More than years on the market · Maastricht criterion ... entrepreneurship and business development in small towns Global Entrepreneurship Week Since 2015 DBRB acts as official Arranger

© 2017 International Business February 2017

More than years on the market!

BELARUS

• Political update

• Macroeconomic context

• Ranks & figures

Development Bank

• In brief

• Organizational structure

• CG structure

• Key figures vs other local banks

• Capital injections & funding base

• KPI 2017

• Core business

• International market presence

• Projects map

• Social responsibility

• Annexes


BELARUS: OPEN INTERNATIONAL POLICY

Alexander Lukashenko meets with Sergio Mattarella, President of Italy

20 May, 2016

Alexander Lukashenko meets with Xi Jinping, President of the People's Republic of China

29 September, 2016

Alexander Lukashenko meets with sheikh Mohammed bin Zayed bin Sultan Al-Nahyan, Crown Prince of Abu Dhabi.

31 October, 2016

Alexander Lukashenko meets with Prince Michael of Kent, the member of the British royal family.

11 October, 2016

Andrea Wiktorin, EU’s ambassador in Minsk

Young Chul Kim, World Bank Country Manager for Belarus

«Three years ago, our active project portfolio was worth about $375 million. Soon it reaches $1.2 billion … the amount of financing is increasing but also, and more importantly, we have been able to build a strong mutual trust with Belarusians…»

06 September, 2016

«There has been a change in vocabulary. Relations are getting better … We are witnessing an increased desire to interact with Belarus.»

08 November, 2016

© 2017 International Business

3

February 2017

BELARUS: NO SANCTIONS!

1998/2002/2004/2006 → Sanctions in force

Oct 29, 2015 → Sanctions «on pause»

Feb 15, 2016 → No sanctions!

After more than 15 years of sanctions pressure оn Feb 15, 2016 EU Council agreed to drop most of it’s

sanctions against Belarus

Lifted sanctions against Belarus on

May 7, 2016

Lifted sanctions against Belarus on

Feb 17, 2016 4


BELARUS: MACROECONOMICS

5


21.7

16.6 16.4

12.0

10.6* < 9

0

5

10

15

20

25

2012 2013 2014 2015 2016 2017F

*The lowest inflation rate within last 5 years

Inflation, % YoY State budget

21.5

26.7 31.2 36.6

38.8

21.1 26.6 30.4 35.3

37.4

0.7 0.2

1.1 1.5 1.5

-2-1.5-1-0.500.511.52

-45

-30

-15

0

15

30

45

2012 2013 2014 2015 2016

Revenues, bln. BYN Expences, bln. BYN Surplus/Deficit, % of GDP

Key tendency - tight fiscal policy

1.7 1.0

1.6

-3.9

-2.6

1.7

-6

-4

-2

0

2

2012 2013 2014 2015 2016 2017F

GDP, % YoY

Positive GDP growth forecast in 2017 after sharp fall in 2015 mostly connected with the crisis in Russia

40.8

40.0 38.0

38.3

38.2

38.2

35

38

40

43

45

June 2014 Dec. 2014 June 2015 Dec. 2015 June 2016 Dec. 2016F

Gross External Debt, bln. USD

Total debt decrease within last two years

February 2017

18.8% 24.9% 23.7% 22.8% 22.3%

32.5% 39.4%

0%

10%

20%

30%

40%

50%

60%

70%

2010 2011 2012 2013 2014 2015 2016


BELARUS: RANKS & FIGURES

Official website of the Republic of Belarus

Trade balance, % of GDP ▼

RANKS

Legislative ceiling – 45%

Maastricht criterion – 60%

USD 17 497 GDP per capita 2016, #68 in World by IMF

№3 producer

№3 producer

№4 exporter

In European TOP-5 by number of graduates

In World’s TOP-10 by moving towards business-friendly regulations (World Bank Doing Business)

In World’s TOP-40 by creativity being the leader among the CIS

(Global Creativity Index-2015)

