ANNUAL REPORT report_english_2010_1207.pdf · par in his novel «El anacronópete» (neologism:...

ANNUAL REPORT

[ANNUAL REPORT] [2010]www.belapb.by

CONTENTSANNUAL REPORT

[1] Letter to shareholders, clients and partners of the bank

[2] Highlights 2010

[3] Market share

[4] Resource potential

[5] Retail banking

[6] Corporate banking

[7] International cooperation

[8] Credit ratings of JSC Belagroprombank

[9] Partner banks

[10] Financial statements prepared in accordance with national accounting standards Auditors’ report

[11] Balance sheet as of January 1, 2011

[12] Profit & loss statement 2010 Financial statements prepared in accordance with IFRS

[13] Business objectives 2011

3

5

7

9

11

15

19

23

25

29

33

35

37

JSC BELAGROPROMBANK3 Zhukov Ave220036 Minsk

Republic of Belarustel.: +375 17 218 57 77/15

fax: +375 17 218 57 14www.belapb.by

e-mail: [email protected]

[ANNUAL REPORT] [PART 1]www.belapb.by

DEAR SHAREHOLDERS, CLIENTS AND PARTNERS OF JSC BELAGROPROMBANK!

[3]

[FUTUROLOGY]Futurology (from Lat. “Futurum” - future and from Greek “Logos” - study) is the study for forecast-ing future developments by extrapolating existing technological, economic and social trends or by attempting to anticipate future patterns. The term “futurology” was introduced by the sociologist Ossip Flechtheim in 1943 in his letter to the writer Aldous Huxley, who accepted the term with en-thusiasm and put it into use.

We take pleasure in presenting to you the annu-al report of JSC Belagroprombank for the year 2010, which for a number of reasons emerged as a significant and symbolic year for our bank. Firstly, the previous year finalized the implemen-tation of the development program of JSC Bela-groprombank. Today we can justly consider that the bank accomplished its key tasks on the im-provement of its performance and achievement of its quantitative targets.

Secondly, a new five-year performance strategy was developed and adopted by Belagroprom-bank in 2010. The strategy sets out large-scale and bold objectives that will enable the bank to move to a higher level of development and strengthen its positions in the financial market of the Republic of Belarus.

And finally, 2010 started the countdown towards the 20th anniversary since Belagroprombank be-came an independent financial institution. As the bank approaches this eminent date, it boasts a reputation of the largest creditor of the national economy offering a wide array of banking prod-ucts across all regions of the country, as well as a trusted business partner who meets its commit-ments in full and in a timely manner.

The design of this Annual Report is built in such a way that it illustrates how people in the past viewed the future. Today, just like many centuries ago, the image of perception of the remote fu-ture is painted with the colours of life experience accumulated over generations and the colours of inexhaustible imagination. All this arouses our striving towards growth, improvement and unveil-ing the future.

Sincerely yours, V.I.Podkovyrov

Chairman of the Board Belagroprombank JSC


HIGHLIGHTS 2010

[5]

[PREDICTIONS IN ANCIENT TIMES. THE ICA STONES]The Ica stones that date back to the 14-16 centu-ries and are engraved with easy-to-guess depic-tions of prototypes of the modern objects were found in the province of Ica in Peru. A telescope is one of the most famous predictions of the Ica stones.

AUGUST

Belagroprombank becomes the first Belarusian financial institution to adopt the quality manage-ment system for retail customer service and ob-tain the ISO 9001 certificate of compliance.

OCTOBER

JSC Belagroprombank holds a conference “Fi-nancing New Technologies in Dairy Industry” in Milan (Italy).

NOVEMBER

The bank makes a breakthrough in retail customer service. The total retail loan portfolio exceeded BYR 1 trillion, while the number of bank-issued cards reached 1 million.

Belagroprombank acts as the general partner of the two important events in the economic and cultural life of the country - Belarus Investment Forum in Frank-furt-am-Main (Germany) and Junior Eurovision Song Contest 2010 in Minsk.

DECEMBER

The bank’s Supervisory Board adopted the strat-egy of JSC Belagroprombank for the years 2011-2015.

Chairman of the Board of JSC Belagroprombank Sergei Roumas is appointed Deputy Prime Minis-ter of the Republic of Belarus in accordance with the Decree of the President of the Republic of Belarus.

APRIL

The meeting of the Central Committee of the In-ternational Confederation of Agricultural Credit (C.I.C.A.) is held under the auspices of JSC Bela-groprombank in Minsk.

MAY

Standard & Poor’s ratings agency assigns Belag-roprombank local and foreign currency counter-party credit ratings. The ratings assigned to the bank are the highest possible for the Republic of Belarus.

