance the existing cooperation and establish new relations with the banks of Russia, CIS and other foreign countries.
During the accounting period we pressed ahead with the opening of a joint representative
office of the National Reserve Corporation and NRBank in Azerbaijan. Since the very onset of its operation at the beginning of 2006 NRBank initiated a number of large scale investment projects including construction of apartment blocks and a business center in Baku, revival of iodine production and start up of a plant producing prefabricated houses and construction elements.
During the year under review over 20 general agreements (including six agreements with foreign banks operating in Russia) on interbank lending and securities trading were signed. As a result, the total number of banks having signed general agreements with NRBank exceeded 110. The volume of credit lines on documentary business transactions topped USD 60 million.
We also succeeded in attracting new counterparts in the financial market by signing framework agreements on credit and reverse repo deals. In 2005 the total number of counterparts having signed such agreements with NRB increased by 20%. This increase was accompanied by appropriate growth in the volume of credit risk limits extended to NRBank by its counterparts.
Besides, NRBank became a clearing member of the futures section of MICEX and achieved conspicuous growth in the volume of shares and foreign exchange options. In the RUB denominated bond market we managed to create a medium-term portfolio represented by second-tier issuers having a good chance to advance to the first echelon.
In 2005 NRBank joined a project of the National Stock Association for fixing market prices on sovereign Eurobonds, RUB denominated subfederal and corporate securities.
As in previous years, NRBank’s partners and shareholders gave us efficient support in all our undertakings facilitating achievement of our strategic goal to get transformed into a universal credit institution. Their trust and assistance in the highly competitive banking environment will allow the Bank to make this cooperation more efficient and as a result consolidate its position in the Russian banking community.
I would also like to express my genuine gratitude to every member of staff for his or her own contribution to the successful solution of problems we were facing in 2005.
Yu.A. Kudimov
President of the National Reserve Bank
