Transcript Заголовок слайда отсутствует

CLOSED JOINT-STOCK COMPANY
INTERNATIONAL
JOINT-STOCK
BANK
The annual report
2009
General information
International Joint-Stock Bank (hereinafter referred to as the Bank or IJS
BANK) was founded as closed joint-stock company, the Shareholders’
agreement was signed on May 12, 1992. The credit institution was registered in
the Central Bank of the Russian Federation on August 04, 1992 under No.
1987. The latest edition of the Articles of association of the company was
the General Shareholders' Meeting on February 27, 2003,
approved by
protocol No. 1, the latest amendments to the Articles of association were
introduced by the General Shareholders' Meeting on July 04, 2008, protocol
No. 2. The State registration of the credit institution was recorded in the Unified
State Register of Legal Entities on August 21, 2002, PSRN 1027739097165.
TIN 7703025925, KPP code 774401001. The Bank has been a participant of the
deposit obligatory insurance system since November 18, 2004.
The Bank operates on the basis of:
1. General License No. 1987 dated September 09, 2003 entitling to
perform the following types of operations in rubles and foreign currency:
- attraction of monetary funds of physical persons and juridical persons to
deposits;
- placement of the attracted monetary funds of physical persons and legal entities
on its behalf and at its expense;
- opening and keeping of bank accounts for physical persons and legal entities;
- payments settlement by order of physical persons and legal entities, including
authorized correspondent banks and foreign banks, on their bank accounts;
- cash collection and cash services for physical persons and legal entities;
- sale and purchase of foreign currency in cash and cashless forms;
- issuance of bank guarantees;
- monetary funds transfers by order of physical persons without opening bank
accounts.
2. License No. 1987 dated September 09, 2003 entitling to perform the
following kinds of transactions:
- deposition and placement of precious metals;
-other transactions with precious metals.
3. License of a professional participant in the securities market:
- No. 077-04147-000100 to conduct depositary activities dated December 20,
2000;
- No. 077-04006-100000 to conduct broker activities dated December 21, 2000;
- No. 077-04054-010000 to conduct dealer activities dated December 21, 2000;
- No. 077-04096-001000 to conduct activities in securities management dated
December 21, 2000;
4. License of a stock exchange broker No. 1442 dated September 22, 2009
to make futures and option deals in the stock exchange trading, with no
restriction on the period of validity.
The authorized capital was formed in the amount of 300 mln. rubles and
divided into 30 mln. shares of nominal value of 10 rubles each, including
29, 980, 000 ordinary shares, 20, 000 preference shares. IJS BANK consistently
demonstrates stable growth rates. The Bank strengthens its positions in all
financial market segments, introduces additional products and services,
develops new directions of activity. The conducted by the Bank conservative
economic policy, carefully designed risk control system, balanced development
strategy – have helped the Bank to resist negative economic factors in the postcrisis period, made it possible to keep the progressive movement forward.
In comparison with the year 2008, total assets increased 45% and amounted
to 6, 836.31 mln. rubles on the basis of the results of the year 2009. Equity
(owned capital) increased 63 % per year and amounted to 1,159.30 mln. rubles.
The Bank maintains stable profitability indices: profit after tax equaled to 92,440
mln. rubles.
The key performance indicators of the Bank are Return on Assets and
Return on equity (owned capital):
Return on Assets
(%)
Return on equity
(%)
1.43%
9.71%
Methodology for indicator calculation:
The Return on Assets (ROA) is calculated according to the methodology accepted by
the Bank, as ratio of net profits to average assets for the period.
Return on equity (ROE) is calculated according to the methodology accepted by the
Bank, as ratio of net profits to average equity for the period.
Information on Closed Joint-Stock Company “International Joint-Stock
Bank” is presented in electronic version of The Bankers’ Almanac. Information
on IJS BANK was regularly presented during the accounting year in the ratings of
the
following
agencies:
“RosBusinessConsulting”
(“RBC.Rating”
http://rating.rbc.ru), “Interfax-CEA” (www.kommersant.ru), “National Rating
Agency” (НРА http://ra-national.ru/), BANKIR.RU (http://bankir.ru/rating).