JUNE

General Cooperation Agreement signed be-tween Intesa Sanpaolo S.p.A. and JSC Belagro-prombank, which created the conditions neces-sary for a closer cooperation between the two leading banks of the Italian Republic and the Republic of Belarus.

JULY

According to the Banker magazine, JSC Belag-roprombank is once again included into the list of Top World Banks and the leading banks of Central and Eastern Europe.


MARKET SHARE

[7]

[PREDICTIONS DURING THE RENAIS-SANCE PERIOD. LEONARDO DA VINCI]The scientific works by the famous Florentine man Leonardo Da Vinci significantly shaped the time period in which he lived. For example, his ideas of the so called “air screw” provided the basis for the construction of helicopters.

Market share of JSC Belagroprombank in the banking system of the Republic of Belarus as of January 1, 2011, %

Authorized fund

Equity Resource base

Corporate loans

35,5

24,6

32,641,6

Dynamics of market share in retail banking, %

01.01.2010

01.01.2011

Retail deposits

Retail loans (excluding pref-erential loans)

Credit cards issue

11,3 11,7

29,2 37,5

10,3 11,1

In 2010 JSC Belagroprombank consistently ex-panded its presence across key sectors of the domestic financial market.

The bank retained the status of one of the lead-ing Belarusian financial institutions by authorized fund and equity. JSC Belagroprombank boasts nearly 1/4 share in the resource base of the country’s banking industry.

Since the fourth quarter of the accounting year JSC Belagroprombank has been ranked first among its peers by loans to corporate custom-ers. As of January 1, 2011 Belagroprombank has a market share of more than 1/3 in the total

corporate loan portfolio of the domestic banking sector. In 2010 the bank moved from the 5th rank to the 2nd in terms of corporate deposits, as its market share in this field increased from 7,5 to 13,5%.

JSC Belagroprombank is invariably among ma-jor players in retail financial market, ranking 2nd in terms of attracting retail customer funds and 3rd in terms of total retail loans and total bank cards issuance. Over the past year the bank in-creased its market share in card issuance from 29,2 to 37,5% and is now the sole leader in this sector.

[9]


RESOURCE POTENTIAL[PREDICTIONS OF FUTURE DISCOVERIES. 17TH CENTURY. ROBERT BOYLE]The great English scientist Robert Boyle predicted the development of many technologies that exist now-adays. For example, he predicted that humankind would build airplanes, big vessels equipped with high-powered engines, and air-cushion crafts. The predictions of the great physicist, chemist and phi-losopher come true with striking precision.

Dynamics of resource base, BYR billion

Customer accounts and funds raised by the issue of securities EquityDue to resident banksDue to non-resident banksOther liabilities

45,523,3

7,8

5,1

18,3

Resource base structure of JSC Belagroprombank as of January 1, 2011, %

The growing needs to finance the real sector of economy and the current policy in expanding the presence at the retail lending market require constant efforts aimed at building up the bank’s resource base.

In 2010 the bank’s resource potential increased by 1,6 times to BYR 31,4 trillion as of January 1, 2011.

More than 45% (or BYR 14,3 trillion) of Belag-roprombank’s resource portfolio falls on current accounts, deposit accounts and other customer accounts, as well as funds raised via the issue of securities.

Increase in authorized fund, profitable perfor-mance and capitalization of the dominating part of revenue in the bank’s funds in the accounting period ensured the growth of the bank’s equity by 1,3 times, or BYR 1,3 trillion. As of January 1, 2011 the bank’s equity made up 18,3% of Belagroprombank’s resource.

01.01.2011

01.01.2010

01.01.2009

01.01.2008

01.01.2007 5 741

8 213

15 570

20 240

31 354


RETAIL BANKING

[11]

[PREDICTIONS OF FUTURE DISCOVERIES. 19TH CENTURY. ENRIQUE GASPAR]The guesswork about the possibility to travel through time and space was first expressed by Enrique Gas-par in his novel «El anacronópete» (neologism: “fly-ing towards the time”). In his work the writer not only suggested the existence of the “time machine”, but also gave a detailed description of how it works. Despite the fact that the time machine has not been invented yet, this idea remains relevant to present day and is further developed by modern scientists.

Dynamics of retail customer accounts, BYR billion

01.01.201101.01.201001.01.200901.01.200801.01.2007

2 858

1 5092 128

1 171832

Retail banking is one the most promising fields in business development. In this regard, JSC Be-lagroprombank has been taking active steps to expand the infrastructure for retail customer ser-vice. The bank’s branch network was further ex-panded by adding 17 new cash-and-settlement centres and 11 currency exchange outlets in the reporting year. As a result, the bank’s branch network across the country totals 368. The bank’s geographical accessibility and convenient branch opening times consistent with a comprehensive range of retail financing products and competi-tive terms are the key contributors to increasing

the retail customer base. In 2010 the number of retail customers holding accounts with Belagro-prombank grew by more than 170 thousand to reach nearly 1,7 million, which accounts for 35% of the total number of persons employed in the national economy.

