Joint-Stock Bank
“Slavyanbank, Commercial Bank of Novgorod”
ANNUAL REPORT FOR 2011
NOVGOROD THE GREAT
Joint-Stock Bank
«Slavyanbank, Commercial Bank of
Novgorod»
Registered November 15, 1989 Reg. № 804
License by The Central Bank of
The Russian Federation for Banking
In roubles and foreign currencies
(with no right to attract funds of private individuals into deposits)
January 16, 2006 года № 804
Bank’s Shareholders:
-Legal Enterprises3,1%
-Private individuals 96,9 %
DEAR SHAREHOLDERS!
Being the first commercial Bank established in Novgorod region CJSC “NKB “Slavyanbank” precisely keeps its priorities in banking and providing credit services to a real economy of the region. About 80% of credit investments are long term investment projects which is currently our strategy.
The strategy and goals of the Bank were always defined by the needs of clients and interests of shareholders to strengthen positions of the Bank at the regional financial market and confirm its status as a universal bank. In spite of all difficulties of the passed period the Bank is stable and clients focused credit institution.
Reasonable low risk investments policy and consideration of economical and political risks in banking help to stand all the difficulties of the current period.
We are focusing on the core principles that have been central to CJSC “NKB “Slavyanbank”from the beginning.
By almost anyone’s evaluation of the Russian economy, 2011 was difficult. After shrinking more than ten percent in the previous periods, our nation’s economy dropped even more during 2011. Low refinancing rate of Bank of Russia and serious problems in economy caused balance losses to many credit institutions. The number of failed banks in 2011 was huge.
We made many difficult decisions during 2011. Among them were the adjustment of dividends to shareholders because of the losses appeared.
We considered the losses, analyzed the problems and have begun a steady climb back to the performance peak to which we are accustomed and that you expect and deserve.
In order to obtain a long term growth of the shareholder value of the Bank we will not substantially change our business strategy priorities in the future.
Let me take this opportunity to thank our bankers and other staff members for their hard work and focus and to thank you, our shareholders, for your loyalty and support. We look forward with you to the brighter days that are coming.
Viktor I.TITOV
Chairman of Board
MAIN RESULTS OF WORK IN 2010
In 2011 the Bank activity focused on financial support of customers, increase of customer base with the help of an attractive tariff policy aimed to provide a better quality of customer servicing.
CJSC “NKB “Slavyanbank” from the moment of its establishment has been carrying out a purposive policy to increase own funds (capital). In 2011 the main tasks of our development were keeping a high level of liquidity and capital maintenance in compliance with the requirements of the Bank of Russia.
The main source of the capital is profit of the Bank. Every year General Meeting of Shareholders takes a decision to leave undistributed profit at the Bank disposal, i.e. to use it to enlarge own funds (capital).
As of January, 1 2012 the capital was calculated in the sum of 214,2 million rubbles.
Total assets of the Bank on January, 1 2012 made up 893,7 million rubbles. In 2011 Bank operation turnovers amounted to 37,4 milliard rubbles. A day turnover amounted to 103,9 million rubbles.
In order to increase reliability and protection of depositors a reserve fund was established which made up 25% out of the capital stock of the Bank. Reserves for bank risks were also created. As for January 1, 2012 reserves for bank risks made up 53,4 million rubbles in full compliance with requirements of the Bank of Russia.
During the reporting year CJSC “NKB “Slavyanbank” provided for the optimal structure of assets and liabilities, followed the established operating standards. Capital adequacy as for January 1, 2012 exceeded the established minimum value in 4.1 times. Quick liquidity (H2) as for January 1, 2012 made up 91,3% and exceeded minimum set value in 6.1 times, current liquidity standard (H3) was 97.5 % when the minimum set value was 50%.
Thus the liquidity calculation figures were sufficiently high and were achieved and had a safety factor, what proved the Bank had a balanced structure of assets and liabilities, adequate quick assets to meet current liabilities and unanticipated withdrawals of funds. So the Bank disposed sufficient liquid assets which allowed meeting current, instant and forecasted liabilities in full.