*potash

Gross pub. debts, % of GDP ▲

-11.4% -13.6%

-2.1%

4.5%

-3.2%

-0.6%

0.3%

-0.1%

-16%

-12%

-8%

-4%

0%

4%

8%

2009 2010 2011 2012 2013 2014 2015 2016

10 % market share

6

February 2017


New opportunities

February 2017

DEVELOPMENT BANK: IN BRIEF

• Founded in 2011 upon recommendations of IMF and World Bank • 100% state-owned • Classic development institution • The only financial institution for direct state programs lending in Belarus • Agent for external Government borrowings • The only Belarusian bank that has:

-authority to initiate changing of national financial & banking legislation -Government guarantee for all bond issues

• Team of 392 highly experienced professionals (as of 01.01.2017)

• B- by S&P / Fitch with «stable» outlook

• IFRS FS since 2012 (on 6-12 m. basis) audited by KPMG

8


DBRB Headquarters, Minsk

DBRB Headquarter

Minsk, Belarus

February 2017

ORGANIZATIONAL STRUCTURE

73% owned by DBRB, #1 international leasing operator in Belarus, provides around 90% of total Belarus export finance support

SUB

SID

IAR

IES

100% owned by DBRB, Consulting services, Managing company "Holding the woodworking industry organizations"

We are the only financial institution from Belarus with Rep.

Office in London (UK)

10 9

Regional presence

Brest Gomel

Mogilev

Vitebsk

Grodno DBRB HQ, Minsk

HQ in Minsk and 6 Regional Branches incl. Minsk Branch

Up to 50% of market share



CG STRUCTURE (SUPERVISORY BOARD)

Andrei Kobyakov Prime Minister

of the Republic of Belarus

Chairman of the Supervisory Board

Sergei Kalechits Deputy Chairman of the

Board of the National Bank of the Republic of

Belarus

Vladimir Zinovskiy Minister of

Economy of the Republic of Belarus

Vladimir Amarin Minister of Finance of the Republic of

Belarus

Vasily Matyushevsky First Deputy Prime

Minister of the Republic of Belarus

Mikhail Kovalev Dean of Economics

Faculty of the Belarusian State

University

Siarhei Navitski Director General of Henkel Bautechnik

JLLC

Aleksandr Shvets Chairman of

«Belarussian scientific industrial association»

Daniel Krutzinna Managing Partner

of independent management consultancy

Civitta

Independent directors (science, public activity, Top business, int. business)

10

Shareholders representatives (Government and National bank )

Our Supervisory Board is the unique «fusion» of Top Officials

from financial & economic spheres, representatives from science and public and foreign

experts.

Risk Committee Audit Committee

Budget & Remuneration

Committee

Strategic Development

Committee

February 2017

3.20%

2.10%

1.67%

0.56%

0.14%

0% 2% 4%

Development Bank

Belagroprombank

Bank BelVEB

Belarusbank

BPS-Sberbank

18.26%

14.38%

12.84%

4.54%

1.68%

0% 10% 20%

Belagroprombank

Development Bank

Bank BelVEB

Belarusbank

BPS-Sberbank

DEVELOPMENT BANK KEY FIGURES VS OTHER LOCAL BANKS*

14.6

4.9

3.1

2.6

2.1

0 10 20

Belarusbank

Belagroprombank

Development Bank

BPS-Sberbank

Bank BelVEB

Equity

USD bn eq USD bn eq USD m eq

11 * Source: NBRB bulletin, own calculation on January 01, 2017

Assets Profit

ROA ROE


1.8

0.8

0.6

0.3

0.2

0.0 1.0 2.0

Belarusbank

Development Bank

Belagroprombank

Priorbank

Bank BelVEB

106.2

92.8

78.9

58.1

55.6

0 25 50 75 100 125

Belagroprombank

Development Bank

Belarusbank

Priorbank

Belgazprombank

CAPITAL INJECTIONS & FUNDING BASE

USD 804 mln – DBRB capital as of January 01, 2017 (#2 among all Belarusian financial institutions)

Local Bonds (BYR and FX nominated)