Notwithstanding high competitiveness in the mar-ket of retail deposits, JSC Belagroprombank managed to increase its retail deposits share from 11,3 to 11,7% in 2010. Over the year, total retail customer deposits grew by BYR 730 billion to BYR 2,9 trillion as of January 1, 2011.

Particularly, during 2010 the number of ATMs installed by the bank grew by more than 1/3, while the number of information kiosks increased by 27% and the number of electronic payment terminals at merchants and post offices grew by 2,4 times. Internet banking service enjoys grow-ing popularity among cardholders, with over 155 thousand users as of January 1, 2011.

Along with striving to expand the scale of retail business, the bank carries out consistent activities towards improving the organizational aspects of retail customer service and enhancing customer service quality. Last year JSC Belagroprombank successfully adopted the quality management system for the most demanded retail banking products and became the first Belarusian bank to obtain the certificate of ISO 9001 standard compliance.

[ANNUAL REPORT] [PART 5][PART 5] www.belapb.by

RETAIL BANKINGRETAIL BANKING

[13][12]

[ANNUAL REPORT] www.belapb.by

Belagroprombank-issued cards in circulation, thsd

Dynamics of retail loan portfolio, BYR billion

Through 2010 the bank has been committed to expanding its footprint in retail lending. As a result, JSC Belagroprombank made a break-through and became a leader in credit card loans. In the reporting period the bank’s share in total retail lending portfolio went upward from 10,3 to 11,1%. Overall, in 2010 the bank’s retail loan portfolio grew by 29%, enabling the bank to pass the symbolic milestone of BYR 1 trillion in retail loans.

In 2010 the bank issued its one-millionth plas-tic card, which became another significant event for Belagroprombank in retail customer service. Card technologies across retail customer services are considered as a key element by the bank, therefore, along with measures to increase card issuance volumes, the bank takes progressive steps to expand its offering of services available to cardholders and extend its own network of terminal equipment that supports plastic card transactions.

01.01.201101.01.201001.01.200901.01.200801.01.2007

1 134

880

617

294140

01.01.201101.01.201001.01.200901.01.200801.01.2007

1 030

854

591344

236


CORPORATE BANKING

[15]During 2010 Belagroprombank continued to strengthen its position in corporate customer ser-vice.

A full array of financial services and flexible pric-ing and interest policy designed to suit the needs of various business entities enabled the bank to increase its customer base.

Over the past year Belagroprombank’s corpo-rate customer base grew by 3,8 thousand cus-tomers and totalled over 37 thousand at the end of 2010.

Growth of the corporate customer base com-bined with the increase in business activity en-abled the bank to grow funds accumulated at corporate current accounts by 1,5 times.

[PREDICTIONS OF FUTURE DISCOVERIES. 19TH – 20TH CENTURIES. HERBERT WELLS]In his works the British writer and publicist Herbert Wells described the social and economic patterns of the future world and tells a story about a man’s journey to the Moon. In his novel “When the Sleeper Wakes” Wells expresses some assumptions and predictions about the structure and appearance of the future cities with cyclopean buildings linked by numerous bridges, cable ways and self-moving streets. Architectural and technological solutions in construc-tion of modern megalopolises gradually embody certain ideas of the writer.

01.01.201101.01.201001.01.200901.01.200801.01.2007

37 070

33 29929 915

27 069

24 636

Corporate client base

[ANNUAL REPORT] [ГЛАВА 6][PART 6] www.belapb.by

CORPORATE BANKINGCORPORATE BANKING

[17][16] Belagroprombank’s asset structure is to some ex-tent made up of corporate account transactions. As an agent to implement Government programs, the bank puts a particular focus on lending to the agro industrial sector. Belagroprombank backed up economic entities by granting them loans worth BYR 7,6 trillion, of which 58% account for investments. Long-term lending is mainly ear-marked for housing construction in rural area, construction and reconstruction of production

facilities of agricultural enterprises, purchase of agricultural equipment, technical re-equipment of processing industry and financing of innova-tive development programs for various fields of the country’s economy. In 2010 the bank’s total corporate loan portfolio increased by 1,4 times to BYR 24,4 trillion. With the account of corporate bonds purchased by the bank, Belag-roprombank’s total investments into the domestic economy reached BYR 25,5 trillion.