CJSC “NKB “Slavyanbank” constantly provides charity support and sponsor assistance. It has become a tradition that each year the Bank takes part in the New Year Charity Maratho. The Bank provides help to health institutes, social and cultural organizations.
Further on main financial statements for 2011 are specified.
BALANCE SHEET RATIOCJSC “NKB “SLAVYANBANK”
As for January 1, 2012 (Thousand, Rubbles)
Key Indicators / 01.01.2012 / 01.01.2011 / Rate of growth/decrease
For the sum / in %
1.Assets / 893684 / 1 357 471 / -463 787 / -34.2%
2. Bank Operations Turnovers / 37395837 / 32 078 860 / 5 316 977 / 16.6%
3. One-Day Turnover / 103877 / 89 108 / 14 769 / 16.6%
4. Capital of the Bank / 214234 / 167 690 / 46 544 / 27.8%
5. Reserve Funds / 58222 / 61 179 / -2 957 / -4,8%
6. Cash Assets on the Correspondent Account of the Bank of Russia / 231734 / 863 653 / -631 919 / -60.7%
7. Cash Assets on Accounts in Foreign Bank-Correspondents / 39847 / 28 363 / 11 484 / 40.5%
8. Loan Debts - Total / 282091 / 261 349 / 20 742 / 7.9%
- of Legal Entities / 202718 / 160 599 / 42 119 / 26.2%
- of Individuals / 79373 / 100 750 / -21 377 / -21.2%
9. Incomings / 220 541 / 150 476 / 70 065 / 46.6%
10. Undistributed profit /loss / 46 557 / (19233) / 65 790 / х
11. Capital adequacy standard established by the Bank of Russia (min 11%) / 45.5% / 39.8% / х / х
12. Quick liquidity standard established by the Bank of Russia (min 15%) / 91.3% / 95.2% / х / х
13. Current liquidity standard established by the Bank of Russia (min 50%) / 97.5% / 97.1% / х / х
14. Long-term liquidity established by the Bank of Russia (max 120%) / 74.1% / 50.0% / х / х
15. Maximum risk for one borrower or a group of related borrowers established by the Bank of Russia (max 25%) / 18.7% / 12.7% / х / х
16. Maximum amount of large credit exposures established by the Bank of Russia (max 800%) / 73.4% / 89.4% / х / х
Structure of the capital
CREDIT INVESTMENTS
The main strategic aim of the Bank for credit activities is strengthening of its market positions, increase of credit provisions, observance of credit risk limits defined in Credit Policy and standard acts of the Bank of Russia.
In 2011 credit policy of the Bank was aimed at construction of a credit portfolio balanced with respects to dates, with diversified investments.
A special attention was brought to a quality of credit portfolio and to credit risk control. The main criteria when taking decisions to provide a credit were: a borrower’s ability to pay, quality and liquidity of a loan security and a borrower’s credit reputation.
Throughout the year under review the Bank provided credits to legal entities and individuals in rubbles and foreign currency. The main types of credit products offered to clients in 2011: were overdraft and commercial lending, opening of credit lines, retail lending for movable and real property and consumer needs.
During 2011 credits in the amount of 943,0 million rubbles were provided, 917,7 million rubbles was repaid.
The strategy priority for client policy of the Bank is long term partner relations with customers - small and medium sized enterprises, as well as mutual beneficial cooperation with large corporate clients.
In 2011 Credit policy was aimed at construction of a credit portfolio balanced with respects to dates, with diversified investments.
Sectoral structure of the credit portfolio of the Bank was sufficiently balanced, as investments were not accumulated for one sector development.
In accordance with development strategy crediting will remain to be the main business line.
Credit policy will be based on learning of promising directions of investment locations, aimed at effective interaction with companies of different business segments.
In its work the Bank will as before make partnership with clients as its main way of interaction, act fairly and reasonably with regards to employees, contractors and competitors.
