Sbank Ar2002 Eng

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  • 8/4/2019 Sbank Ar2002 Eng


    Time is impassive and implacable. Time breaks up

    worlds, washes down civilizations their languages

    and odours, rhythm and motions. And only with an

    ancient Meissen cup in the hand you wonder at how

    correctly, not fussily it rests in your hand, and the

    Grandmas brilliants flow on your neck without with-

    drawing into their own beauty , but only to accentuate

    its curve. Piece-things. Things created by somebody

    for someone. Things not knowing dismal impersonal-

    ity of stamping. Things telling about worlds and civi-

    lizations more than historians surmises. Only things

    created for you are worth of a free man.

  • 8/4/2019 Sbank Ar2002 Eng


    Table of contents

    2 3

    Chairman Address 7

    Macroeconomic Situation in Russia in 2002 10

    Development of the Russian Banking System in 2002 13

    Main Results of Sudostroitelny Bank in 2002 16

    Financial Markets. Money Markets 22

    Securities 23

    Correspondent banking 25

    Client Policy 28

    Crediting 30

    Leasing 32

    Collection 33

    Plastic Cards 36

    Latest Technologies 37

    St.-Petersburg Branch 38

    Sponsorship 39

    Balance Sheet 42

  • 8/4/2019 Sbank Ar2002 Eng


    Carved facet of the cognac carafe

    sparkling with amber and ruby in glea

    of fair, and vine ordour of a ripe bun

    cut in times immemorial is turning yo

    head. The same way it was floating in t

    drawing-room of a snow-covered man

    200 years ago, - and muted voices of o

    cers with epaulets embroidered in go

    keep living in this ordour, and Heres

    Fatherland!" and "Heres to Ladies! y

    drink together.

    Piece-things. Cognac

  • 8/4/2019 Sbank Ar2002 Eng


    Dear Madams and Sirs!

    The year 2002 was very important for the development of Sudostroitelny Bank by the volume of assets

    and equity capital the Bank was ranked among 50 largest credit institutions of Russia, joined the elite of the

    national banking business.

    The new status of the Bank not only opens wide perspectives, but also imposes great responsibility.

    At the beginning of 90s the Bank development was not coordinated by a purposeful strategy the Bank tac-

    tics were aimed at making a good use of the moment and new market opportunities. Today the Bank is not in

    a position to afford it. We are now facing the task to adhere to an adjusted strategic line based on projected

    numerical parameters. In order to secure a stable competitive position, the growth rates of basic carrying

    amounts must exceed average indices in the banking sector. It is really very pleasant for me to inform that

    judging by the results of 2002 this program was successfully realized. The assets and equity capital of the

    Bank grew by 2.5 times.

    In many respects it was possible due to a new positioning of the Bank in the market Sudostroitelny Bank

    became an active participant of the interbank services market. As a result the number of LORO accounts in

    2002 doubled, and balances on those accounts increased by 4 times.

    The growing confidence of the clients and correspondent banks resulted in a successful issue of own bills

    of exchange with a maturity date of more than one year.

    The attraction of long-term resources and the increase in the volume of own funds provided a solid basis

    for the growth of the credit portfolio. As a result, by the end of the year the credit portfolio increased by

    almost 3 times.

    However, even the significant increase in the volume of crediting was not followed by the fundamental

    change of the Bank policy in this field. Satisfying to the maximum the needs of its clients, the Bank continued

    crediting the projects that corresponded with the requirement yield-reliability at the most.

    One of the most important results achieved by the Bank in 2002 was the extension of the services range

    and the introduction of the latest technologies. Meeting the requirements of the corporate clients the Bank

    was intensively developing leasing and factoring operations, salary projects with the use of VISA plasticcards, services on effecting customs payments via the customs card system, services on acquiring, and bro-

    kerage services in the securities market.

    An important place in the Bank client policy today occupies the work with private persons. In 2002 the

    Bank issued plastic cards VISA Gold, VISA Classic and VISA Electron, worked out new types of term deposits,

    became a correspondent of international money transfer system RIA Envia in Russia. In order to improve the

    customer service the Department of the customer relations development was created.

    The achieved results allow us to make plans for the future with confidence. In the coming year

    Sudostroitelny Bank is going to confirm and consolidate the status of a large universal credit institution. We

    will seek after further optimization of the existing business-processes, the reduction of risks, development

    and introduction of new products and services, which correspond to the requirements of the clients, as well as

    to the international standards of the banking service.

    In conclusion I would like to express to everyone our clients, partners, and employees my sincere

    appreciation for the trust and support. The joint efforts of our team allowed the Bank to take the present

    positions and to become the Bank you know today.

    Alexey Golubkov

    Chairman of the Board


    Chairman Address

  • 8/4/2019 Sbank Ar2002 Eng


    The world broken to pieces comes to life

    ordour and things. A Grandma will find

    faded rose in Clarissa and put it in

    Nadsons book, and a ray will slide on

    page dropped by tears, and new roses w

    blossom out in rosary, and sweet smell

    young roses will flow together with o

    books odour, girls dressed in muslin w

    become ladies clothed in silk and v

    vetAnd boys cried while rea

    Napoleon at St. Helen will put on m

    tary uniform and leave for war, but all th

    will be later, later Both Clarissa a

    Napoleon wont go to pieces, loose pag

    like pocket one-day books do and now

    the 21st century your daughter will op

    the heavy volume and find the Grandm

    rose there.

    Piece-things. Books

  • 8/4/2019 Sbank Ar2002 Eng


    According to the latest data on the volume of

    import provided by the Central Bank of Russia its

    growth stopped in the autumn at the rate of USD 5.4bn

    per month. Such development is usual for the autumn.

    One can assume that weakening of the ruble against

    the euro had a certain restraining impact on import.

    According to the Goskomstat the volume of import in

    2002 amounted to USD 62bn exceeding by 12% theresult of the previous year. It is c. 16.7% less than in the

    record year of 1997. At the same time the volume of

    import by the end of the year exceeded 70% of its crisis

    drop in 1998.

    The annual export surplus decreased, though not sig-

    nificantly. In the estimation of experts the export surplus

    decreased from USD 48bn to USD 46bn (or from USD

    45.7bn to USD 41.5bn as regards to the trade with non-CIS


    Judging by the international balance of payment,

    stability of the money market and financial system on the

    whole, one should not be anxious about the current for-

    eign trade situation since a high safety margin still exists.