The bank has been steadily and actively rais-ing temporary free funds from domestic enter-prises. For this purpose, the bank has established a tight cooperation with capital-intensive enter-prises across all regions of the country related to raising funds into term deposits, and issues debt securities.

During 2010 total funds held at corporate ac-counts went up by 3 times and exceeded BYR 3,3 trillion.

As the bank strives to improve its corporate cus-tomer service, it focuses on a wide use of mod-ern financial transactions. Over the past year, the number of users of the “Client-Bank” remote service system went up by 1,5 thousand to more than 8 thousand as of January 1, 2011. In 2010 the number of retail enterprises using card ac-quiring services rose by 3,6 times and reached 2,5 thousand.


Structure of corporate loan portfolio (as of January 1, 2011, %)

71,8

28,2short-term loans

by maturity

long-term loans

14,4

85,6

by currency

local currency loans

foreign currency loans

Dynamics of corporate loan portfolio, BYR billion

01.01.201101.01.201001.01.200901.01.200801.01.2007

24 399

17 704

12 4966 716

4 391

During the reporting period the bank further ex-panded cooperation with foreign financial institu-tions, primarily focusing on raising funds for the country’s economy.

In 2010 the bank raised short-term credit facili-ties which enabled it to finance over 300 foreign trade projects worth USD 559 million.

While JSC Belagroprombank implemented 150 long-term projects for enterprises, it managed to raise facilities worth USD 189,5 million. The majority of long-term financing transactions were carried out thanks to existing and developing business relations with leading European export insurance agencies. In particular, Belagroprom-

bank for the first time in the Republic of Belarus attracted long-term credit resources under insur-ance of Atradius export insurance agency (the Netherlands).

Untied borrowings obtained by the bank in 2010 totalled USD 128,4 million. The most significant project of untied borrowings in 2010 was the issuing of USD 100 million worth of credit notes by JSC Belagroprombank due 2013. The deal is very much similar to the Eurobond note issue. Besides, the credit note issue was the first project in the banking sector of the Republic of Belarus with such a long borrowing period.


INTERNATIONAL COOPERATION

[19]

[PREDICTIONS OF FUTURE DISCOVERIES. 20TH CENTURY. KAREL CAPEK]The word “robot” was introduced in the play “R.U.R.” by the Czech playwright Karel Capek in 1920. The play scenes a factory that makes robots for unskilled labour. As a result, the notion “robot” entered into common use as the name of the human-like machine that performs tasks on its own.


INTERNATIONAL COOPERATIONINTERNATIONAL COOPERATION

[21][20] In the reporting period international money trans-fers by JSC Belagroprombank went up by nearly 1/4, while documentary operations increased by 2,3 times.

Last year the bank actively cooperated with the European Bank for Reconstruction and Develop-ment (EBRD). In May 2010 Belagroprombank and EBRD signed the mandatory letter, which proved their mutual interest in implementing small and medium enterprises credit projects in the Re-public of Belarus, as well as financing within the trade promotion program.

The highlight of 2010 in international coopera-tion for Belagroprombank was the meeting of the Central Committee of the International Con-federation of Agricultural Credit (CICA) that was held in Minsk. This large-scale event which was attended by managers of many of the world’s leading financial organisations, contributed to establishing a tighter cooperation with related financial institutions as well as improving the country’s image in the eyes of the international business community.

Overall, in 2010 the bank raised tied and untied credit facilities worth USD 876,9 million, exceed-ing the previous year’s figure by 1,6 times. Be-lagroprombank raised USD 1,7 billion in total, including treasure operations with foreign banks.

Increased business activity of the bank-serviced enterprises on external markets favoured the growth of payment operations with foreign coun-teragents.


Dynamics of foreign borrowings (excluding treasury operations), USD million

Structure of foreign borrowings raised in 2010

USD 189,5 million

USD 128,4 million

21,6 %

63,8 %

14,6 %

Short-term tied borrowings

Untied borrowings

USD 559,0 million

Long-term tied borrowings

20102009200820072006

877

533431

290338


CREDIT RATINGS OF JSC BELAGROPROMBANK

[23]The bank’s financial position is rated by the interna-tional rating agencies Standard&Poor’s and Moody’s Investors Service. The bank is currently assigned one of the highest credit ratings in the banking sector of Belarus. Ratings of JSC Belagroprombank as of January 1, 2011:

[PREDICTIONS OF FUTURE DISCOVERIES. 20TH CENTURY ISAAC ASIMOV]The robots theme was continued by the science-fiction writer Isaac Asimov famous for its work “Three laws of Robotics”. These laws are philosophical: a robot may not injure a human being or, through inac-tion, allow a human being to come to harm; a robot must obey orders given to it by human beings, except where such orders would conflict the First Law; a robot must protect its own existence as long as such protection does not conflict with the First or Second Law. At the same time, Asimov often endowed robots with the behaviour equivalent of the behaviour among human beings.