Dynamics(changes) of credit investments
Structure of Credit Investments as of January 01, 2011
Structure of Credit Investments as of January 01, 2012
Bank Reporting
Territory Code as per OKATO(All-Russian Classifier of Political Subdivisions) / Credit Institution (Branch) Code
As per OKPO
(All-Russian Classifier of Businesses and Organizations) / MainState Registration Number / Registration Number (Order Number) / BIK (Bank Identification Code)
49401000000 / 09316087 / 1025300000175 / 804 / 044959775
BALANCE SHEET
(Published Data)
As for January 1, 2012 (Thousand, Rubbles)
Name of Credit Institution Closed Joint-Stock Company
«Novgorod Commercial Bank “Slavyanbank” (CJSC “NKB “Slavyanbank”)
Mailing address 173004, Veliky Novgorod, Cheremnova-Konyukhova str., 12
Form Code 0409806
Quarter/ Annual
№order /
Clause Name
/ Data as for Reporting Date / Date as for Corresponding Reporting Date of the Last Year1 / 2 / 3 / 4
I. Assets
1 / Cash Assets / 12 194 / 15 2902 / Funds of Credit Institutions in the Central Bank of the Russian Federation / 236 586 / 866 520
2.1 / Reserve Requirements / 4 852 / 2 867
3 / Funds in Credit Institutions / 39 853 / 28 374
4 / Net Investments in Securities at Fair Value Through Profit or Loss / 0 / 0
5 / Net Lending Receivables / 229 463 / 205 733
6 / Net Investments in Investment Securities and Other Financial Assets, Available for Sale / 0 / 0
6.1 / Investments in Affiliates / 0 / 0
7 / Net Investments in Securities Held-to-Maturity / 0 / 0
8 / Fixed Assets, Intangible Assets and Material Assets / 126 017 / 142 819
9 / Other Assets / 186 / 426
10 / Total of Assets / 644 299 / 1 259 162
II. Liabilities
11 / Credits, Deposits and Other Funds of Central Bank of the Russian Federation / 0 / 0
12 / Funds of Credit Institutions / 0 / 0
13 / Customer Funds (Non-Credit Institution) / 428 712 / 1 065 794
13.1 / Retail Deposits / 77 317 / 74 549
14 / Financial Commitments at Fair Value Through Profit or Loss / 0 / 0
15 / Certified Debts / 0 / 25 000
16 / Other Commitments / 945 / 381
17 / Loan Loss Provisions for Credit Contingent Obligations, for other Possible Losses and Operations with Offshore Residents / 355 / 257
18 / Total of Liabilities / 430 012 / 1 091 432
III. Sources of Fixed Assets
19 / Shareholder (Participant) Funds / 5 450 / 5 450
20 / Own Shares (Parts) Redeemed from Shareholders (Participants) / 0 / 0
21 / Emissive Income / 0 / 0
22 / Reserve Fund / 1 363 / 1 363
23 / Revaluation of Securities at Fair Value Available for Sale / 0 / 0
24 / Fixed Assets Revaluation / 80 762 / 80 766
25 / Undistributed Profit of Previous Years (Uncovered Losses) / 80 155 / 99 384
26 / Expired Profit (Loss) for the Reporting Period / 46 557 / -19 233
27 / Total of Sources of Fixed Assets / 214 287 / 167 730
IV. Off-Balance Sheet Liability
28 / Irrevocable Liabilities of Credit Institution / 28 956 / 42 44729 / Warranties and Guarantees Issued by Credit Institutions / 16 920 / 17 563
30 / Conditional liabilities of non-credit basis / 0 / 0
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PROFIT AND LOSS STATEMENTS
(Published Data)
for 2011
Name of Credit Institution Closed Joint-Stock Company
«Novgorod Commercial Bank “Slavyanbank” (CJSC “NKB “Slavyanbank”)
Mailing address 173004, Veliky Novgorod, Cheremnova-Konyukhova str., 12
Form Code 0409807
Quarter/Annual
Thousand/Rub
№order /
Clause Name
/ Data as for Reporting Date / Date as for Corresponding Reporting Date of the Last Year1 / 2 / 3 / 4
1 / Interest Income, total, including: / 37 092 / 48 851
1.1 / From Allocation of Funds in Credit Institutions / 0 / 261
1.2 / From Loans Provided to Clients (Non Credit Institutions) / 37 092 / 48 590
1.3 / From Financial Rent Services (Leasing) / 0 / 0