The best ratings of IJS BANK during the year 2009:
The 77th place in RBC rating “Top500 of profitable banks in the first half of
the
year
2009”
(http://rating.rbc.ru/articles/2009/08/27/32539960_tbl.shtml?2009/08/27/3253992
5).
As of January 1, 2010, IJS BANK takes:
the 146th place – in NRA rating “Largest banks as ranked by net profit size
as of January 1, 2010” (http://ra-national.ru/?page=p-4bb04dd0).
the 171th place - in NRA rating “Largest banks as ranked by capital size”,
(http://ra-national.ru/?page=p-4bb049d3).
the 230 th place – in the rating of banks in the ranking in terms of “Assets”
prepared by BANKIR.RU (http://bankir.ru/rating/1/2010/19).
Priority activities of the Bank. Development Strategy.
Ensuring stable growth, improving the quality of performance and
harmonious business development are in the basis of the Bank's strategic
orientation. Implementing the growth strategy IJS BANK focuses on sustainable
assets growth and increase in transaction volume. Following this direction the
Bank seeks to strengthen its position in the market, ensures stable profit and
capital increase, which creates conditions for further development.
Within the framework of its development strategy IJS BANK poses and
meets challenges of business diversification, building client and resource base,
development of new segments of work, introduction of advanced banking
technologies and the Bank product-line expansion. IJS BANK is striving to
become a reliable business partner for its clients that is able to provide broad
support in financial services and ensures a decent level of service to everyone
regardless of range of activity and exacting demands.
Individual approach, mutual trust and respect of client interests are in the
basis of IJS BANK clientele policy. In 2009, work with clients was built as
before with regard to practical requirements and monitoring of constantly
changing situation on the Russian banking and financial markets. The retention
of the existing customer base and the service quality increase were ones of the
major objectives in 2009. In post-crisis conditions, in the formation of the
clientele policy the Bank has paid particular attention to the necessity to
maintain the liquidity and financial stability at the appropriate level.
Businesses in different industries and service sectors as well as
individual entrepreneurs and physical persons are among the Bank’s
clients. In the preceding year public and private entities of most
important branches of economy were the basis of the Bank client base,
including the following:
 machine building enterprises
 co-operative associations of prospectors
 insurance companies
 precious stones and metals wholesale enterprises
 construction companies
 enterprises engaging in metals reprocessing
 developer and real estate companies
 companies for recreation and entertainment organization
 investment financial companies
 publishing and printing companies
 employment and recruitment agencies
 law firms
 leasing companies

trading companies
The client base was expanded through attraction of leasing and trading
companies, noncommercial organizations performing functions of self-regulating
organizations in town-planning sector.
In comparison with the year 2008, balances in clients' ruble accounts have
increased by 128%. The number of accounts opened to clients-legal entities in
2009 increased by 55 % in comparison with the year 2008.
Legal entities' deposits in rubles amounted to 1, 607, 400 thous. rubles (10.5
% increase), in dollars – 69, 862 thous. US dollars (18.5% increase). A number
of new deposits in rubles and foreign currency were developed for physical
persons; three new deposits for physical persons were introduced during the
accounting year. The volume of retail deposits in foreign currency increased by
30 % in 2009.
New clients served within payroll card programs were acquired. In order to
provide additional security features to be used for servicing via Internet banking,
smart cards and USB-devices have become available to clients. Overdraft
facilities were introduced as an additional service provided to the clients within
card service, an additional module was implemented in the working automated
banking system to maintain accounting for the specified transactions.
The “Migom” transfer system was added to the list of transfer systems
available to the Bank clients for transfers without banking account opening –
“Contact”, “Blizko”.
During the year of 2009, the Bank has been providing safe deposit
services for storage of valuables, settlement of real estate purchase and sales
transactions and other transactions on financial contracts in a client-friendly
form.
The Bank Client Policy is traditionally based upon information
openness, transparency of financial statements, desire to provide proper quality
of corporate governance. This promotes customers’ and partners’ confidence in
the Bank, contributes to further strengthening of its goodwill in Russian and
foreign business circles.