«В++»

«В»

«Negative»

В 2

Not Prime

В 1

Not Prime

Е+

«Stable»

Long-term foreign and local currency rating

Short-term foreign and local currency rating

Outlook

Foreign currency long-term

Foreign currency short-term

Local currency long-term

Local currency short-term

Bank financial strength rating

Outlook

by Standard &Poor’s

by Moody’s Investors Service

AUSTRIA

Raiffeisen Bank International AG, ViennaRaiffeisenlandesbank Oberösterreich AG, LinzUniCredit Bank Austria AG, ViennaVTB Bank (Austria) AG, Vienna

BELARUS

JSC ABSOLUTBANK, Minsk JSC BELROSBANK, MinskJSC Alfa-Bank, Minsk JSC Bank BBMB, MinskJSC VTB Bank (Belarus), MinskJSC BelSwissBank, MinskJSC BTA Bank, MinskJSC Delta Bank, Minsk JSC Eurobank, MinskJSC Credexbank, MinskJSC MTBank, Minsk JSC RRB-Bank, Minsk JSC SomBelBank, Minsk JSC Trustbank, Minsk JSC Zepter Bank, MinskJSC SB Belarusbank, Minsk JSC Bank Moscow-Minsk, MinskJSC Belvnesheconombank, Mink JSC Belgazprombank, Minsk JSC Belinvestbank, Minsk JSC BNB-Bank, Mink JSC BPS-Bank, Minsk JSC International Reserve Bank, MinskJSC Paritetbank, Minsk JSC Priorbank, Minsk

JSC Technobank, Minsk JSC Fransabank, MinskJSC HCBank, Mink

BELGIUM

BNP Paribas Fortis, BrusselsING Belgium SA/NV, BrusselsKBC Bank NV, Brussels

BULGARIA

Bulgarian Development Bank AD, SofiaRaiffeisenbank (Bulgaria) EAD, Sofia

GREAT BRITAIN

FBN Bank (UK) Ltd, LondonThe Royal Bank of Scotland Plc, LondonVTB Capital Plc, London

HUNGARY

Hungarian Export Import Bank Pte Ltd, BudapestK&H Bank Zrt., BudapestOTP Bank Plc., Budapest

GERMANY

BHF Bank AG, Frankfurt-am-MainCommerzbank AG, Frankfurt-am-MainDeutsche Bank AG, Frankfurt-am-MainDZ Bank AG, Frankfurt-am-Main


PARTNER BANKS OF JSC BELAGROPROMBANK

[25]

[PREDICTIONS OF FUTURE DISCOVERIES. 20TH CENTURY. GEORGE LUCAS]A famous fantastic saga “Star Wars” by George Lucas had a tremendous commercial success and showed the world the whole universe with its world structure, history and technical achievements.

RUSSIAN FEDERATION

JSC Investtradebank, MoscowJSC CB Intrustbank, MoscowJSC CB NOVIKOMBANK, MoscowZAO UniCredit Bank, MoscowJSC Eximbank of Russia, MoscowCB EUROTRUST (CJSC), MoscowCB UkrSibbank Llc, MoscowJSC Sviaz-Bank, MoscowJSC Alfa-Bank, MoscowJSC VTB Bank, MoscowJSC Bank of Moscow, MoscowJSC Russian regional development bank,

MoscowJSC NOMOS-BANK, MoscowJSC OTP Bank, MoscowJSC Petersburg Social Commercial Bank,

St.PetersburgJSC First Republic Bank, MoscowJSC Promsvyazbank, MoscowJSC Russian Agricultural Bank, MoscowJSC URALSIB, MoscowJSC Bank of Khanty-Mansiysk, Khanty-MansiyskJSC Sberbank of Russia, Moscow

SERBIA

Agricultural Bank Agrobanka AD Beograd, Belgrad

USA

Citigroup Inc., New YorkDeutsche Bank Trust Company Americas, New YorkStandard Chartered Bank, New York Branch, New York

TAJIKISTAN

JSC Agroinvestbank, Dushanbe

TURKEY

Yapi Ve Kredi Bankasi AS, Istanbul

UKRAINE

JSC Ukreximbank, KievJSC CB Nadra Bank, KievJSC VTB Bank (Ukraine), KievJSC CB Privatbank, Dnepropetrovsk

FINLAND

Nordea Bank Finland Plc, HelsinkiPohjola bank Plc, Helsinki

FRANCE

BNP Paribas SA, ParisSociete Generale, ParisVTB Bank (France) SA, Paris

CZECH REPUBLIC

Ceska exportni banka, a.s., PragueCeskoslovenska Obchodni banka a.s., PragueCeska Sporitelna a.s., PragueUnicredit Bank CZ, Prague

