june 200 8
DESCRIPTION
June 200 8. VAB Bank. Overview. Short name VAB Bank (formerly known as VABank) Established 2nd July 1992, Kyiv Member of VAB Group Auditor Ernst &Young Ratings Moody’s Local Currency Deposits: B2 Foreign Currency Deposits: B2 Outlook Stable Fitch Foreign Currency: - PowerPoint PPT PresentationTRANSCRIPT
1June 2008
2
VAB Bank. Overview
Short name VAB Bank (formerly known as VABank)
Established 2nd July 1992, Kyiv
Member of VAB Group
Auditor Ernst&Young
Ratings
□ Moody’s Local Currency Deposits: B2Foreign Currency Deposits:
B2Outlook Stable
□ Fitch Foreign Currency:Long-Term Issuer Default
Rating: B– Short-Term Rating: B
Outlook Stable
3
Kardan N.V.
90.4%
60%
48,8%
40%
Shareholders
MAKSIMOV FAMILY
48,8%
Kardan Financial Services B.V.
11%
TBIH Financial Services Group N.V.
80%
50/50 strategic partnership between international institutional investor and local business
Kardan N.V. (part of Kardan Group) is an international investment company based in the Netherlands with total assets of US$6.65 bn as of 2007YE and listing on Euronext Amsterdam and Tel-Aviv Stock Exchange
In December 2007 Israel Discount Bank purchased 11% of Kardan Financial Services B.V. It is envisaged that Discount Bank will provide KFS with over USD 300 million of credit facilities.
TBIF Financial Services is a subsidiary of Kardan N.V. focusing on retail and SME banking, consumer finance, leasing, mortgages and asset management.
Vienna Insurance Group (Wiener Stadtische) is the #1 insurer in Austria and #1foreign insurer in the CEE region as of YE2007
Currently operating in 20 countries, incl. in Ukraine where it is a partner in VAB insurance and pension business through TBIH Financial Services Group N.V.
Mr. Sergey Maksimov is a local entrepreneur and the main shareholder of the Bank since 1995 with excellent local market knowledge and proven track record
4
VAB Asset Management
VAB Re
VAB Life
VAB Insurance
VAB Pension
VAB Leasing
VAB Capital
VABExpress
VAB Bank
POWERFUL UMBRELLA BRANDCROSS-SELLING
ECONOMIES OF SCALE
VAB Group
VAB Express.Provision of consumer loans (est. 2006)
VAB Leasing.Provision of leasing services (est. 2005)
VAB Pension.Administration of private pension funds (est. 2004)
VAB Insurance.Provision of insurance services (est.2002)
VAB Life.Provision of life insurance services (est. 2004)
VAB Re.Provision of reinsurance services to insurance companies (est. 2004)
VAB Asset Management.Provision of asset management services (est. 2006)
VAB Capital.Professional activities in the capital market, including brokerage, dealing, underwriting and portfolio management services (est. 2006)
5
VAB Bank. Strategic Goals
To develop VAB as a full-service bank with strong franchise in retail and SME
To have strong distribution:
□ to strengthen front office (sales)
□ to grow the network to 250 branches and outlets by YE2010
□ to diversify sales channels
To continue to develop both the Bank's human resources and information technology systems
| in US$ millions | 2005 2006 2007 2008P
Assets 453 731 1 211 1 800
Loans to customers 244 515 911 1 450
Capital 64 101 142 200
Net profit 2.8 2.1 1.8 5
Key Financial Targets
P - planned
6
Sal
es P
oin
ts
| Number |Branches and ATMs
Distribution Network
Network coverage in all regional centers of Ukraine
Rebranding and new sales orientated concept introduced in 2006 ensuring competitive benefits for VAB Bank
□Facilitates cross-selling
□Cost and capital effectiveness
□Higher sales per square meter
1191
2000
7
Assets and Capital Dynamics