    However one should take into account that the export

    dynamics is not stable enough to sustain sharp deteriora-

    tion of the external market situation, first of all in the

    energy resources markets, while the import is strongly

    supported by the outpacing growth of the domestic

    demand. This involves a potential risk of an export sur-

    plus decrease.

    In such situation the proper reaction of the authorities

    will be to follow a policy of real weakening of the ruble

    that will naturally ease the negative impact of the external

    shock. Tariff regulation and introducing import quotas on

    products of domestic manufacture which are most sensi-

    tive to external competition, will make the problem less

    acute to a certain extent.

    InflationThe annual increase in consumer prices amounted to

    15.1%. This result can be estimated in two ways. On the

    one hand, the increase in consumer prices in 2002 indicates

    the tendency of a slow annual inflation decrease. On the

    other hand, it means that the efforts to keep inflation

    within the expected limits of 14% in 2002 failed. The rise inprices for services contributed greatly to the annual infla-

    tion rate. Tariffs for services rendered to people grew by

    36.2% during the year, while the prices f or food increased

    by 11% (excluding fruit and vegetable products by

    8.5%), and the prices for non-food consumer goods rose

    by 10.9%.


    Macroeconomic Situation in Russia in 2002

    Analysis of the Russian economy in 2002In the last year the basic macroeconomic parameters

    fully corresponded to expectations. A 4% economic growth

    of all production indices which took place in 2002 had been

    forecasted a year ago by both the government and most

    part of independent experts. Such a high accuracy of fore-

    casts is an evidence of stability of the main economic

    processes. As before the production growth was determinedby external demand resulting from a favorable market situa-

    tion and by an outpacing growth of the domestic demand.

    The highest growth rates were demonstrated by the fuel

    industry, non-ferrous metallurgy and food industry.

    The analysis of the results of economic development

    during the past several years shows that the established

    mechanism of economic growth which is mainly based on

    the export-oriented manufacture of non-deep processing

    products does not have necessary elements for the fast

    qualitative improvement of the economy structure and for

    the raise of the economy effectiveness on the whole. Such

    economy can provide only moderate growth rates (3-5%)

    during the next few years and a slow forming of conditions

    for structural changes which will imply the increase in the

    share of high-level processing products. Quicker structural

    changes are also possible, but only as a result of recessions

    caused by shocks of external demand first of all by a

    slump in prices for mineral energy resources.

    ProductionThe GDP growth amounted to 4.3% as compared with

    the previous year. One should note that the main driver for

    the GDP growth was a higher growth rate of services, that

    resulted in the increase of their share in the GDP structure in

    basic prices from 54.8% in January-September 2001 to

    57.5% during the same period of 2002. This growth was

    mostly provided by the growth of market services share that

    increased from 46.4% to 48.4%.

    The significant growth of the services share indicates

    that the internal commodity production was not less impor-

    tant for the excessive demand satisfaction than the import

    increase. Thus the prospects of the beginning of 2003 look

    quite promising.

    The volume of industrial production increased by only

    0.6% in December 2002 as compared with the same periodof 2001. This is the lowest index for the last three and a half

    years. As for the industry, the December result is extremely

    low and indicates the negative break of the industrial pro-

    duction dynamic that took place in the autumn last year.

    Thus the annual increase of the industrial production

    amounted to 3.7%.

    InvestmentsThe increase of investments in fixed capital in 2002

    was similar to the one in 2001 with the exception of one

    important factor the previous year did not experience

    such a deep recession in January. The annual increase of

    investments amounted only to 3.2%. Such a low result

    was achieved exactly because of the January recession

    which is a record one for the last seven years and wascaused by the cancellation of investment privilege on

    income tax.

    Consumer demandThe development of the retail trade turnover was char-

    acterized in 2002, as well as in the previous year, by a

    steady positive growth that provided an average monthly

    increase of 0.8%. As a result the annual increase amount-

    ed to 9.2%.

    High growth rates of the retail trade turnover during

    the last 3 years (8.7% in 2000 and 10.7% in 2001) indicate

    the positive change of the consumer demand factor that

    provides stability for the production development. Besides,

    a rapid growth of the consumer demand establishes

    potential for the acceleration of an economic upturn.

    However this potential can be realized only if correspon-

    ding inducing measures of economic policy are taken,

    which will be aimed at supporting the internal producers in

    the competition with the import for consumer demand.

    Foreign tradeThe volume of export increased slightly in December

    and almost reached its historical maximum recorded in

    December 2000 (USD 10.1bn). However, eliminating the

    influence of the seasonal factor reveals that the export

    growth rate exceeded substantially the level reached 2

    years ago. The export volume in December exceeded

    USD 9.8bn; at the end of 2000 it was equal to around

    USD 9bn.

    Due to the rapid growth in 2002 comparable by its

    rates to the rehabilitation upturn period in 1999, the export

    was able to totally catch up with the growth as compared

    with 2001.

    The annual volume of export exceeded not only the

    result of 2001 but also the record result of 2000 USD105.0bn. According to the State Committee of Statistics

    (Goskomstat) the volume of export in 2002 amounted to

    USD 107.2bn that is 4% higher as compared to the previ-

    ous year. It is also important to mention that the share of

    non-CIS countries in the export structure keeps up steadily

    near the mark of 85%.


    Income of the population andunemployment

    Real disposal income of the population grew in 2002 by

    9% as compared with 2001. Thus for the last three years the

    real income of the population grew almost by one third and

    reached the maximum level of 1997.

    High rates of real income growth imply higher potential

    for further increase in consumer demand. This is a positivefactor for the development of production activities.

    Monetary policyThe exchange rate dynamics in 2002 was mostly

    smooth and monotonous. The US dollar exchange rate

    was growing by 0.2-0.4% per month, except for July

    when it didnt change virtually, and December when it

    declined by 0.2%. The last change is unique. For the first

    time from the beginning of 90-s the US dollar exchange

    rate declined in December. Obviously it was determined by

    the excessive supply of foreign currency caused by both

    the considerable export surplus and probably the inflow of

    foreign capital in the form of credits provided to private


    The Bank of Russia was obviously evading the intensive

    ruble intervention measures to support the US dollar rate. It

    tried to avoid an excessive money supply as it could cause

    high inflation in January. As a result the US dollar exchange

    rate for the last year increased only by 5.5%. This consoli-

    dated the real position of the ruble by the end of the year by

    10% as compared with the previous year.