The main direction of the Bank's activity is the support for clients’
foreign economic activity. Thus far implemented methods of cash and settlement
services and international settlements, including remote account management
systems, allow the Bank to perform clients’ payments carrying out transfers of
any urgency and in any currency with minimum cost and with a high degree of
reliability. Using the international correspondents network the Bank successfully
settles export-import contracts. Customers make payments both using the
traditional currencies USD, EUR and JPY, GBP, CHF, SEK, AUD. The Bank
maintains an indirect membership in the leading clearing systems of USA and
Europe. IJS BANK is one of active users of BESP system of real-time payments
in rubles.
Liabilities
ow ned
c a p ita l;
2 0 .0 3 %
o th e r
lia b ilitie s ;
3 .0 4 %
fund s of
c re d it
in s titu tio n s ;
1 2 .3 1 %
c lie n ts ' f u n d s ;
6 4 .6 1 %
The major part of the Bank’s liabilities was formed due to long-term
clients’ funds of the Bank. In 2009 the increment of long-term liabilities
amounted to 18.2 %. The Bank constantly pursues the policy of capital
strengthening and consequently the owned capital of the Bank equals to 20.03%
in the liabilities structure. In 2009 the growth of capital as part of liabilities
amounted to 654 mln. rubles. The main part of the increase is connected with
the recovery of securities held in the portfolio available for sale.
Assets
other assets;
3.55%
fixed assets;
4.51%
monetary funds;
0.57%
funds in the
Central Bank;
2.16%
funds in credit
institutions;
4.71%
investments in
securities;
24.15%
credits; 60.35%
In 2009 the Bank continued the expansion of its credit portfolio, its volume
reached 60.35% of all assets.
Investments in securities make one-fourth of the assets of IJS BANK. The
securities portfolio was formed on the basis of the principles of sound liquidity
and profitability.
In 2009 the Bank took measures for further improvement of the risk
management system connected with credit operations. The work on improving
the quality of credit portfolio was carried out, the share of truobled credits
decreased three times. Individual approach to each project and borrower,
thorough analysis of technical-and-economic assessment of credited projects and
continuous monitoring of granted credits allow the Bank to promptly control
arising credit risks.
The main part of the granted credits has liquid security. As of January 01,
2010, the total credit portfolio of the Bank fully covered loan indebtedness
significantly limiting the possibility of financial losses in credit operations.
As of January 01, 2010 the volume of credit portfolio increased by 21.5%
(credits to physical persons and legal entities) as compared with January 01,
2009 and amounted to 3, 951, 287.41 thous. rubles while credit risk decreased
from 18 % reserve for possible losses as of 01.01.09 to 13 % reserve as of
01.01.10 through quality improvement of granted credits and security in
accordance with the requirements imposed by the Central Bank to the reserves
level.
In 2009 the Bank continued the work on crediting of investment
companies. Furthermore, the proportion of borrowers of this sector in total credit
portfolio of the Bank decreased by 22% and as of the end of the year amounted
to 38.55% of total granted credits, which reflected general trends in real estate
market over the specified period.
The share of credits to trading companies significantly increased and
amounted to 31.48 % (for the year 2009, the growth of this indicator amounted
to 29.38%). Companies engaged in trading of construction materials, alcoholic
products, jewelry, etc. are among our clients.
The credit portfolio of the Bank for the year 2009
trading companies
31.48%
portfolio in arrears
1.60%
physical persons
0.96%
investment portfolio
38.55%
machine building and
other enterprises
4.72%
gold mining
4.59%
leasing companies
12.87%
reprocessing of secondary
raw materials
5.23%
Due to the fact that the risk of giving credits to leasing companies is
considerably reduced by means of insurance of the subject of pledge and
hedging of repayment risks between lessors – lenders and their lessees, in 2009
IJS BANK resumed lending to leasing companies. By the end of 2009 the share
of such credits equaled to 12.87 % (the growth of this indicator amounted to
1.73% for the year 2009). In their turn, the Bank specialists paid a special
attention to the creation of flexible lease payments schedule considering
individual business requirements to the maximum.
As in the previous years, the Bank credited real sector of economy machine-building, printing plants, etc. By the end of 2009 the share of such
credits equaled to 4.72% (despite the relative decrease in this indicator by 0.56%
for the year 2009 the increase in absolute value in the credit portfolio structure
equaled to 10.7 %).