2007 capital growth was fueled by shareholders’ injection of almost US$20m and US$20m subordinated loan from FMO (The Netherlands)
Basel Total Capital Adequacy Ratio stood at 15% as of 31 Dec 2007
Registration of additional US$50m to the shareholders’ equity planned by the end of 1H2008
The shareholders are committed to maintain CAR at the level of minimum 12% and to participate in increases of capital up to US$300m by YE2009
Gro
wth
Dyn
amic
s
| in US$ millions |Assets, YE
Gro
wth
Dyn
amic
s
| in US$ millions |Total Capital, YE
+61%YoY +66%YoY +51%YoY +58%YoY
+40%YoY +41%YoY
P - planned
8
Gro
wth
Dyn
amic
s
| in US$ millions |Loan Portfolio, YE
Small and medium enterprises dominate in the loan portfolio and account for 60% of the total loans
VAB Bank’s share in the lending market stood at 1.2% as of YE2007
Share of loans to individuals grew from 20% as of YE2006 to 27% as of YE2007
Lending policy: conservative risk assessment, but fast decision making
Loan Portfolio
To
tal L
oan
Po
rtfo
lio
| YE 2007 |Breakdown by Customer Segments
+111%YoY +77%YoY +59%YoY
To
tal L
oan
Po
rtfo
lio
| YE 2007 |Portfolio by Industries
P – planned
SME 60%
9
Loan PortfolioL
oa
n L
os
s R
eser
ves
vs Im
pai
red
Lo
an
s | in US$ million |Asset Quality, YE
Co
nce
ntr
atio
n
|percent |Share of Top 10 Borrowers High quality of loan portfolio: share of impaired loans remains modest at 1.7% as of YE2007
Impaired loans are covered by loan loss reserves in the amount of USD 17.9 million
Corporate loans are 100% collateralized by property, equipment, raw materials, semi-finished or finished products, contractual rights, securities, deposit accounts or precious metals
Continuously decreasing concentration
Ove
rdu
e L
oan
s
|percent |Breakdown of Overdue Loans
10
Pri
vate
Cu
sto
mer
s
| in US$ millions |Loans to individuals, YE
+257%YoY +146%YoY
+100%YoY
Loan Portfolio
+92%YoY
Co
rpo
rate
Cu
sto
mer
s
| in US$ millions |Corporate Loans, YE
+61%YoY +44%YoY
Pri
vate
Cu
sto
mer
s
| YE 2007 |Portfolio by Products
Pri
vate
Cu
sto
mer
s
| percent |Loans Growth Rates vs Market in 2007
P – planned
11
Over 3 years52%
1-3 years37%
Other89%
1 year11%
2008 Gross Borrowings
Domestic Bonds 50
Syndicated Loans/ Bilateral Loans 60
Loans from IFIs 40
Funding from TBIF 100
Others 20
TOTAL 270
To
tal F
un
din
g
| percent |Funding Composition
2008
No
n-D
epo
sit
Fu
nd
ing
| percent |Maturity Composition
| in US$ millions |
Fu
nd
ing
| in US$ millions |Customer Deposit Portfolio
264
492
738
1030
+50%YoY +40%YoY +86%YoY
Funding
12
Amount: US$30,000,000
Tenor: 7 years
Facility Date: Dec 2006
Lenders
Bila
tera
l Lo
an
Funding. Capital Market Loans
Amount: US$51,000,000
Tenor: 1year
Facility Date: Apr 2007
Mandated Lead Arrangers
Syn
dic
ated
Lo
an
Amount: US$15,000,000
Tenor: 14 months
Facility Date: Feb 2006
Mandated Lead Arranger
Syn
dic
ated
Lo
an
Amount: US$10,000,000
Tenor: 11 months
Facility Date: Jun 2006
Mandated Lead Arranger
Syn
dic
ated
Lo
an Amount: US$20,000,000
Tenor: 10 years
Margin: LIBOR + 4.5%
Facility Date: Oct 2007
Lender
Su
bo
rdin
ated
Lo
an
13
Amount: US$125,000,000
Tenor: 3 years ▲
Coupon: 10.125%
Format: Reg S
Issue Date: June 2007
Lead Managers
Eu
rob
on
ds
Issu
e
“…Bookrunners’ comment: …In all the time I’ve been doing emerging markets bonds, I’ve not seen a book like this for a credit of this type…”
“…Reactions had been very positive, with investors impressed by both strong management team and the bank’s strategy…”
“…Spencer Maclean (Deutsche Bank) stressed the high participation rate of investment grade and crossover accounts in the book, in addition to the traditional high-yield and dedicated EM funds...”