SWITZERLAND

Banque de Commerce et de Placements SA, ZurichBNP Paribas (Suisse) SA, GenevaCredit Suisse AG, Zurich UBS AG, ZurichZuercher Kantonalbank, Zurich

JAPAN

Sumitomo Mitsui Banking Corporation, Tokyo




[27][26]

GERMANY

KBC Bank Deutschland AG, BremenKreissparkasse Esslingen-Nuertingen, EsslingenLandesbank Berlin AG, BerlinLandesbank Baden-Wuerttemberg, StuttgartLandesbank Hessen-Thueringen Girozentrale, Frankfurt-am-MainUniCredit Bank AG, MunichVTB Bank (Deutschland) AG, Frankfurt-am-MainWGZ Bank AG, Dusseldorf

DENMARK

Danske Bank AS, Copenhagen

ISRAEL

Bank Leumi le-Israel BM, Tel Aviv

ITALY

Banca Antonveneta SpA, PadovaBanca Monte dei Paschi di Siena SpA, SienaBanca Popolare di Vicenza ScpA, VicenzaBanco Popolare Soc Coop, VeronaIntesa Sanpaolo SpA, MilanUniCredit SpA, MilanUnione di Banche Italiane ScpA, Bergamo

KAZAKHSTAN

JSC BTA Bank, AlmatyJSC Kazkommertsbank, AlmatyJSC Nurbank, Almaty

LATVIA

JSC Baltic International Bank, RigaJSC Rietumu Banka, RigaJSC Trasta Komercbanka, RigaAS Latvijas Krajbanka, Riga

CJSC GE Money Bank, Riga

LITHUANIA

AB DnB NORD Bankas, VilniusAB SEB Bankas, VilniusSwedbank AB, Vilnius

MALTA

FIMBank Plc, Sliema

NETHERLANDS

CreditEurope Bank N.V., AmsterdamING Bank N.V., AmsterdamRabobank Nederland, Utrecht

NORWAY

DnB NOR Bank ASA, Oslo

POLAND

Bank BGZ SA, WarsawBank Gospodarstwa Krajowego, WarsawBank Pekao SA, WarsawBRE Bank SA, WarsawKredyt Bank SA, WarsawRaiffeisen Bank Polska SA, Warsaw

SLOVAKIA

Eximbankа SR, BratislavaTatra Bankа a.s., BratislavaVseobecna uverova banka a.s., Bratislava

SLOVENIA

Nova Ljubljanska Banka d.d., Ljubljana



AUDITORS’ REPORT ON THE ACCOUNTING (FINANCIAL) STATEMENTS OF

JSC BELAGROPROMBANK

[29]

We have audited the accounting (financial) state-ments of the Joint-Stock Company Belagroprom-bank (hereinafter referred to as “The Bank”), comprising the balance sheet as of January 1, 2010, the profit and loss statement, statements of changes in funds and cash flow statements, and explanatory notes for the year 2010. Com-

parative information has been prepared on the basis of the accounting (financial) statements of the Bank for the year 2009 audited by another auditing company, which provided its audit opin-ion dated March 12, 2010 containing an un-doubtedly positive opinion on financial (account-ing) statements for the relevant period.

Management’s Responsibility for the Accounting (Financial) Statements The Bank’s management is responsible for the preparation and fair presentation of the account-ing (financial) statements in accordance with the legislation of the Republic of Belarus, as well as for an internal control system which, in its opin-ion, is relevant to the preparation of accounting (financial) statements that are free from material misstatements, whether due to error or fraud.

Auditors’ Responsibility

Our responsibility is to express an opinion on these accounting (financial) statements based on our audit, and to obtain evidence on the Bank’s compliance with secure functioning standards and the Bank’s internal control.

[PREDICTIONS OF FUTURE DISCOVERIES. 20TH CENTURY. SPACE TOURISM]The theme of space tourism got the attention of many science-fiction writers of the 20th century and, finally, the possibility of becoming a space tourist has become a reality.

To the shareholders of JSC Belagroprombank 3 Zhukov Ave, Minsk, Republic of Belarus, 220036JSC Belagroprombank is registered in the National Bank of the Republic of Belarus on 03.09.1991, registration number 20.Reference 1503-01


[31][30] We conducted our audit in accordance with the requirements of the legislation of the Republic of Belarus 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 rea-sonable assurance whether these financial (ac-counting) statements are free from any material misstatement.