In 2009 the Bank resumed active cooperation with gold-mining artels. The
share of such credits in the Bank’s portfolio equaled to 4.59% by the end of
2009.
Average profitability of credit transactions including earned interest for
2009 equaled to 14.44% per annum.
Despite the crisis phenomena in the world economy which caused a sharp
decline of market indexes, the Bank continued conducting transactions in securities
market. The volume of securities portfolio as of 01.01.10 equaled to 2, 066, 995.00
thous. rubles. Furthermore, the portfolio diversification was carried out – extension
of deposits to debt financial instruments with fixed interest income of the Russian
Federation (external bond loans), of legal entities-residents nominated in rubles, and
of legal entities-non-residents nominated in foreign currency and circulating in
European trading floors (total amount of deposits equaled to 799, 894.69 thous. rubles
increased by 540,851.92 thous. rubles in comparison with 01.01.09). The
diversification is carried out using the funds received from the sale of low-profit bills
of credit institutions as well as of fractional share of the trading porfolio and portfolio
for resale the market prices of which exceeded the acquisition cost.
The volume of investments in securities, mln. rubles
1 456
1 445
1 600
1 369
1 400
1 322
1 200
1 215
1 000
800
600
400
698
526
254
807
493
200
December 08
March 09
equity instruments
June 09
debt instruments
September 09
December 09
During many years IJS BANK has been an active participant of the
interbank market. The availability of general cooperation agreements in the
market of interbank credits, as well as the considerable volume of unsecured
limits, including those from foreign partners, contribute to the effective
management of the current liquidity. In 2009 the Bank signed the General Credit
Agreement (secured by pledge (blocking) of securities) for the extension of the
Bank of Russia credits, earlier there was signed the General agreement on
conducting deposit operations in the currency of the Russian Federation using
the Reuters dealing system with credit institutions of the Moscow region.
The activity of the bank in the foreign currency market in 2009 in the
first turn was directed to the accomplishments of clients and correspondent
banks’ requests for purchase and sale of foreign currency based on granting the
most favourable exchange rates and settlements terms on transactions. The Bank
saved an active position in the internal conversion and currency markets.
In 2009, as in the previous years, the Bank paid much attention to the
optimization of the correspondent network the main directions of which were
efficiency improvement of existing correspondent accounts, decrease in
transaction costs and reduction of non-performing accounts. The following
leading financial institutions are foreign correspondents of the Bank: Deutsche
Bank Trust Company Americas, New York, USA; JP Morgan Chase Bank, New
York, USA; JP Morgan AG, Frankfurt am Main, Germany; Deutsche Bank AG,
Frankfurt am Main, Germany; VTB Bank (Deutschland) AG, Frankfurt am
Main, Germany; JPMorgan Chase Bank, London, UK; Russian Commercial
Bank Ltd., Zurich, Switzerland; Bank of Tokyo-Mitsubishi Ltd., Tokyo, Japan.
Well-functioning technologies make it possible to respond quickly to any
changes in the market, which is reflected in the regular revision of tariff and
interest rate policy. Differentiated approach to tariffs, selection of any
telecommunications system – SWIFT, telex, Internet Banking Systems, and
optimal conditions to settlement, including prolonged transaction day, provide
the possibility for individual approach to each of the Loro-correspondents. The
comprehensive service includes rendering of services for all possible directions
of cooperation: attraction and allocation of financial resources, payments
settlement, securities transactions, conversion and trade finance transactions.
Taking into account modern international tendencies and the increasing importance of
anti-money laundering and counter-terrorism financing in 2009, the Bank continued its indepth examination of the analysis of the potential and continuing partners. In particular,
regular meetings with financial institutions within the Know your Client program,
systematic questioning and analysis of financial accounting were carried out, business lines
were studied, moreover an active interaction among all the Bank departments was
performed, including methodical support providing a complex of measures for studying
and identification of credit institutions.
Continuous monitoring of changes in the economic situation in the internal and
international financial markets allowed the Bank to manage its financial flow effectively in
due time increasing or decreasing its presence in different market segments. Using modern
trading and information analysis systems, such as REUTERS, REUTERS DEALING
3000, BLOOMBERG, remote terminals QUIK, MICEX, as well as trading platforms HOT
SPOT, Alfa FX allowed the Bank specialists to respond to incoming market information in
due time.
