OREANDA-NEWS. April 01, 2010.  Russian Prime Minister V.V. Putin Conducts a Meeting of State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ Supervisory Board

As V.V. Putin said at the meeting that the Bank for Development was one of the most important participants in implementing the Government’s crisis management measures and made it possible to provide urgent assistance to the banking sector, the stock market and system-forming enterprises of the real economy. The Prime Minister also added that Vnesheconombank did its best to help its borrowers by extending balanced interest rates on credits, restructured former debts if required and acted guided by long-term objectives of Russia’s economic development.

V.V. Putin’s Opening Address

Esteemed Colleagues, today we’ll hear out Vnesheconombank’s report for 2009, approve its budget parameters for 2010 and consider a number of projects in which Vnesheconombank participates.

I’d like to say that in 2009, the Bank for Development was one of the most important participants in implementing the Russian Government’s crisis management measures, made it possible to provide urgent assistance to the banking sector, the stock market and system-forming enterprises of the real economy. The Bank’s employees performed this intensive work professionally. They carried out decisions efficiently and timely and provided the Government with considerable expert support.

Many measures carried out with the Bank’s assistance have already achieved their objectives and have been suspended and all the funds committed by the state have been returned in full. For example, VEB has already returned 175 billion rubles to the National Wealth Fund. The Bank used the funds to support the Russian securities market in the most difficult period in autumn of 2008, and in doing so it paid interest on them to the federal budget.

Additional incomes from these transactions in the amount of 54.7 billion rubles would be largely used to implement the plan that we announced under the affordable mortgage lending program.

The program aimed at refinancing Russian companies’ debts to foreign creditors was also carried out in accordance with the existing plans. I’d like to remind you that we had performed this work in order to prevent Russian companies’ strategic assets from being diverted to foreign financial institutions due to refinancing problems under the conditions of the global financial and economic crisis. Well, then, the borrowers have already returned 4 billion rubles to VEB out of more than 11 billion they had received.

In general, VEB is taking an active part in stabilizing the banking system. The total amount of subordinated loans extended by the Bank of Development to other credit institutions was 404 billion rubles. Thanks to these loans, commercial banks received additional resources for financing the real economy.

Moreover, Svyaz-Bank’s and Globex Bank’s solvency was restored. The banks were placed under VEB’s control when they were virtually in a state of bankruptcy. At present, Vnesheconombank’s specialists are implementing strategies of their development. Specifically, today we are going to be told about the choice of a partner bank for a new project aimed at establishing a Postal Bank on the basis of Svyaz-Bank jointly with the Post of Russia.

Vnesheconombank participated directly in the financial restructuring of a number of major companies such as the United Aircraft Building Corporation and the Amurmetall Plant. VEB contributed 21 billion rubles to the United Aircraft Building Corporation’s charter capital and became an owner of 11% of its shares. And in December of 2009, an Agreement was signed on financing the Amurmetall plant for an amount of 2.2 billion rubles. The first tranche of 400 million rubles has been already transferred.

And I’d like also to say that despite the additional workload associated with crisis management measures Vnesheconombank carried on undertaking its core activity as a Bank for Development.

The amount of newly extended credits to the real economy was 123 billion rubles. The Bank extended guarantees worth 34 billion rubles under the innovative products support program. In 2009, 40 billion rubles were committed to small and medium-sized enterprises.

VEB started to finance such meaningful projects as the reconstruction of the Koltsovo airport in Yekaterinburg, the construction of an export terminal for coal transportation in the port of Vanino in the Far East and the construction of the Urengoy Electric Power Station in the Tyumen region.

Vnesheconombank is taking an active part in financing Olympic facilities.

Another important point to mention is that Vnesheconombank did its best to help its borrowers by extending balanced interest rates on credits, restructuring former debts if required and acted guided by long-term objectives of Russia’s economic development.

In doing so, Vnesheconombank performed pretty well, formed sufficient significant reserves to maintain its financial sustainability. In 2009, the Bank’s net profit amounted to 31 billion rubles. This is quite comparable to our leading credit financial institutions such as, for example, Sberbank.

It’s evident that it’s high time today to boost activities related to post-crisis economic recovery and modernization to support innovations and high-technology exports.

Our today’s agenda includes a number of such issues. In particular, we have to approve the opening of a credit line to finance the construction the Ekibastuz Power Station’s third power unit.

I’d like to stress that VEB’s credit resources in the amount of 12 billion dollars would be used to purchase domestic power-engineering equipment and it means that we’ll provide the Russian machine-building complex with guaranteed orders.

Moreover, the implementation of this project would help to reintegrate the energy systems of Northern Kazakhstan and Russia’s Southern Siberia and create additional opportunities for these regions’ comprehensive development.

Our next investment project is aimed at constructing a polypropylene manufacturing complex in Tobolsk. This is a large-scale strategic complex influencing directly the future of our chemical industry by raising its technological level and expanding opportunities for deep processing of raw materials.

We’ll also discuss the strategy of Vnesheconombank’s participation in upgrading the Sheremetjevo Airport.

Let’s get started with our work.