    At the same time 2002 was characterized by a signifi-

    cant consolidation of the euro against the US dollar, and

    correspondingly against the ruble. The annual growth of the

    euro exchange rate amounted to 25% which means the real

    weakening of the ruble by 8% against the euro. This should

    be considered as a factor restraining the import growth in

    the previous year, taking into account that a considerable

    part of the Russian import falls to the share of Eurozone


    The established rate fixing mechanism, when the state

    of the foreign currency market is entirely determined by a

    substantial excess of currency supply over currency demand,

    determined the further accumulation of gold and foreign

    currency reserves. As of the end of the year their total vol-ume was equal to USD 47.8bn exceeding the result of the

    previous year by USD 11.2bn. The accumulated volume of

    gold and foreign currency reserves is a good safety margin

    for the whole financial system that allows considering the

    problem of external debt service for the nearest several

    years insignificant.

    Macroeconomic Situation in Russia in 2002

  • 8/4/2019 Sbank Ar2002 Eng


    In 2002 the main indices of the banking system

    exceeded the level reached before the crisis of 1998: as

    of December 2002 the ratio of the banking sector assets

    to the GDP volume amounted to 37.6% as compared to

    26.3% in 1998.

    The total volume of the banking sector assets

    amounted to RUR 4 015.1bn (c. USD 130bn) that is

    21.3% more as compared to the beginning of the year.

    Banking assets-GDP ratio increased by 3.6% in 2002.

    However, Russian banking system assets-GDP ratio is

    still almost 2 times less than the similar index in the

    countries with emerging economy, and almost 3 times

    less than in the developed countries. At the same time

    the number of profitable credit institutions decreased

    by 16 as compared with the beginning of the year, and

    the number of unprofitable credit institutions increased

    by 31. The volume of losses of credit institutions grew

    by RUR 954.4m up to more than RUR 4bn.

    The capitalization of the banking system increased:

    the volume of equity capital of credit institutions

    amounted to RUR 570.6bn as of the end of 2002

    (c. USD 18.5bn), having increased by 20.6% from the

    beginning of the year. Equity capital-GDP ratio was

    equal to 5.4%. It increased by 0.4% from the beginning

    of the year. The number of credit institutions withauthorized capital of RUR 300m and more grew by 23

    from the beginning of the year and amounted to 156.

    The number of credit institutions with authorized capital

    from RUR 150m to RUR 300m increased by 22 and

    amounted to 119.

    The volume of credits and other funds provided by

    banks to non-financial institutions amounted to RUR

    1605.8bn or 39.9% of the banking sector assets. From

    the beginning of the year the volume of credits provid-

    ed by banks to non-financial institutions increased by

    24%. Rapid growth of crediting rates raise the risk of

    non-payments on banking credits (the so-called bad

    loans crisis), but this index is still far from the critical

    point it constitutes only 2.4% in the banks credit port-


    As of December 2002 the volume of credits to pri-

    vate persons amounted to RUR 145.8bn that is 51%

    more than at the beginning of the year. The volume of

    credits to private persons constitutes 3.6% of the bank-

    ing sector assets.


    Macroeconomic Situation in Russia in 2002

    The analysis of the Russianstock market in 2002

    The results of the Russian stock market in the previous

    year turned out to be positive, though less impressive than in

    2001. During the year the RTS-index increased by 38.08%

    (in 2001 the growth was 81.49%).

    The change in the trend was observed several times dur-

    ing the year. Rise in quotations was observed from October2001 to the middle of May 2002. In the press and analysts

    comments, the situation was even compared to the year of

    1997. The main factor influencing the market was the

    dynamics of prices for oil and non-ferrous metals. Besides,

    financial reports and dividend policy of some issuers influ-

    enced strongly the prices for their shares.

    However, starting from the second half of May, right

    before the George W. Bushs visit to Moscow, the price cor-

    rection began. It had been expected by specialists for a long

    time. As a result the quotations were fluctuating within the

    limits of a wide declining corridor to the middle of August.

    During that period the Russian stock market became more

    dependent on the dynamics of international stock markets,

    first of all American stock markets (the influence of this fac-

    tor was observed to the end of September).

    From the end of August to December the market was

    growing slowly. The main negative events of this period

    were capture of hostages during Nord-Ost performance

    on the 24-25th of December and a sale auction of the

    states stake in Slavneft.

    The minimal value of the RTS-index in 2002, as well as in

    2001, was recorded on the first trading day of the year, and

    was equal to 267.7 points. The maximum of 425.43 points

    was reached on the 20th of May.

    On the 31st of December the RTS-index value was equal

    to 359.07 points exceeding by 38.08% the result of

    December 29, 2001.

    The total RTS turnover amounted to USD 4236.2m in

    2001. 55 228 deals were done in the Russian Trade System

    during this period.

    The trading volumeon the main stock exchanges for the year:

    Stock Volume, Average turnoverexchange USD m for the day. USD m

    2002 2001 2002 2001

    RTS 4236.2 4239.15 16.94 16.89

    MICEX 11907.91 18498.82 47.63 73.94

    FBSP(Gazprom) 1015.34 758.67 4.06 3.03

    GKO-OFZ market analysis in 2002A smooth growth of prices in the GKO-OFZ market,

    which started right after the Presidents election at the end

    of the March 2000, continued in 2002. This is explained by

    the fact that the GKO-OFZ market is influenced mainly by

    the financial situation in Russia, which remained favorable

    in 2002.

    In 2002 prices for OFZ of 27th series rose by 0.9-8%

    (in 2001 the increase in prices was 2.4-14%), and the

    coupon payments yield amounted to 14.22-16.15% of theprice as of the end of 2001 (the same yield in 2001 was

    equal to 15.35-18.41%).

    Under the circumstances of import growth and simul-

    taneously of comparatively high prices for oil the yield

    from investments in OFZ-bonds amounted to 16-24.5%

    (in 2001 15-25%).

    An average growth of prices in the OFZ-market made

    up 3.8% (in 2001 9.4%), average coupon yield 15.6%

    (16.9%), and average market yield including coupon pay-

    ments in 2002 19.5% (26.3%).


    The volume of deposits of private persons with the

    banks increased to RUR 984.9bn that is 59.9% more than

    at the beginning of the year; the deposits constituted

    24,2% (+2,7%) of the banking sector liabilities; the ratio

    of the private persons deposits to the GDP was equal to

    9.3% (+1.8%). Thus, one can observe positive changes in

    the structure of deposits of private persons. In particular,

    the volume of term deposits have increased and the share

    of funds on current accounts decreased at the same time.