An audit involves performing procedures to ob-tain audit evidence about the amounts and dis-closures in the accounting (financial) statements. The procedures selected depend on the audi-tor’s judgment, including the assessment of the risks of material misstatement of the accounting (financial) statements, whether due to fraud or er-ror. In making those risk assessments, the auditor considers internal control relevant to the prep-aration and fair presentation of the account-ing (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 account-ing estimates made by the Bank’s management,

as well as evaluating the overall presentation of the accounting (financial) statements.We believe that the audit evidence we have ob-tained is sufficient and appropriate to provide our audit opinion.

Audit opinion

In our opinion the accounting (financial) state-ments present fairly, in all material respects the financial position of the Joint-Stock Company Belagroprombank as of January 1, 2011, and its financial performance and cash flows for the year 2010 in accordance with the requirements of the legislation of the Republic of Belarus re-garding preparation of the accounting (financial) statements.

Opinion regarding other legislative requirements

Our responsibility is also to assess the calcula-tion methods and authenticity of information contained in the forms of prudential accounting, namely 2801 “Calculation of capital adequacy”, 2807 “Report on special provisions against po-tential losses on off-balance sheet assets and op-erations”, 2809 “Liquidity calculation”, prepared by the Bank and presented as of January 1, 2011.

The Bank’s management is responsible for the preparation of these forms of prudential account-ing. Our responsibility is to express an opinion on authenticity of these forms of prudential account-ing.

In our opinion, the abovementioned forms of prudential accounting as of January 1, 2011 are drawn up by the Joint-Stock Company Belagro-prombank 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 ¹ 172 (as amended).

During the audit we found out that from Decem-ber 22 to December 30, 2010 the Bank violated the standard minimum liquid assets/total assets of the Bank, as set by the National Bank of the Republic of Belarus. Other facts constituting non-compliance with secure functioning standards, as set by the National Bank of the Republic of Be-larus, were not found.

We found no facts of non-compliance of the Bank’s internal control with the nature and vol-

ume of the performed operations which could lead to material misstatement of the Bank’s ac-counting (financial) statements for the year 2010.

Vereshchagina Irina Vladimirovna Director

Aboisheva Anna MikhailovnaHead of Audit Group

Minsk, Republic of BelarusLimited Liability Company KPMG

Certificate of state registration issued by Minsk City Executive Committee pursuant to the deci-sion dated 10.02.2011, UNP 191434140



JSC BELAGROPROMBANK


JSC BELAGROPROMBANK

¹ Description Index Explanatory notes 2010 2009

1 2 3 4 5 6

1 ASSETS

2 Cash assets 1101 9,10 364 892,2 282 248,6

3 Precious metals and precious stones 1102 9,11 2 641,7 2 465,6

4 Due from the National Bank 1103 12 2 569 961,1 109 600,5

5 Due from banks 1104 13 345 453,8 83 554,7

6 Securities 1105 14,53 1 468 956,8 472 872,0

7 Loans to customers 1106 9,15,53 24 418 591,0 18 054 699,2

8 Derivative financial assets 1107 9,16 9 035,3 15 245,5

9 Long-term financial investments 1108 17 336 432,1 128 530,4

10 Fixed assets and intengible assets 1109 9,18,53 604 395,6 484 238,6

11 Assets intended for sale 1110 9,19 2 130,1 2 149,4

12 Other assets 1111 9,20 111 092,5 64 925,5

13 TOTAL assets 11 9 30 233 582,2 19 700 530,0

14 LIABILITIES

15 Due to the National Bank 1201 21 5 594 743,6 2 554 477,1

16 Due to banks 1202 22 4 187 679,9 3 658 411,1

17 Due to customers 1203 23,53 11 847 489,6 8 563 312,4

18 Securities issued by the bank 1204 24,53 2 496 766,7 194 308,4

19 Derivative financial liabilities 1205 9,25 4,5 33,9

20 Other liabilities 1206 9,26,53 111 371,3 180 245,3

21 TOTAL liabilities 120 9 24 238 055,6 15 150 788,2

22 CAPITAL

23 Authorized fund 1211 27 5 003 635,0 3 878 635,0

24 Share premium 1212 - -

25 Reserve fund 1213 28 200 189,9 85 500,1

26 Balance sheet items re-evaluation fund 1214 29 317 199,8 241 256,3

27 Retained profit 1215 30 474 501,9 344 350,4

28 TOTAL capital 121 5 995 526,6 4 549 741,8

29 TOTAL liabilities and capital 12 9 30 233 582,2 19 700 530,0


BALANCE SHEET

[33]

Balance sheet as of january 1, 2011(BYR, million)

[PREDICTIONS OF FUTURE DISCOVERIES. 20TH-21ST CENTURIES. COLONIZATION OF MARS]The Martian Chronicles by the science-fiction writer Ray Bradbury was the first work that made him famous. This work is a collection of stories united by one theme– the history of colonization of Mars by humans. Pilotless flights to Mars and scientific developments related to human flights to the Red Planet evidence that the theme raised by Ray Bradbury, could be a reality.