Own funds, including capital injections

Social prgm. “Big Family” (up to USD 150 mln per year)

External Funding (Syndications / BB Loans)

Capital Injections Dynamic

Funding Base Composition

26,75% CAR (Tier 1) , Basel 2

2011 2012 2013 2014 2015 2016

USD 4 mln

USD 351 mln

USD 597 mln

USD 104 mln

USD 134 mln

USD 54 mln

12


CORE BUSINESS

State programs / Infrastructure* financing

Export finance solutions

SME comprehensive support

The main platform of DBRB activities – is to provide unique financial solutions on non - competitive with commercial banks basis

13


Infrastructure projects

USD 350 mln USD 150 mln USD 45 mln

KPI 2017

February 2017

CORE BUSINESS

0.3

0.9 1.3

1.0 0.6 0.5

0.3

0.7 1.0

1.1 1.4

0

1

2

3

01.01.2012 01.01.2013 01.01.2014 01.01.2015 01.01.2016 01.01.2017

Transferred Loans

Development Bank's Loans

DBRB is the leading financial institution for state programs financing with around 50% stake of total volume. From 2016 DBRB acts as a single coordinator for all state programs to be financed in Belarus

Loan portfolio dynamic (USD bn) / Sectors Breakdown / FX Structure

* ruble portfolio decreased significantly by reason of devaluation

0.5%

7.6% 7.6% 6.5%

5.8%

7.0%

0%

3%

5%

8%

10%

2011 H12012

2012 H12013

2013 H12014

2014 H12015

2015 H12016

2016

NPLs totaled 7.0% of DBRB loan portfolio as of 01.01.2017 (transferred loans NPLs – 23.7%/ own loans NPLs – 0.4%).

Average level of NPLs in Belarusian banking industry – 12.8% (as of 01.01.2017).

14 *NAS

State programs financing


During 2011-2014 DBRB has entered in the books USD 1.5 bn of assets from 2 biggest state commercial banks

February 2017

22.5

24.2

1.5 2.4

25.6

23.9

1.6

Agriculture Industry

Construction & Real Estate Trade

Transport & Communications Other

Export finance

74.3

10.7

13.6

1.4

BYR USD EUR RUB

> USD 500 m of export loans was provided by DBRB since 2013

15


CORE BUSINESS Export finance solutions

BELARUS

February 2017

1.0% 2.0%

6.0%

33.0%

22.0%

36.0%

Agriculture

Forestry

Construction

Transport

Services

Industry

Funds & Liquidity

Economic sectors breakdown

DBRB provides funding for 12 local partner banks and 1 leasing company to support projects and business

ideas of their SME clients

CORE BUSINESS

16

Joint program with the World Bank expected

in 2017

Loans & Lease for SME (since Aug, 2014)

712 Projects

With a total volume > USD 135 mln

USD 250 mln Credit plan for 2016-2020

SME comprehensive support (I)



CORE BUSINESS

17

DBRB creates unique atmosphere in Belarus for

growing new business ideas and talents in

SME area «Start up»

From 2015 DBRB considers «Start up» companies as

important part of SME support system

«My Business» TV-Show Above 700 participants from different regions of Belarus

presented own business ideas. Hosted and sponsored by DBRB

The joint programme with UNDP

Support for women's entrepreneurship and business

development in small towns

Global Entrepreneurship Week

Since 2015 DBRB acts as official Arranger and Sponsor.

It helps to establish the partnership between

government and private sector

Support of woodworking industry enterprises

in order to stimulate demand for the products of manufacturers of

furniture, doors and other construction enterprises

SME comprehensive support (II)

February 2017


ECAs Partner Banks

High Ratings by ECAs (= Sovereign Rating)

Established Credit Lines

To become key partner among Belarusian banks for foreign

financial institutions

18

Financing of large investment projects

And more …

Established Risk Limits

No Sovereign Guaranty Required!