    In such a way the share of funds of private persons on

    current accounts decreased by almost 10% during the

    year, the share of short-term deposits by 4%.

    Simultaneously, the share of medium-term deposits rose

    by almost 2 times. The long term capital formation of

    credit institutions that is explained by the increase in the

    share of private persons deposits placed for more than 1

    year is not yet accompanied by corresponding changes in

    crediting periods of the real sector of economy. The state

    reduced its participation in the banking sphere.

    As for the banking legislation, the Russian

    Government, the State Duma and the Bank of Russia con-

    sidered the opinion of the "financial community" profes-

    sional participants. The Government and the Bank of

    Russia accepted the development strategy of the banking

    sector till 2007 which determines the exact amount of theauthorized capital to be registered to establish a bank

    EURO 5m. This will increase the stability and capitalization

    of the whole banking system. The document also states

    that before 2004 all banks must switch to the internation-

    al accounting standards.

    Some more decisive steps have been taken. The govern-

    ment approved the bill on the insurance of bank deposits.

    The currency exchange regulation concept is stated in the bill

    on foreign currency regulation. Besides, last year the law on

    the counteraction to the legalization (laundering) of rev-

    enues gained by criminal means came into force.

    The perspectives of the banking sector development

    for 2003 look positive on the whole. The trend of its capi-

    talization growth is quite stable. A 4-5% economy growth

    results in the annual increase of the credit volume by 20-

    22%. Provided that the monetary authorities manage the

    banking sector risks in a careful and balanced way, one

    could expect a considerable consolidation of the banking

    system on the whole, business diversification and turn to

    the real sector of economy.

    Development of the Russian Banking System in 2002

  • 8/4/2019 Sbank Ar2002 Eng


    Trigger, blanched by fingers. Game-b

    smelling by leather and a bit by a wet do

    There is the same high autumn sky ov

    you, and the report spreads far off, clou

    are floating almost like in summer and t

    gun is adjusted by many hunt generatio

    who shouldered it the same way.

    Piece-things. Hunt

  • 8/4/2019 Sbank Ar2002 Eng


    the situation in the global financial markets and the pos-

    sibility for Russia to get an investment grade in the near-

    est future, state securities can be considered very reliable

    and liquid assets. The growth of the Bank bills of

    exchange portfolio was very significant it increased by

    almost 8 times up to RUR 618m (Chart 7). The portfolio

    consists of bills of exchange of the largest reliable

    Russian companies, mainly of extracting enterprises(Gazprom, TNK, etc.) as well as of the well-known

    Russian banks (the Savings Bank, Vneshtorgbank,

    Gazprombank, Trust Bank, Alfa-bank, etc.). Over 80% of

    the portfolio securities circulated in the over-the-counter

    market being quite liquid.

    Sudostroitelny Bank also maintains high liquidity due

    to considerable balances on NOSTRO correspondent

    accounts: by the end of 2002 they were equal to RUR

    4,115m (Chart 8).

    Such an increase in the volume of operations has cer-

    tainly affected the results of the Bank activities. In 2002

    the Bank profit amounted to RUR 23,8m, thus exceeding

    the result of 2001 by more than 10 times; and retained

    earnings were equal to RUR 21,5m, exceeding the previ-

    ous year result by more than 15 times (Chart 9).

    The above indicated figures show only the profit

    reflected in the accounts, whereas the Bank provision

    which can be considered a deferred profit also grew sub-

    stantially. It amounted to nearly RUR 210m as of the end

    of 2002 exceeding the volume at the beginning of the

    year by more than 2 times (Chart 10). Thus the total prof-

    it of Sudostroitelny Bank from the beginning of its activi-

    ties to the end of 2002 constituted RUR 250m including

    all its reserves and provision. In addition to the sharehold-

    ers capital this is a guarantee of stability and reliability of

    the credit institution.

    Sudostroitelny Bank is developing very intensively in

    accordance with the worked-out strategy. The net profit

    growth in the last year was mainly caused by the increase

    in net operational revenues and optimal growth of non-

    operational costs. The net operational revenues (accord-

    ing to the Bank methodology) increased by more than

    1.7 times up to RUR 178m in 2002. At the same time (as it

    has already been mentioned above) their main part con-

    stituted revenues from crediting. During 2002 the volumeof credits increased by over 2.5 times up to RUR 133m

    making up 75% of net operational profit of the Bank

    (Chart 11). Such a considerable increase in the field of

    crediting of the real sector of economy has become pos-

    sible due to a number of macroeconomic factors:

    improvement of the investment climate in Russia, eco-


    Main Results of Sudostroitelny Bank in 2002

    The further rapid development of the Bank in 2002

    yielded considerable results the Bank is now ranked

    among 50 largest Russian credit organizations. The Bank

    assets increased by more than 2.5 times up to RUR 8,493m

    (Chart 1). This allowed the Bank to acquire greater value in

    the market and to open new possibilities for itself and its

    clients. The equity capital rose during the last year also by

    2.5 times (up to RUR 1,660m, Chart 2). This made possibleto cover most risk assets by own resources.

    The growth of the resource base was supported by the

    growth of clients accounts. The 33% increase (up to RUR

    2,007m, Chart 3) attained in 2002 exceeds substantially

    average banking sector indices. It is quite a good result in

    the view of a high market competition. One should empha-

    size that the main progress achieved by the Bank in this

    field i s conn ected with a number of factors including

    acquisition of several big clients, continuing process of the

    resource base diversification as regards to the main clients

    and industries, as well as attraction of long-term resources.

    A considerable growth in balances of the LORO

    accounts is also to be noted. Performing regular operations

    in the interbank market is quite a new area of the Bank

    activities. The Bank started developing it intensively at the

    end of 2001 and achieved considerable results already in

    2002. A two times increase in the number of LORO

    accounts and a four times growth of accounts balances

    (Chart 4) were caused by the change of the Bank position

    in the banking services market, the growth of clients confi-

    dence and an active implementation of the policy aimed at

    attracting other banks.

    Successful issue of own bills of exchange for the total

    sum of RUR 300m with over one year maturity date and

    the rise in the equity capital resulted in the growth of the

    credit portfolio, making it the main source of income.

    During 2002 the credit portfolio increased by more than

    3 times and reached RUR 1,842m (Chart 5). The weighted

    policy of the bank management regarding credit risks

    made this growth balanced and adequate. The Bank still

    keeps to the policy of crediting its reliable clients and does

    not use this tool as the main marketing trick for attracting

    the new ones.