1.4 / From Investments in Securities / 0 / 0
2 / Interest Expenses, total, including: / 14 924 / 22 092
2.1 / On Debt Funds of Credit Institutions / 0 / 0
2.2 / On Debt Funds of Clients (Non-Credit Institutions) / 14 568 / 19 164
2.3 / On Issued Bonds / 356 / 2 928
3 / Net Interests (Negative Interest Margin) / 22 168 / 26 759
4 / Loans Provisions Change, of Loan and Equal to Loan Debt, and also Funds Placed on Correspondent Accounts, total, including: / 861 / -25 826
4.1 / Change of Accrued Interests Loss Provision / 2 017 / -1 484
5 / Net Interest Incomes (Negative Interest Margin) after Establishing of Loan Loss Provisions / 23 029 / 933
6 / Net Incomings from Operations with Securities at Fair Value Through Profit or Loss / 0 / 0
7 / Net Incomings from Operations with Securities Available for Sale / 0 / 0
8 / Net Incomings from Operations with Securities Held-to-Maturity / 0 / 0
9 / Net Incomings from Operations with Foreign Currency / 1 417 / 938
10 / Net Incomings from Revaluation of Foreign Currency / 564 / -803
11 / Incomings from Participation in Capital of Other Legal Entities / 0 / 0
12 / Commission Incomings / 56 915 / 19 271
13 / Commission Expenses / 1 047 / 925
14 / Change of Loss Provision of Securities Available for Sale / 0 / 1 640
15 / Change of Loss Provision of Securities Held-to-Maturity / 0 / 0
16 / Other Loss Provision Change / -1242 / -192
17 / Other Operating Incomings / 11 646 / 273
18 / Net Incomings (Expenses) / 92 400 / 21 135
19 / Operating Expenses / 39 395 / 39 657
20 / Profit Loss Before Tax / 53 005 / -18 522
21 / Accrued (Paid) Taxes / 6 448 / 711
22 / Profit (Loss) After Tax / 46 557 / -19 233
23 / Payments out of Profit after Taxation, total, including: / 0 / 0
23.1 / Distribution in Dividends between Shareholders (Participants) / 0 / 0
23.2 / Deductions to Establish and Enlarge Reserve Fund / 0 / 0
24. / Expired Profit (Loss) for the Reporting Period / 46 557 / -19 233
Checked Annual Accounting Statements with regards to all essential aspects were prepared in compliance with law and standard acts for accounting and preparation of accounting statements in force in the Russian Federation and the established regulations for book-keeping.Trustworthiness of Balance, Profit and Loss Statements, and data about funds movement and fulfillment of main requirements established by standard acts of the Bank of Russia is confirmed.
Detailed information about trustworthiness of statements of the Credit Institution including information specified above is defined in Audit Conclusion about Trustworthiness of Statements of the Credit Institution as for January 1, 2012.
The name of The Auditing Company / Lability Limited Company “ Scientific and Industrial Company Informauditservice (Moscow) OGRN 1037739372703 INN 7703072280In association with self-regulating organization of Auditers of non-commercial partnership Auditing Association “Commonwelth” (AAC)
Inscription in Register of Auditors and Auditing Companies of AAC made on / January 27, .2010 ОРНЗ 1100600662
The bank provides its clients with the following services:
- Settlement - cash servicing, interbank and INTAGRATED CLEARING AND CASH SERVICE in RUR and foreign currencies, providing the client with fastening personal account manager.
- CURRENCY REGULATION in RUR and foreign currencies in foreign trade operations, registration of transaction certificates in the presence of client, consultation on currency and custom legislation.
- OPENING OPERATIONAL CASH DEPARTMENTS, REPRESENTATIONS, ADDITIONAL OFFICES FOR INDIVIDUAL PROJECTS for organization of bank services in the client territory, including that of its employees.
- PLACEMENT OF CLIENTS’ FUNDS IN BANK DEPOSITS in RUR and foreign currencies.