INTERNATIONAL MARKET PRESENCE (I)

February 2017

19

Syndicated loans EUR 118 mln

EUR 120 mln / USD 15 mln

Syndicated loan EUR 130 mln

Syndicated loan EUR 50 mln

«Corporate Social Responsibility» ADFIAP

(Aleksandrov National Cancer Center support)

«Best National Development Bank» Emerging Markets - Euromoney

«Corporate Social Responsibility» ADFIAP

(«School bus» program)

2014 2015 2016


INTERNATIONAL MARKET PRESENCE (II)

Selected DCM transactions

International awards

February 2017

EUR 25 mln. EUR 23 mln. EUR 14 mln.

Project financing

PROJECTS MAP

20

Stadium construction in Borisov

The only football stadium in Belarus authorized by UEFA to held Champions League group stage

Reconstruction of the biathlon stadium “Raubichi”

Junior Biathlon World Championship and “The Race of Legends“ were held

Delivery of 3 Boeing NG737 jets for Belavia

Three new generation airplanes owned by Belavia with a cornflower brandbook

The purchase of mechanized Tunnel boring machine

Will accelerate the construction of the third underground line in Minsk by 2.5 times

Dairy plant construction in Turov

A unique Belarusian plant producing cheese of European varieties


Completed

February 2017

Second Minsk ring road construction

Total road length >160 km with a capacity of about 20 000 autos per 24 hours

USD 2 bn Construction of the third subway line in Minsk

Line length: 17.2 km/ 14 stations

EUR 235 mln Second runway construction

Location: Minsk National Airport Capacity: acceptable for Airbus A380

Current projects

Projects in pipeline

EUR 94 mln Tractor Stadium construction

in Minsk 21

EUR 20 mln Yeast plant construction in Slutsk

Capacity: 70 000 tons a year

USD 12 mln Construction of medical center

in Brest

PROJECTS MAP


Current & in pipeline

February 2017

EUR 85 mln Construction of the facilities for the 2nd European Games (2019)


SOCIAL RESPONSIBILITY

«School bus» program - over 300 special buses for safe study trips

and traveling

Our Head Office building provides opportunities to show the biggest art

and culture objects

DBRB – Belarusian State University Strategic Cooperation Agreement, training and first

working place for talented students

«School Bus» as viewed by children (Katya, 7 years) The world’s biggest gobelin in DBRB HQ (May, 2014) DBRB – BSU SCA Signing Ceremony (July 6, 2014)

Being the leader in financial business DBRB pays special attention to social projects

22

Special program «Young tennis stars» Vera Lapko , junior Australian Open 2016

Champion

Project «Cultural heritage of Belarus»: 1st edition - the book-album "Alexander Kishchenko. Chronicler of ХХ century "

Sponsoring for the renovation of medical diagnosis and treatment equipment of

Aleksandrov National Cancer Center

February 2017


Annexes

February 2017

CG STRUCTURE (MANAGEMENT BOARD)

Sergei Roumas Chairman

Tatsiana Sasnouskaya First Deputy Chairperson

Natallia Yasinskaya Deputy Chairperson

Vasili Shved Deputy Chairman

Siarhei Staliarchuk Head of International

Business

Pavel Dzik Head of Legal Department

Chairman Deputies Heads of business divisions

24

Ivan Varenitsa Deputy Chairman

Mariya Arlouskaya Chief Accountant

Alyaksei Zhyrankou Head of Active

Banking Operations


FIGURES (IFRS CONSOLIDATED)