    In addition to direct crediting of the real sector of

    economy Sudostroitelny Bank trades actively in securities.During 2002 the volume of the emissive securities portfolio

    (state and corporate bonds and shares) as well as the

    shares traded actively in the over the counter market, was

    almost doubled and reached RUR 250m (Chart 6). A con-

    siderable part of it (over 60%) constitute state securities

    Russian internal and external liabilities. Taking into account


    Main Results of Sudostroitelny Bank in 2002

  • 8/4/2019 Sbank Ar2002 Eng



    Main Results of Sudostroitelny Bank in 2002

    nomic growth, stabilization of national currency exchange

    rate, decrease of inflation, positive surplus of the foreign

    trade balance of Russia and some others. At the same time

    the Bank continued developing and consolidating its mar-

    ket position trading actively in securities. During 2002 the

    Bank gained almost RUR 100m of its net income from this

    market sector having exceeded the result of the previous

    year by almost 2.5 times (Chart 12). At the same time the

    Bank investments were properly diversified. This allowed

    to reduce the risks and to draw stable profit.

    It is important to note that the Bank management

    exercises effective control over the expenses. Therefore

    the total non-operational costs of the Bank increased by

    only 2.2 times up to RUR 38,8m during 2002. One should

    emphasize that most of these expenses were connected

    with the personnel, marketing and advertising that corre-

    sponds fully to the strategy of the Bank regarding its mar-

    ket share growth.

    To summarize one can say for sure that Sudostroitelny

    Bank takes a strong position in the Russian banking market

    and possesses high potential for the further development.


    Sudostroitelny Bank in Russian Ratings as of January 01, 2003- 41st by the volume of net assets;

    - 48th by the volume of equity capital;

    - 12th by the assets growth;

    - 22nd by the equity capital growth;

    - 2nd by the volume of USD exchange deals in the System of Electronic Trading

    of the Moscow Interbank Currency Exchange /SELT MICEX/ in 2002

    Development of Basic Financial Indices in 2002- total assets increased by more than 2.5 times and amounted to RUR 8 493m as of January 1, 2003;

    - equity capital increased by 2.5 times and reached RUR 1 660m;

    - volume of clients accounts balances and issued bills of exchange increased by 33% and reached the level of RUR 2 007m;

    - correspondent accounts balances rose by 4 times and amounted to RUR 3 823m.;

    - total credit portfolio volume increased by almost 3 times (up to RUR 1 842m);

    Main Results of Sudostroitelny Bank in 2002

  • 8/4/2019 Sbank Ar2002 Eng


    h!, - said an artist on opening the wi

    dow and looking at diamond rime smelti

    on a yellow leaf The sun is hurryi

    through the mist. Ah! Kuznetsov

    service comes to life in the morning y

    low leafs on white ground, decorated by t

    artists hand. The service is standing

    your table and coffee in it has never h

    time to get cold. And you always strive aft

    the cup, so fragile and graceful, on

    saucer, so suitable for hand.

    Piece-things. China

    Fi i l M k M M k S i i

  • 8/4/2019 Sbank Ar2002 Eng



    Financial Markets. Money Markets

    In 2002 Sudostroitelny Bank significantly increased the

    volume of operations and became one of the active partic-

    ipants in all sectors of the Russian interbank market.

    In accordance with the development strategy for 2002

    the Bank was intensively broadening cooperation with var-

    ious financial and credit organizations in the interbank

    market. As a result during the last year the total number

    of counterpart-banks increased by 2 times and exceeded

    150. This allowed the Bank to improve considerably the

    quality of liquidity management. At the same time the

    regular analysis of the financial position of the countera-

    gents made it possible to minimize risks and to adjust the

    established credit limits in time.

    During the last year the Bank consolidated its position

    as an active foreign exchange operator at the Moscow

    Interbank Currency Exchange (MICEX). From January to

    December 2002 Sudostroitelny Bank occupied the second

    place among the leading forex operators with respect to

    the total volume of USD exchange deals. The Bank is also a


    Operations with securities have always been an

    important part of the Sudostroitelny Bank activities. The

    basis of the Bank portfolio is comprised of instruments

    with adequate reliability and high liquidity. First of all

    these are ruble and currency nominated Russian govern-

    mental bonds which possess good liquidity and high relia-

    bility. During 2002 the Bank increased investments in

    these instruments (Chart 13).

    During 2002 the Bank portfolio of corporate bonds

    extended significantly. Most of them are characterized

    by both high liquidity and appropriate yield. Much atten-

    tion was paid to the analysis of issuers reliability as well

    as to the diversification of investments. As a result the list

    of issuers by the end of 2002 was extended to 30. The

    total volume of investments in this market sector grew by

    more than two times in 2002 (Chart 14).

    At the same time the Bank purchased bills of

    exchange of well-known market issuers mostly banks.

    This sector grew by more than 4 times and the invest-

    ment volume exceeded RUR 600m (Chart 15).

    The portfolio structure of Sudostroitelny Bank is

    shown in Chart 16.

    Besides, the Bank trades in shares in the Moscow

    Interbank Currency Exchange (MICEX) using the system

    of remote access. To meet the wishes of its clients and

    partners, in 2003 the Bank will be ready to provide thepossibility of Internet-trading to its clients. The new serv-

    ice will allow the clients to get on-line access to trading in

    the main Russian stock exchanges.

    Within the framework of the program accepted by

    the Bank and aimed at providing the full range of services

    in the financial markets to the clients, in December 2002

    the Bank received the license of the professional securi-

    ties market participant for depositary operations, issued

    by the Federal Commission for the Securities Market.

    Own depositary and Internet-trading possibility will

    allow the clients to minimize their costs and raise the

    effectiveness of their operations. Moreover the Bank has

    obtained more opportunities to use securities as a mecha-

    nism of a guarantied fulfillment of obligations by its

    counterpart-banks regarding operations in the money

    market. The Bank clients can now use not only bills of

    exchange but also other securities to cover their credit


    market-maker in the over-the-counter foreign currency

    market. It regularly performs arbitrage operations, pro-

    vides quotations for all kinds of market instruments with

    narrow spread. As a result of appropriate foreign

    exchange activities of the Bank, Sudostroitelny Bank

    dealer Sergey Danilov was ranked among 10 best forex

    dealers in Russia of 2002 (according to the traditional

    competition poll of the Moscow International Currency


    The Bank also consolidated its position in the market

    of interbank credits. The number of counterpart-banks

    which obtain credits on the security of counter deposits

    and high-liquidity securities increased. At the same time

    there rose the number of direct credit lines opened in

    favor of Sudostroitelny Bank with other banks, that

    reflects growing confidence of counterpart-banks.