Funding. Eurobonds Debut Issue
Inve
sto
r B
ase
| percent |Breakdown by Geography
Inve
sto
r B
ase
| percent |Breakdown by Investor Type
14
Current Ratings Rating Outlook
Long-Term IDR B- Stable
Short-Term B Stable
Individual D/E
Support 5
National Long-Term BBB- (ukr) Stable
VAB Bank cooperates with Moody’s and Fitch since 2003 and 2006 respectively
In May 2007 Fitch affirmed VAB Bank’s rating and outlook at B- (stable)
In June 2008 Moody's confirmed the bank’s B2 long-term local and foreign currency deposit and debt ratings and assigned the stable outlook
Current Ratings Rating Outlook
Bank Deposit Foreign Currency B2/NP Stable
Bank Deposit Local Currency B2/NP Stable
BFSR E+ Stable
National A1.ua
Credit Ratings
“…The bank’s further franchise expansion, accompanied by declining business concentrations, may put upward pressure on the ratings. Funding base diversification and a strengthening of liquidity should be also positive for the bank’s financial standing…“
“…The rating derives from the bank’s current market standing, relatively advanced for Ukrainian bank corporate governance and risk management practices and the expected strengthening of the
bank’s retail franchise following the execution of the strategy, supported by expansion of the branch network together with
enhancing the infrastructure and IT systems...”
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Strong, supportive, long-term strategic investor with sufficient financial resources and experience to ensure success
Top quality senior management team with extensive international experience
Strong and expanding branch network coverage
Unique customer service approach and well-developed brand. Brand awareness increased from18% in 2006 to 47% in 2007
High capitalization level with 15% Basel Capital Adequacy Ratio as of 31 Dec 2007 and shareholders’ commitment to increase capital further
International standard risk management systems with proven capability to manage rapid growth
High standards of corporate governance and transparency: ranking among Top-5 most transparent banks in Ukraine according to Standard & Poor's survey for the second consecutive year (recent survey in Dec 2007)
Summary
1604/21/23
5 Zoolohichna Street, Kyiv 04119, Ukraine
Tel.: (38 044) 481-33-48
Fax: (38 044) 481-33-49
e-mail: [email protected]
http://www.vab.ua
http://www.vabbank.com.ua
Telex: 631048 VABNK UX
S.W.I.F.T. BIC: VABA UA UK
REUTERS: VABK
Contact Details
Mr. Lukas Tursa Deputy Chairman of the Management Board
Head of Treasury and Financial InstitutionsTel.: +38 044 492 39 80e-mail: [email protected]
Correspondent Banking & International Borrowings
Mr. Viktor DumaHead of Financial Institutions & International FinancingTel.: +38 044 481 33 48e-mail: [email protected]
Ms. Natalia BastunCorrespondent BankingTel.: +38 044 481 33 47e-mail: [email protected]
Money & FX Market
Ms. Natalia ShishatskaHead of Money & Forex MarketsTel.: +38 044 490 06 36e-mail: [email protected]
Mr. Oleksiy TihiyHead of DealingTel.: +38 044 481 33 53e-mail: [email protected]
Documentary Business
Ms. Tetyana Synitsyna Head of Documentary BusinessTel.: +38 044 490 06 34e-mail: [email protected]
Ms. Iryna DrygaloDeputy Head of Documentary BusinessTel.: +38 044 490 06 34e-mail: [email protected]
Investment Banking
Ms. Dorina ZilbermintsInvestment BusinessTel: +38 044 481 33 55E-mail: [email protected]