In 2009, the principal items of income were interest income from provision
of funds as well as incomes from transactions with securities. The indicator of
net interest margin determined in accordance with the Instruction of the Bank of
Russia dated April 30, 2008 No. 2005-U “On assessment of banks economic
situation” amounted to 5.85% per annum.
INCOME
other; 0.23%
from exchange
transactions; 1.63%
commission income; 1.63%
dividents; 1.24%
% income from credit
institutions; 2.52%
from securities
transactions; 21.12%
% income from loans to the
Bank's clients; 71.63%
In 2009 the expense patterns did not undergo significant changes, the most
considerable proportion is still accounted for fees for clients’ funds. Personnel costs were
also included in operating expenses and amounted to 25.73%. Losses arising from
assignment of claims in respect of creduts made the major part of expenses. Expenses for
accumulation of reserves equaled to 4.25%. Total reserves generated by the Bank as of the
end of 2009 correspond to the actual quality of assets and amounted to 679.98 mln. rubles.
EXPENSES
taxes; 5.00%
on funds of credit
institutions;
1.70%
on clients' funds;
46.48%
operational
expenses;
41.33%
commission
expenses; 1.24%
generation of
reserves; 4.25%
Prospects for the Bank development
for the year 2010
The priority is given to the increasing the return from the existing client
base through the improvement of work with potential clients and further
development of business processes in the Bank. The key parameters will be the
following – client servicing rate, client satisfaction from cooperation with the
Bank, integrated client efficiency (group of clients), stability of client base.
On the basis of marketing analysis of the existing client base, IJS BANK
offers the effective set of services for each client category, with diversification of
interest rates, amount of fees and rates depending on the client preferences and
their planned effectiveness for the Bank:
- expanding the list of services offered to physical persons, improvement
and addition of the current services and service technology;
- involvement of new corporate clients with regular turnovers for
comprehensive cash management services;
- establishment of mutually beneficial relations with partners, determination
of clients’ needs in financial field by providing a wide range of services
corresponding to the international practice;
- development of individual servicing programs for different enterprises,
rendering of assistance in business development.
Priority areas are also as follows:
attraction of free cash to deposits;
settlement and cash services of corporate clients;
crediting of corporate clients;
crediting of small- and medium-size business;
work in securities market;
currency exchange transactions;
- physical persons’ transfers without opening an account.
The Bank will resume the work on optimization of the correspondent
network of the Bank, development of cooperation with Russian and foreign
banks, participation in banking events, including international ones, to extent
and strengthen mutual business contacts between banks by means of formal and
informal meetings in order to increase of the Bank recognition in financial
circles. Opening of correspondent accounts in new currencies, for example, in
Chinese yuans. A further automation of already existing and new areas of the
Bank activities is planned.
During 2010 the Bank plans to continue crediting development of
enterprises and organizations. Companies of small- and medium-size
business, enterprises of real sector of economy involved in production of
goods and services are planned to be priority areas of crediting.
The Bank will make efforts to increase the credit portfolio volume, with
simultaneous improvement of credit quality due to deep analysis and detailed
development of projects suggested by clients. Minimization of crediting risk
and maintenance of business income at an acceptable for the Bank development
level with simultaneous satisfaction of the Central Bank’s requirements by
standards.
In conditions of the current uncertainty it is possible to expect a
considerable increase in volatility in the financial markets in 2010. Under these
circumstances it seems reasonable to keep the existing structure of securities
portfolio at the beginning of the year and reduce the investment terms before a
constant decrease in the level of market volatility.
Report on declared dividend payments
on equity issues of the Bank
In accordance with the decision taken at the Annual General Meeting of
Shareholders, IJS BANK profit at the end of 2008 in the amount of 244.909 mln.
rubles was distributed as follows: accumulation fund – 240.011 mln. rubles,
charity – 4.898 mln. rubles.
As of the end of 2009, the sum allocated for charity amounted to 1.994 mln.
rubles.