PROFIT & LOSS STATEMENT.FINANCIAL STATEMENTS PREPARED IN

ACCORDANCE WITH IFRS

[35]

[PREDICTIONS OF FUTURE DISCOVERIES. 21ST CENTURY. CITY DESIGN]Cities of the Future is a science fiction that is gradu-ally penetrating into our lives. The borders between the landscape and buildings, interior and exterior, technology and ecology are being erased. The Dutch designer Koen Olthius projected floating cities which could become a reality in the near future.

PROFIT & LOSS STATEMENT 2010

¹ Description Index Explanatory notes 2010 2009

1 2 3 4 5 6

1 Interest income 2011 33,53 2 690 645,8 2 165 374,2

2 Interest exoenses 2012 33,53 1 516 496,2 1 444 004,9

3 Net interest income 201 33 1 174 149,6 721 369,3

4 Commission income 2021 34,53 299 362,2 235 433,7

5 Commission expenses 2022 34,53 57 506,8 34 526,9

6 Net commission income 202 34 241 855,4 200 906,8

7 Net income from transactions with precious metals and precious stones 203 32,35 812,1 623,7

8 Net income from transactions with securities 204 36,53 (6 686,3) (378,8)

9 Net income from foreign currency transactions 205 37,53 147 649,5 (109 873,6)

10 Net income from transactions with derivative financial instruments 206 32,38 (41 919,1) 164 285,7

11 Net transfers to reserves 207 32,39,53 865 326,2 376 125,9

12 Other income 208 40,53 210 559,5 51 219,8

13 Operational expenses 209 32,41,53 544 642,4 401 612,9

14 Other expenses 210 42,53 52 073,0 39 949,0

15 Profit (loss) before tax 211 43 264 379,1 210 465,1

16 Income tax 212 44 10 996,6 80 911,1

17 PROFIT (LOSS) 2 31 253 382,5 129 554,0

Basic earnings per ordinary share (in roubles) 45 125,92 67,46

Deluted earnings per ordinary share 46 - -

(BYR, million)

The financial statements of JSC Belagroprombank for the year 2010 prepared in accordance with the International Accounting Standards and Independent Auditors’ Report of KPMG LLC are available on the bank’s website www.belapb.by

[THE BANK OF FUTURE] The future has come, and JSC Belagroprombank knows it better than anyone else. Every hour, every minute and every second takes us to the new and different future. We live in the future world. We apply the most modern technologies in banking services to make every coming day more successful and exciting. Together we will create the future we can be proud of.


2011 BUSINESS OBJECTIVES

[37]In 2011 the bank plans to maintain the achieved pace of growth of key financials and conse-quently to retain and strengthen its positions across major segments of the financial market of the Republic of Belarus.

We intend to significantly improve and expand our retail banking products offering, and we will also look for opportunities to market the services aimed at target groups of individual customers. Furthermore, we will particularly focus on tech-nology improvements and reducing waiting time for our retail customers, prioritizing loan products.

When shaping the terms of service and concepts of promotion of retail banking products, the bank will put more emphasis on the assessment results for customer satisfaction with product of-ferings, as well as market research in the area of consumer demand for financial services. Further-more, the bank expects to expand the scale of the management quality system in retail banking.

To enhance access to services for individual cli-ents in 2011, we will further expand our branch network across the country and increase the number of terminals servicing bank plastic cards.

The bank will consistently follow the segmenta-tion policy in optimizing interaction with corpo-rate customers.

Personal managers will be given a greater role in servicing the most important customers. In this regard, we plan to draw enhanced attention to the proficiency level of our personnel responsible for relations with large enterprises and organiza-tions, the criteria for assessing personnel work efficiency, and introduction of the motivation sys-tem.

The bank plans to put forth more efforts to pro-vide financial support for small and medium busi-nesses. To this aim, we will introduce a special range of loan products for this customer group. Furthermore, the bank intends to join the small business finance projects initiated by the Euro-pean Bank for Reconstruction and Development.

The key target in the development of interna-tional cooperation will be raising foreign bor-rowing into the country’s economy. The bank in-tends to fully satisfy the demand of its corporate customers by raising foreign borrowings for the financing of foreign trade projects. Provided the macroeconomic situation looks stable and the climate in the world financial markets is favour-able, the bank will consider raising untied credit facilities.

ANNUAL REPORT report_english_2010_1207.pdf · par in his novel «El anacronópete» (neologism:...

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