- DOCUMENTARY OPERATIONS in RUR and foreign currencies including advising and confirmation of bank guarantees, letters of credit, drafts and documentary collections.
- CREDITING in RUR and foreign currencies in the form of simple credits and credit lines, including renewable ones, issuing guarantees and counter guarantees, issuing of letters of credit without reservation of funds on client’s account, bill crediting.
- OPERATIONS IN MONEY MARKET purchasing and sale of securities, development and realization of the individual programs.
- COMPREHENSIVE DEPOSITORY SERVICES
- CONSULTATION SERVICES to enterprises on banking aspects and items.
- ADVANCED SERVICE TECHNOLOGIES, including acceptance of client’s payment instructions in RUR and foreign currencies using “Bank-Client” automated system and a flexible system of through the internet, usage of telephone and facsimile communication to transfer information on transaction and balance on accounts to clients in the confidentiality mode, providing the client with a personal account manager.
In 2003 CJSC “NKB “Slavyanbank” for a high quality of banking operations got a Winner’s Certificate in the program Novgorod Quality Priorities from the Administration of Novgorod region.
The Chairman of Board of the Bank Titov Viktor Ivanovich for his personal substantial contribution to the increase of services quality was awarded by a golden medal. Only one of Novgorod banks received such an award.
In 2004 the Coordination Committee of International Program Partnership for Progress approved “Slavyanbank” for participation in the Program and provided to the Bank a Registration Certificate. In November 2004 on the 15th Anniversary of the Bank Titov V.I. as a Manager got a Nominal Certificate and Memorable Lapel Badge “Golden Standard” of the Ist degree.
In 2005 the Guardian Council of Charity Fund Philanthropists of the Century awarded “Slavyanbank” a Philanthropist Golden Diploma for a remarkable contribution in reaching lofty ideals of immateriality and charity.
In June 2008 the Academic Council of the RussianEconomicAcademy named after G.V. Plekhanov decided to give to the Chairman of Board Titov Viktor Ivanovich the Rank of Honorable Doctor of Science, a Certificate and a membership card of International Club of Honorable Doctors of Science of the RussianEconomicAcademy named after G.V. Plekhanov.
In August 2008 according to Resolution of Novgorod Region Duma the Chairman of Board Titov V.I received a Certificate of Honor for his remarkable contribution to the implementation of region legislation due to his long term conscientious work in the area of financial and credit policy of Novgorod region.
In September 2008 the Governor of Novgorod region S.G. Mitin awarded a commendation to the Manager of the Bank Titov Viktor Ivanovich for his long conscientious work, high qualification, and substantial contribution to development of bank system of the region.
In September 2009 Administration of Veliky Novgorod sent a letter of gratitude and expressed a sincere appreciation to CJSC “NKB “Slavyanbank” for its substantial contribution to preparation and celebration of the 1150th Anniversary of Veliky Novgorod foundation.
CJSC “NKB “Slavyanbank” has financial, technical, information abilities and specialists to perform bank operations using funds in rubbles and foreign currency.
During 20 years of its activity each year and persistently CJSC “NKB “Slavyanbank” conducts business and gains profit, including years of defaults. During the whole period of its activity the Bank keeps on following economic standards and reserve requirements established by the Bank of Russia. Financial status stability is ensured due to a high qualification of specialists of the Bank, a thorough analysis of credit programs, investment risk assessments.
The Bank has an efficient system for control and monitoring of liquidity, paying abilities and risks, provides for the best structure of assets and liabilities and follows established standards of capital adequacy and liquidity.
The quality of Bank management and internal control corresponds to the performed activities and amount of them.
List of foreign correspondents
COMMERZBANK AG
FRANKFURT-АМ-МАIN
COBADEFF
For business contacts
JOINT-STOCK BANK
“SLAVYANBANK, COMMERCIAL BANK OF NOVGOROD”
The postal address: Cheremnova-Konyuhova str., 12, Novgorod, 173004 RUSSIA
The telephone: +7 8162 665247 (665254)
Fax: +7 8162 665247
Telex: 237128 SLAVB RU
E-mail:
Internet site:
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