IJS BANK risk management system
Constant monitoring and comprehensive assessment of various risks was
carried out in the previous year. The Bank performs monthly analysis of its proper
financial stability in accordance with the Instruction of the Bank of Russia dated
April 30, 2008 No. 2005-U “On assessment of banks economic situation”.
The Bank creates liquidity management system, main elements of which are
governed by the new “Policy of liquidity risk management in IJS BANK” adopted
in 2009.
The Bank is guided by the following principles regarding liquidity
management:
— precautionary principle;
— principle of conservative estimates in data analyzing and projection models
generation;
— principle of centralization, i.e. centralized liquidity management of the
Bank;
— principle of diversification, i.e. the tendency to diversify to the maximum
extent the flows influencing liquidity.
Besides daily calculation of obligatory liquidity requirements (on the basis
of the method of the Central Bank of the Russian Federation) the Bank performs
continuous analysis of perspective liquidity to ensure financial solvency of the
Bank within all horizon periods in combination with maximum effective use of
resources. In 2009 the Program of perspective liquidity modeling was further
developed, that has been functioning in the bank in various modifications since
2007. Now this is a unique Program complex designed for assessment of
perspective liquidity of the Bank on the basis of analysis of cash flows in
accordance with actual terms of assets disposal, repayment and claiming of
obligations. The Program complex encompasses stress-tests of liquidity risk
with the use of various scenarios of events related to market situation, status of
debtors, creditors and other circumstances influencing the Bank liquidity status.
The acting system of liquidity management facilitates the making of
informed and reasonable decisions on investing in long-term assets alongside
with minimization of liquidity risk.
The Bank liquidity requirements within 2009 were far from maximum
allowable values and were equal as of the end of the year:
Н2 criterion of the Bank quick liquidity – 81.6% (with the norm of at least
15%), Н3 criterion of the Bank current liquidity – 173.8% (with the norm of at
least 50%), Н4 criterion of the Bank long-term liquidity – 70,6% (with the norm
not exceeding 120%).
The requirement for capital adequacy as of the end of the year was 18.6%
(with the norm of 10%).
The previous year witnessed a significant shift of attention on improving
the system of the Bank operational risk management related to possible
deficiencies, failures in systems and procedures of management and control over
bank processes as well as system errors.
ABS DIASOFT 5 NT has been transferred to a new technological platform,
i.e. in order to ensure continuity and scalability of the Bank activity (2
independent servers located at a distance). Transition to a new version of ABS
DIASOFT 5 NT allowed to automate new legislative requirements entered in
force in 2009-2010. A new system of antivirus protection and protection of EPSinternet has been introduced as well as other measures on improving of
information safety in relation to implementation of the Directives of the Federal
Law No. 152-FL “On personal data”. Intrabank software has been developed to
ensure intraformal control over forms of reporting submitted to the Bank of
Russia. A new system of receiving of obligatory accounting of the Central Bank
of the Russian Federation – “Bank activity analysis” – has been introduced into
commercial operation.
The Bank employs the “Concept of Information security” designated to
protect information resources from different types of threats, internal and
external, intentional and unintentional, to ensure continuity of business activity
and to minimize damage due to failures in the system of information safety.
Indirect economic benefit of solving the problem of ensuring information safety
is significant decrease of level of material, moral, image and other types of
damage. Improvement of the “Concept of Information security” is carried out
in compliance with the requirements, instructions and recommendations of the
main legislative acts of the Russian Federation and regulatory and procedural
documents of the Russian Federation of FSTEC of Russia in the sphere of
protection of information, main existing international standards in the sphere of
information technologies security as well as requirements and orders of the
Central Bank of the Russian Federation.
In the course of performing activity in compliance with the Articles of
Association the Bank abides by the norms of the Code of Corporate Conduct
approved at the meeting of the Government of the Russian Federation dated
November 28, 2001, No. 49 inclusive of peculiarities of internal documents and
existing practice.
Auditing organization is approved for verifying the financial status of the
Bank every year during the annual meeting of shareholders. In 2009 the auditing
organization for the Bank was “AKONT” Auditing Company Ltd. auditing
annual financial statements of IJS BANK as well as auditing the Bank financial
accounting made in compliance with international standards. There is no
affiliation or any property interests (except for payment for auditing services)
between auditing organization and the Bank.