TRADE FINANCE: What the Customer WantsWhat the Customer Wants Minsk ... 2016-2018 STRATEGIC GOALS Bank BelVEB Profile March, 2016 One of the country’sleading banks, the Bank operates

TRADE FINANCE:What the Customer

Wants

Minsk

March, 2016

Внешэкономбанк / /

2

Bank BelVEB Profile

Trade and Structured Finance in Bank BelVEB: Key

Performance Indicators

What the Customer Wants?

Trends and Expectations

CONTENTS


3

Bank BelVEB Profile





CONTENTS


4

The Bank sees its Mission in facilitating and assisting customers from Russia and Belarus insuccessful implementation of their mutual business initiatives

MISSION

1. Increasing the number of Russia-Belarus trade transactions in the Bank’s corporate portfolio,including Russia exports target financing, promoting integration and facilitating joint projects.

2. Becoming a high-tech bank due to introduction of up-to-date customer-centered bankingtechnologies and raising the share of products and services provided via distant banking.

3. Keeping the Bank’s equity sufficient to ensure safety of shareholders’ investment into theauthorized capital.

2016-2018 STRATEGIC GOALS

Bank BelVEB Profile

March, 2016

One of the country’s leading banks, the Bank operates as a credit and financial institutionserving the real sector of the economy and focusing on foreign trade transactions

POSITIONING


55March, 2016

.

Branch Networkbranches – 18centers of retail services – 15banking outlets – 22currency exchange offices – 15

Distant Banking

Call Center

SALES CHANNELS

Bank BelVEB Profile


66March, 2016

In 2015, Bank BelVEB managed to retain its market position among leading banks in Belarus. The Bank attained the 5thplace in themarket in terms of assets and equity and became 7th in terms of legal capital, which is in line with its goals.

MARKET SHARE

Bank BelVEB Profile

3.8

5.2

4.6

5.3

6.3

5.15.1

6.8

5.55.5

6.1

5.1

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

Assets Legal capital Equity capital

%

market share as of 01.01.2011 market share as of 01.01.2013


5th

posi

tion

5th

posi

tion

4th

posi

tion

3rd

posi

tion

4th

posi

tion

4th

posi

tion

6th

posi

tion

3rd

posi

tion

5th

posi

tion

5th

posi

tion

6th

posi

tion

5th

posi

tion


77March, 2016

.

In 2015, Bank BelVEB managed to retain its market position in lending, depositing and trade finance sectors. Sustainable growth inthe Bank’s share in customer deposits and loans shall be emphasized along with its solid performance in trade finance business.

MARKET SHARE

Bank BelVEB Profile

2.72.0

3.03.6

4.8

14.6

3.84.5

15.5

4.65.2

18.4

0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

16,0

18,0

20,0

Customer deposits Customer loans Documentary operations exposure

%



7th

posi

tion

7th

posi

tion

7th

posi

tion

6th

posi

tion

5th

posi

tion

5th

posi

tion

8th

posi

tion

3rd

posi

tion

2nd

posi

tion

2nd

posi

tion

7th

posi

tion

5th

posi

tion


8

Bank BelVEB Profile

Trade and Structured Finance: Key Performance

Indicators



CONTENTS


9

Key Performance Indicators

9March, 2016

Total Market Documentary Operations Exposure (EUR million)

0,00

500,00

1 000,00

1 500,00

2 000,00

2 500,00

01.01.2013 01.07.2013 01.01.2014 01.07.2014 01.01.2015 01.07.2015

Bank BelVEB

Other

banks

Documentary operations exposure going down due to decline in foreign trade

Other

banks


10


10March, 2016

Documentary Operations Exposure (market share)

Bank BelVEB; 16%

12%

34%

9%

6%

6%

5%

7%

3%

2%End of Y2014

Bank BelVEB; 18%

8%

32%

9%

7%

4%

4%

9%

8%

1%End of Y2015

Bank BelVEB remaining second in Belarusian Trade Finance


11


11March, 2016

TOP-5 Market Leaders’ Documentary Operations Exposure to Assets Ratio

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Bank BelVEB Other Banks


12


12March, 2016

Major Market Drivers

• decline in foreign trade turnover due to economic recession in Belarus

and Russia;

• phase-down of corporate investment projects;

• negative impact of EU and US sectoral sanctions against Russian state

banks and their subsidiaries in Belarus;

• reduction of risk-appetite of European banks to accept Russian risk;

• lifting of restrictions on advance payments in f/o non-residents by the

National Bank of Belarus.


13

Bank BelVEB Profile





CONTENTS


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14March, 2016

Key TF Products

Corporates Privates Financial Institutions

Documentary Credits Documentary Credits Documentary Credits

Guarantees Guarantees Guarantees

Short-term post-financing Short-term post-financing LC confirmation

ECA covered loans Post-financing

Pre-export and export

financing

Short-term and long-term

financing under special

program of VEB and

RosEximBank


15


15March, 2016

LC Business Structure. Geography

0

50

100

150

200

250

300

350

400

Russia Germany China Italy Belarus Poland Other

2014

2015

The share of LCs opened in f/o Russian beneficiaries increased from 22% in

2014 to 83% in 2015 (in terms of LC value)


0

20

40

60

80

100

120

140

160

Germany China Poland Italy Russia Korea Japan Other

2014

2015

16


16March, 2016

LC Business Structure. Geography

Each fourth LC opened by Bank BelVEB in 2015 was opened in f/o a Russian

beneficiary


17


17March, 2016

LC Business Structure. Confirmation

confirmed on clean basis

40%

confirmed under IRU

52%

confirmed under EBRD

guar.5%

unconfirmed3%

confirmed on clean basis

80%

confirmed under IRU

13%

unconfirmed7%

Y2014 Y2015

In 2014, each second LC was confirmed under IRU of a Russian bank.

In 2015, only 13% of LCs were issued using such structure.


18


18March, 2016

LC Business Structure. Financing

0

50

100

150

200

250

300

350

400

Without financing Financing up to 1 year Financing > 1 year

2014

2015

The demand for long-term financing shrinked 10 times


19


19March, 2016

Bank BelVEB: ECA covered loans (post-financing), Y2015

SACE

Euler Hermes

KUKE

EXIAR

More than a half of ECA covered loans attracted by Bank BelVEB in 2015 were

covered by EXIAR


20

Bank BelVEB Profile





CONTENTS


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21March, 2016

TF in Belarus. Forecast for Y2016

Trend Drivers

Further decline in LC

business

- foreign trade decline

- low-level investment activity

Switching from long-term

to short-term financing

- investment programs phase-down

- limited offer of long-term financing from exporter

banks

- decrease of risk appetite of Belarusian banks to

provide long-term financing

Increase in ‘Russian’

transactions share

- improved competitiveness of Russian production due

to the rouble depreciation

-- streamlining of the system of Russian exports

financing

TF business trends of 2015 will remain in 2016


22


22March, 2016

TF in Bank BelVEB. Forecast for Y2016

In 2016, Bank BelVEB will strive to reserve its market positions,

including trade finance business

1. Approval of 2016-2018 Business Strategy of Bank BelVEB

2. 100% utilization of VEB financing outlined in the Business Strategy

3. No need in additional funding for reasons of on-lending or liquidity support

4. Full risk realization of EU and US sectoral sanctions against

Vnesheconombank in 2014-2015

Operating Conditions for Y2016

Thank you!

Documents

TRADE FINANCE: What the Customer WantsWhat the Customer Wants Minsk ... 2016-2018 STRATEGIC GOALS Bank BelVEB Profile March, 2016 One of the country’sleading banks, the Bank operates