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Sustainability Report 2013


Chairman’s Statement

Honorable colleagues and partners!

I have the honor to present for your kind attention and consideration the VEB Group Sustainability Report 2013. Actually, this is our 5th non-financial report It covers a wide range of economic, environmental and social aspects of Vnesheconombank and the Group’s activities that are of immediate concern.


For us, as an institution for development, preparation of non-financial reporting is a milestone initiative since the Bank’s overall activities are primarily socially-oriented. The considerable scale of tasks the Bank is mandated to accomplish and the tangible impact on the quality of life in the country motivate its special responsibilities and commitments. That is why we consider it important to raise public awareness of our progress in resolving the tasks of national importance delegated to the Bank.

The results achieved by Vnesheconombank in 2013 make us proud of the work accomplished. Most of the targets set by the Development Strategy were significantly exceeded. That primarily concerns the amount of the Bank for Development’s loan portfolio that is running at RUB 974.6 bn versus RUB 850 bn planned for the end of 2015. Moreover, the amount of support for Russian exports, which is another key performance indicator, exceeded RUB 150 bn against the target of RUB 88.

Behind these fingers are dozens of actual projects that were financed by Vnesheconombank. A third of them are of innovative category. The Bank’s investments in advanced high-tech projects, which are of strategic importance for Russia, serve as a strong leverage in driving forward modernization of the national economy. These investments also significantly contribute to creating new high skilled jobs and generating increased tax revenues to the budgets of all levels.

To illustrate, these are only several of Vnesheconombank’s largest projects launched in 2013. The “Tobolsk-Polimer” petrochemical facility was put into operation. The project of such scale and scope is actually unique for Russia. Moreover, the petrochemical facility is already among the world’s top propylene producers. No less important is the environmental security of the complex that is ensured through the use of advanced production technologies.

Our Olympic projects deserve special attention. After the Olympic Games Sochi 2014 such Olympic venues as the Rosa Hutor mountain ski resort, the “Mountain Carousel” sports and tourist complex and other facilities of tourist, transport and energy infrastructure became globally famous. We are proud that Vnesheconombank actively participated in the construction of 20 facilities required for the 2014 Olympic Games.

Now, our task is to identify, in tandem with other investors, ministries and regional authorities, ways to make the best use of the Olympic facilities that would allow us to recoup the construction costs, give a fresh impetus to the development of the region and enhance the prestige of Sochi as a world-class resort.

Speaking about our achievements, we should also mention the success of the companies that comprise the VEB Group. In fact, the activities of subsidiary banks, funds, companies, development corporations and agencies are closely aligned with resolving the tasks set for the parent company. Vnesheconombank’s priorities include removing infrastructure constraints, facilitating modernization and developing a non-raw material dependent economy, encouraging innovation and exports. The VEB Group encompasses entities that engage in a variety of business lines. These include large commercial banks in Russia, Ukraine and the Republic of Belarus, the leading leasing, innovative and engineering companies, funds and corporations for regional development and the Export Insurance Agency of Russia (EXIAR). Such a combination of instruments allows for more efficient use of the Group’s financial resources. Productive cooperation between the subsidiary companies enables Vnesheconombank to develop complex mutually complementary systems of financial support for major business activity lines.

The Kaluga cluster serves as an impressive demonstration of such a synergy effect. Admittedly, 2013 was a landmark year in delivering the action plan of the region’s integrated development. It should be noted that implementation of the plan not only meant investment in large-scale high-tech projects in the region. SME Bank’s support gave a significant drive forward for SME development in Kaluga. Also, the Kaluga region witnessed an increased provision of leasing services rendered by VEB-Leasing, as well as other measures of economic stimulation of the region offered by VEB Group companies.

Today, the Kaluga region comes among the leading Russian regions in terms of the number of advanced businesses created and the amount of investment raised. The region also takes a clear lead in terms of labor productivity growth. The cluster of industrial parks, in financing of which Vnesheconombank actively engaged, has attracted and continues to attract many foreign investors. Thus far, about 30 large-scale industrial facilities have already been commissioned on the territories of the parks. That allowed for creating more than 16 thousand new jobs and helped generate more than RUB 50 bn worth of tax revenues by the parks’ residents. Such radical changes in the region’s economy and industrial potential secured a significant improvement in the quality of life for the people.

Developing the national system of complex support for industrial exports is another business line of the VEB Group. In this respect, impressive progress has also been made. The system was fully launched in 2013 benefiting from the use of all the Group’s mechanisms available. That primarily concerns Roseximbank and the EXIAR, as well as VEB-leasing. Such a complex approach was instrumental in financing export deliveries of Sukhoy Superjet 100 aircraft to Indonesia and Mexico.

For us, the interests of SMEs are also of immediate concern. It is a most socially important sector of the Russian economy. The VEB Group renders the sector significant support with the SME Bank playing the central role. The Bank directly engages in implementing the State Program of Financial Support for SMEs. Over the 7 years of the Bank’s participation in the Program, more than 60 thousand companies were financed. The overall amount of SME support exceeded RUB 390 bn.

Apart from that, 2013 saw the launch of another important SME stimulating mechanism — guarantee mechanism of support for medium-sized enterprises. The SME Bank acts as its operator just as well. The mechanism aims to support medium-sized businesses engaged in non-raw material and non-trading sectors. The use of the instrument will ensure extending up to RUB 80 bn worth of credits to medium-sized businesses.

It is worth noting that encouraging business activities both of big businesses and SMEs has always been a priority for us. In this context, it is in 2013 that Vnesheconombank for the first time arranged a national “Development Award”. High awards for outstanding achievements in implementing nationally important investment programs were instituted. The four prestigious awards included “The Best Infrastructure Project”, “The Best Industrial Project”, “The Best Project in Integrated Territorial Development” and “The Best SME Project”. The award ceremony was held in the course of the St. Petersburg International Economic Forum in the presence of the leaders of the country.

As to creating business friendly environment I would like to highlight Vnesheconombank’s engagement in international initiatives to secure sustainable development. Vnesheconombank has always sought to demonstrate high standards of responsible business conduct. We do not only underscore the standards importance by close adherence, but also seek to promote them in the Russian business community. In 2013, the Bank continued work along this particular line, primarily through engagement in the activities of the UN Global Compact, the Russian network of which is headed by A. Ivanov, Deputy Chairman-Member of the Board of Vnesheconombank.

For Vnesheconombank, subscribing to the UNEP Finance Initiative (the Bank was among the first to join the organization) was also a milestone event. Participation in the initiative is a logic move in the process of developing and maintaining mechanisms of responsible financing that Vnesheconombank applies in its lending and investment policies.

We recognize crucial importance of the concept of responsible financing, as well as other CSR mechanisms. Their consistent integration in our practices will facilitate effective fulfillment of the powers of the national institution for development.

We see our task as enhancing the quality of the Bank’s loan portfolio and increasing the share of projects designed to support innovation, protect environment and raise energy efficiency.

Today, our priorities include ensuring support for projects that tangibly contribute to developing the national economy, improving environment and enhancing the quality of life of the people. Hopefully, the entire team of the Bank’s professionals acting in tandem with public authorities, the business community and other Russian and foreign development institutions will be dedicated to achieving the goal.

Vladimir Dmitriev