3Q 2016 H1 2016 2015 2014 2013

Total Assets, mln. USD 2 736,1 2 455,5 2 608,5 3 156,7 3 333,7

Due from banks 172,3 198,8 136,1 173,2 167,0

Loans to customers 1 591,8 1 409,6 1 538,4 1 894,5 1 780,7

Securities available for sale 808,8 727,3 811,8 993,3 1 292,0

Property and other assets 163,2 119,8 122,2 95,7 94,0

Total liabilities and equity, mln. USD 2 736,1 2 455,5 2 608,5 3 156,7 3 333,7

Due to banks 436,0 321,8 365,6 288,5 133,1

Customers’ accounts 370,0 330,0 367,0 407,3 317,5

incl. Government’s deposits 366,3 326,2 353,3 402,5 298,8

Debt securities issued 1 008,0 945,6 995,8 1 445,0 1 793,2

Other liabilities 130,5 106,7 79,1 25,4 30,4

Equity 791,6 751,4 801,0 990,5 1 059,4

incl. Share capital 697,8 670,3 723,9 938,3 938,8

Net profit (loss), mln. USD 36,0 26,8 82,3 62,0 78,1

BYN/USD, eop 1,9264* 20 053 18 569 11 850 9 510

*Due to denomination of Belarusian ruble dd. 01.07.2016 (0000) 25


http://www.google.by/url?sa=i&rct=j&q=kpmg&source=images&cd=&cad=rja&docid=s7ISAan1lyGeZM&tbnid=B2SKdOr6Z_ABGM:&ved=0CAUQjRw&url=http://www.madi-profi.ru/Prezentacii_kompanii/master-klass_kpmg.php&ei=kP10UZ2yLcHsswacm4DIBw&bvm=bv.45512109,d.bGE&psig=AFQjCNEsmFs29U0jZ1kN_R0EYzNU-Ag5ng&ust=1366707981353613

CREDIT RATINGS

DBRB Credit Ratings Fully Correspond to Belarus Sovereign

Ratings

Long-term IDR: 'B-‘ Short-term IDR: 'B‘ Outlook Stable Assigned on February 5th 2014 Affirmed on August 5th 2015 Affirmed on July 12th 2016

Long-term issuer : 'B-‘ Short-term issuer : 'B‘ Outlook Stable Assigned on September 4th 2013 Affirmed on July 30th 2015 Affirmed on July 25th 2016

The bank has special legal status

Critical public policy role

Close association with authorities

Significant capital reserves

Selected DBRB Key Strengths viewed by

RAs

26


27

9 woodworking enterprises

Toxic assets (2007-2015)

Selling a pool of toxic assets

(USD 650 mln)

Management mandate

Management

• Strengthening of corporate governance system • Development strategy adjusting • Marketing policy adjusting • Analysis and optimization of technologies applied • Operating capital management • Independent examination • Attraction of direct investors

*Repayment

The core objective of BRRB management is to improve efficiency of woodworking enterprises with a view to return of assets to the Ministry of Finance of the Republic of Belarus spent to purchase the toxic assets pool.

Ministry of Finance

GOVERNMENT ADVISING

Wood industry products main exporter in Belarus


INTERNATIONAL BUSINESS TEAM Sergei Stolyarchuk Member of the Board Head of International Business Tel: + 375 17 309 66 47 Mob: + 375 44 564 00 41 E-mail: [email protected] Dzmitry Kuliashou Deputy Head of International Business Head of Trade and Structured Finance Tel: + 375 17 309 66 48 Mob: + 375 29 193 00 74 E-mail: [email protected] Alexandr Churilo Deputy Head of International Business Head of UK Office (London) Tel: + 44 20 3753 46 05 Mob: + 375 29 645 95 50 E-mail: [email protected] Artem Koptev Head of Financial Institutions Tel: + 375 17 239 11 28 Mob: + 375 29 317 17 24 E-mail: [email protected]

This presentation was prepared by JSC «Development Bank of the Republic of Belarus», International business department. All estimates and opinions present in this presentation constitute our judgments as of the date of the presentation preparation and may be subject to change without notice.

This presentation is intended for your reference only and it may not be circulated, distributed, reproduced or disclosed (in whole or in part or in any manner whatsoever) to third parties without the prior written consent of JSC «Development Bank of the Republic of Belarus».


JSC «Development Bank of the Republic of Belarus»

220002, Republic of Belarus, 35, Masherova av., 220002, Minsk

SWIFT: BRRB BY 2X Fax: +375 17 292 7016

www.brrb.by

Documents

More than years on the market · Maastricht criterion ... entrepreneurship and business development in small towns Global Entrepreneurship Week Since 2015 DBRB acts as official Arranger