    Furthermore in 2002 the Bank performed operations

    in the international FOREX market selling currency to

    counterpart-banks and buying it on behalf of the clients.

    Securities Correspondent banking

  • 8/4/2019 Sbank Ar2002 Eng




    lines. REPO-operations have allowed the Bank, on the one

    hand, to satisfy the clients needs in short-term resources,

    and on the other, to increase profitability in the volatile


    Besides, the Bank performs operations on managing

    clients securities portfolios and related funds, carries out

    collection operations and operations on domiciliation of

    other issuers securities.

    High profitability of the Bank from operations in the

    stock market during 2002 is explained in many respects by

    high professionalism of the securities department special-

    ists. They have more than 8 years of the financial markets

    expertise that enables them to render any consulting serv-

    ices to the clients as regards to this rapidly developing



    Correspondent banking

    In response to the growing demand of the clients for fast and quality settlements Sudostroitelny

    Bank extended significantly its correspondent network. During 2002 the Bank established new relations

    with 31 credit institutions, thus providing the clients with new possibilities of getting high quality bank-

    ing services and expanding the geography of their business. Main correspondent banks of

    Sudostroitelny Bank are Deutsche Bank Trust Company Americas (main account), Deutsche Bank AG,

    Raiffeisen Zentralbank Oesterreich AG, Raiffeisen-Centrobank AG (main account), Union Bank of

    California International. This allows Sudostroitelny Bank to maintain the high level of service and carry

    minimum operational risks.

    In 2002 Sudostroitelny Bank took new positions in the interbank services market. Developing a uni-

    versal correspondent network and presenting a wide range of competitive banking products enabled

    Sudostroitelny Bank to become a settlement bank for a great number of its counteragents and to

    attract new counterpart-banks for cooperation. In 2002 the Bank opened correspondent LORO

    accounts for 29 banks, that exceeds the result of the previous year by 2 times. This was possible due to

    the established high reputation of the Bank in the interbank market, efficient organization of service

    for correspondent banks and use of the latest technologies. Real-time account management using the

    Internet bank-client system SBANK.RU allowed the correspondent banks to make settlements for their

    clients in a more efficient and operative way; favorable dollar transfer rates, a prolonged operational

    banking day, as well as possibility of intraday overdrafts were decisive factors for concluding partner-

    ship agreements with Sudostroitelny Bank. Besides, being one of the market-makers in the foreign

    exchange market enabled the Bank to offer to its clients favorable exchange rates.

    Stable financial position, growth of main economic indices of the Bank and informational openness

    determined the considerable increase of the number of counterpart-banks as regards to the interbank

    operations. In 2002 the Bank concluded 69 general agreements on cooperation in the interbank market,

    and average daily correspondent accounts balances increased by more than 4 times. The progress

    achieved in the interbank settlements sector allows making plans for the future with confidence. The

    worked-out strategy of the Bank regarding the development of correspondent relations implementsfurther improvement of the settlement services quality with respect to the established correspondent

    relations, introduction of new banking products, extension of the correspondent relations network and

    gradual development of the Bank activities in the regions of Russia and near foreign countries.

    Piece-things Cigar

  • 8/4/2019 Sbank Ar2002 Eng


    The cigar, put into the box by a Cuban bo

    in 1980, smells like the cigar, rolled on t

    thigh of a mulatto girl of the year 1800:

    coffee, of dusk, of rum and of a casual f

    buster from the schooner "Bloody Mary

    Admiral Nelson or another one-eyed we

    those who drowned it ten years after t

    mulatto and the filibuster had met. T

    same, fingers stirs, unique for centuri

    the same rumba rhythm and moist brea

    of the ocean, saving the leaf from premture death.

    Piece things. Cigar

    Client Policy Client Policy

  • 8/4/2019 Sbank Ar2002 Eng



    Clients are one of the main assets for Sudostroitelny

    Bank. The Bank tries to improve its infrastructure in

    accordance with the clients needs and to renew its infor-

    mation and resource base for maximum support of their

    businesses. Any financial product of the Bank is elaborat-

    ed for each customer with a view of his personal

    demands and business peculiarities. Thus, the Bank ren-

    ders unique services to its clients. Each client feels atten-

    tion towards him and his problems irrespective of his

    banking account and business field.

    Although corporate clients remain a priority direction

    of the Bank activities, its working principles apply to pri-

    vate persons as well. According to marketing researches

    Sudostroitelny Bank has a reputation of a reliable partner

    among its clients. The Bank seeks not only to maintain a

    high level of quality of the services rendered but also to

    make a special atmosphere of mutual respect and confi-

    dence in relations with the clients. Such approach of the

    Bank to the customer service makes it possible that the

    clients allow the Bank to participate in their business

    plans not only in the financial part of the business but

    also in production and service areas.

    Close cooperation with the partners, individual work

    with potential clients, operative decision-making process

    and information openness determine the stable growth of

    Sudostroitelny Bank client base. In 2002 the number ofaccounts opened with the Bank increased substantially: a

    number of corporate accounts grew by 40%; a number of

    personal accounts - by more than 10%. At the same time

    during the year there was a steady rise in clients accounts

    turnover and balances by the end of the year the increase

    in average daily account balances amounted to 33% and

    exceeded RUR 2bn. The success of the Bank in this field is

    explained by the acquisition of a number of new big clients,

    by the diversification of the resource base as regards to

    main clients and industries, as well as by the increase in the

    volume of the attracted long-term resources.

    y y

    Sudostroitelny Bank pays much attention to improv-

    ing the quality of the banking service and developing the

    range of services rendered. In 2002 several important

    services were introduced. The Bank joined the "Customs

    card" system and started effecting customs payments by

    using a special microprocessor card. Besides, the Bank

    became an Associate member of the VISA International

    payment system, issued own cards VISA Gold, VISA

    Classic and VISA Electron, and launched the so-called

    "salary projects", i.e. started rendering services to its

    clients connected with salary payment at their enterprises

    by means of these cards. For both corporate clients and

    private persons the Bank afforded an opportunity to

    open new kinds of deposits, including euro deposits.

    Sudostroitelny Bank has always been taking leading

    positions in the Russian market regarding the introduc-

    tion of the latest technologies and offering new bank-

    ing products. The SBANK.RU internet-banking system

    developed and introduced by the Bank experts is consid-

    ered today one of the best by the quality of online-serv-

    ices rendered and the number of clients using it. The

    system allows opening an account and operating it via

    the Internet irrespective of the client location. At the

    same time it provides the multilevel information protec-

    tion. Extensive functional opportunities, simplicity and

    convenience of the system determine the growth of theclients number and the expansion of the client base


    The high-quality banking service, progressive and

    competitive settlements and information technologies

    attract new remote clients, whose businesses involve

    extracting and processing of gold and other precious

    metals. Taking into account the clients needs and

    favorable prospects for the gold market development,

    Sudostroitelny Bank took decision about entering into

    the precious metals market. Therefore the Bank started

    preparing the necessary documentation and elaborating

    new banking products to be in a position to serve clients

    of this business sector.

    Sudostroitelny Bank client policy in 2003 is aimed at

    extending the range and improving the quality of the

    banking services and products offered to corporate

    clients; introducing new financing possibilities, includ-

    ing project and trade financing; performing the func-

    tions of a finance operator and expert in projects on

    extracting and processing precious metals; increasing

    the volume of card acquiring services rendered.

    An important component of the Bank plans for

    2003 is the extension of the banking service provided to

    private persons. Having analyzed the needs of existing

    and potential clients, and the situation in the Russian

    financial market, the Bank took decision to develop the

    private banking sector. This line of the activities is

    intended for the clients whose tight time schedule does

    not allow them to place efficiently their free capital and

    to control its movement regularly. The Bank takes this

    function upon itself. Already now the Bank serve a large

    number of clients in this area: businessmen, public rep-

    resentatives, art figures and well-known sportsmen.

    Crediting Crediting

  • 8/4/2019 Sbank Ar2002 Eng



    In 2002 corporate crediting remained one of the

    key activities of Sudostroitelny Bank. The volume of

    the credit portfolio increased by almost 3 times and

    reached RUR 1 842m. At the same time the increase

    in the volume of credits was accompanied by an ade-

    quate control over credit risks. While determining

    the form and payment terms of crediting the Bank

    paid much attention to the valuation of the financial

    position of the client and its main contractors,

    to the development prospects of the clients business,

    to the liquidity of assets pawned. While determining

    the value of products or property pledged the Bank

    always considered the market situation as regards

    to these products and property. The strict control over

    the crediting process was reflected in the structure

    of the Bank credit portfolio: most part of credits

    (45%) was given on the security of property, 25% -

    on the security of securities and 30% - on the security

    of a guarantee.

    As in the previous year, in 2002 the basis of the

    credit portfolio consisted of the credits provided to

    companies. They constituted 94% of the credit portfo-

    lio. The Bank credited corporate clients mainly for the

    following purposes: financing of working capital, pro-

    duction equipment modernization, export and import

    operations, production and sale of consumer goods.For the most part credits were given in the currency

    of the Russian Federation (about 70% of the total vol-

    ume of credits in 2002).

    The structure of the credit portfolio changed to a

    certain extent as regards to the terms of crediting. The

    volume of short-term credits provided to trade organi-

    zations for the purposes of working capital financing

    increased substantially (up to 22% of the total amount

    of credits). It is connected with the considerable

    increase of the trade operations volume of some clients

    of the Bank. As before, the medium-term loans (from

    181 days to 1 year) constitute the most part of the

    amount of all credit resources provided 35%.

    The growth of the credit portfolio and changes in its

    structure resulted in the financial year in increase of the

    interest revenues of the Bank.

    The development strategy of the Bank credit activ-

    ities is aimed at extending the network of clients

    which are credited by the Bank head office and the

    branch in St. Petersburg. In 2002 the Bank improved

    "traditional" forms of crediting and extended the

    range of services through developing new forms of

    crediting. Today the Bank offers to its clients a wide

    range of credit products:

    - Crediting of trade operations, crediting of invest-

    ment projects aimed at business development and


    - Short-term overdraft crediting in case of insufficient

    resources on the account;

    - Opening, execution and advising of letters of credit,

    and providing bank guarantees;

    - Crediting of technological equipment leasing, as well

    as factoring operations

    Leasing Collection

  • 8/4/2019 Sbank Ar2002 Eng



    In 2002 Sudostroitelny Bank was intensively developing

    leasing operations.

    The largest projects in the financial year involved

    acquiring the equipment for a factory producing printing

    presses (Smolensk), acquiring the fleet of railway cars for

    one of the Russian transport companies (Moscow).

    Besides, the Bank financed projects on leasing of shop

    equipment for a chain of stores, polygraph, food-process-

    ing and computer equipment.

    As of the 1st January, 2003, the amount of leasing

    contracts concluded (the volume of leasing payments of

    clients from the moment of concluding leasing contracts

    till their expiration in 2003-2009) is more than RUR 287m,

    that exceeds the result of the previous year by 3.3 times.

    In 2002 the Bank concluded leasing contracts for the sum

    of more than RUR 200m.

    A modern collection service is a distinctive feature of Sudostroitelny Bank. A high level of the special-

    ists qualification contributed to an intensive development of this area in 2002.

    The resource base of the service includes special equipped armored cars, all necessary communication

    facilities, and a professional escort guard. The routes of collection cover the whole Moscow region.

    The main collection services of Sudostroitelny Bank include:

    - 24-hour collection of cash and its immediate transfer to the clients account (on the same day);

    - delivery of cash and securities on the clients request;

    - money delivery for payroll payments with the selection of bank notes of the required nominal value;

    - escort of companies cashiers and forwarding agents using special transport;

    - free collection of slips from acquiring services, etc.

    A high level of efficiency and quality of services rendered by the collection service, and one of lowest

    tariffs in Moscow were highly appreciated by the Bank clients. During 2002 the number of clients using

    the collection services regularly increased by 7 times.

    Piece-things. Silver

  • 8/4/2019 Sbank Ar2002 Eng


    Silver never dies. But it becomes alive on

    in the masters hands. And then silver g

    a sound: languishing dark Shakherizad

    songs, bell ligature of Solovey or str

    and splendent accord of fugue in D Min

    You will find your silver and it will ne

    turn black and every evening your, ju

    your music will be heard off the dam


    Plastic Cards Latest Technologies

  • 8/4/2019 Sbank Ar2002 Eng



    In 2002 Sudostroitelny Bank as an Associate member

    of the VISA International payment system started issuing

    own cards VISA Electron, VISA Classic and VISA Gold.

    Paying much attention not only to the quantity but also

    to the quality of services the Bank offered to its cardhold-

    ers a number of additional services.

    For its regular clients the Bank issues real credit cards

    VISA Classic and VISA Gold with individually fixed credit

    limit. The credit is granted as a permitted overdraft: by the

    lack of own resources the client can make use of the

    resources of the Bank.

    Holders of all types of cards can manage their accounts

    at any time from any place of the planet, and receive full

    information on all operations using the SBANK.RU inter-

    net-banking system. Credit card holders can also find out

    any information regarding their credit indebtedness and


    Sudostroitelny Bank is one of the first Russian banks

    that started rendering a new service sending SMS mes-

    sages on the cardholders mobile phone to inform him of

    the card payment limit. The cardholder can be a subscriber

    of any Russian or foreign mobile telecommunication oper-

    ator. This service is rendered free of charge.

    There is a discount program granting the holders of the

    Sudostroitelny Bank plastic cards a discount for the pur-

    chase of goods and services by enterprises participating inthe program. VISA Gold cardholders are offered free insur-

    ance in one of the largest American insurance companies


    One of the most important events in the develop-

    ment of the Bank plastic cards program was the issue of

    VISA GOLD cards to the management and players of the

    Professional Hockey League of the RF, and VISA Classic

    salary cards to the Bank employees and a number of

    clients. In December the Bank paid annual interests

    charged monthly on balances of cards special accounts.

    As a result at end of 2002 the total volume of bal-

    ances of cards special accounts amounted to RUR 8,96m.

    Average monthly card accounts turnover in the forth

    quarter of 2002 made up RUR 1,55m.

    In 2002 the Bank also began issuing and servicing

    customs cards for legal entities. The annual customs

    cards turnover amounted to RUR 55,8m.

    In 2002 Sudostroitelny Bank became a registered

    Acquiring agent in the VISA International payment system. The

    Bank offers acquiring services to more than 80 trade-services

    enterprises. As of the end of the year the monthly turnover

    with regards to these enterprises amounted to RUR 32,3m.

    For the purposes of accounting for its acquiring

    clients the Bank offers a special service the possibility

    of viewing all card transactions for any time period via

    internet-banking system SBANK.RU.

    Among the Bank clients in the field of acquiring are

    such companies as Orchidee Sauvage, Bustier, Caligula,

    Baltman, Econika-style and others.In 2003 the Bank is planning to issue VISA corporate

    cards and starting intensive promotion of salary proj-

    ects into the market.

    The introduction and development of the latest tech-

    nologies is an indispensable condition for successful activi-

    ties of a modern commercial bank. In this area

    Sudostroitelny Bank has always been one of the leaders in

    the national market.

    The SBANK.RU internet-banking system, which was

    developed and introduced by the bank experts is considered

    today one of the best in the market. This can be confirmed

    by a high quality of the on-line service and a great number

    of clients using it. The system allows opening a bank account

    and managing it via the Internet irrespective of time and

    location of the client. SBANK.RU provides a multi-level pro-

    tection of all information.

    The installation of the system does not require any spe-

    cial software or technical adjustment. It is simple and con-

    venient in use. Functional possibilities of the SBANK.RU sys-

    tem are quite extensive. The system allows the client to per-

    form control over all its accounts transactions, provides

    access to operational information. All this enables the Bank

    to attract new clients and expand the geography of the

    client base.

    By the end of 2002 more than 60% of the clients started

    using the SBANK.RU system. The number of users increased

    by 3.5 times. The number of logins was growing steadily

    during the year and finally it increased by almost 3 times: in

    the 4th quarter of 2002 the logins number was greater thanin the year 2001 on the whole. The number of documents

    processed by the system grew by 1.7 times.

    The SBANK.RU system is developing steadily: its func-

    tional possibilities and the range of services are extending. In

    2002 Sudostroitelny Bank issued own plastic cards. For the

    cardholders a new service was introduced. The clients can

    now control their card transactions and inquire information

    about their account balances via the internet-banking sys-

    tem. On request the clients can receive on their mobile

    phones sms-messages informing of the card payment limit.

    For the purposes of accounting by the clients which use

    acquiring services, the Bank offers an opportunity of view-

    ing all card transactions in SBANK.RU for any indicated peri-

    od of time.

  • 8/4/2019 Sbank Ar2002 Eng


  • 8/4/2019 Sbank Ar2002 Eng


    Balance Sheet as of the 1st January, 2003 Income statement for 2002

  • 8/4/2019 Sbank Ar2002 Eng



    No. Items For the accountingperiod

    ASSETS Thousand rubles1. Funds and accounts with the Central Bank of Russia 438 8932. Required provision with the Central Bank of Russia 126 6793. Funds with credit institutions less provision (3.1 3.2) 3 726 0263.1 Funds with credit institutions 3 727 1213.2 Provision for possible losses 1 0954. Net investments into commercial securities (4.1 4.2) 201 3864.1 Investments into commercial securities 201 3864.2 Provision for the securities depreciation and possible losses 05. Loans and advances to clients 3 737 3446. Provision for possible losses 205 0747. Loans and advances to clients - Net (5-6) 3 532 2708. Accrued interest (including overdue) 771

    9. Net investments into securities held till maturity (9.1 9.2) 09.1 Investments into securities held till maturity 09.2 Provision for possible losses 010. Fixed and intangible assets, ho usehold materials, not valuable an d high-wear items 16 27 811. Net investments into securities for resale (11.1 11.2) 46 82911.1 Securities for resale 48 74911.2 Provision for the securities depreciation and possible losses 1 92012. Deferred charges of other operations including/excluding accrued interest 1 93013. Other assets less provision (13.1 13.2) 402 25813.1 Other assets 402 28913.2 Provision for possible losses 3114. Total assets (1 + 2 + 3 + 4 + 7 + 8 + 9 + 10 + 11 + 12 + 13) 8 493 320

    LIABILITIES15. Loans from the Central Bank of Russia 016. Credits from other banks and credit institutions 4 511 43617. Clients accounts 1 786 73017.1 Including personal accounts 72 89818. Deferred income from other operations 019. Issued bills of exchange 513 96820. Other liabilities 20 50521. Provision for possible losses from term investments and off-balance liabilities,

    a nd fr om set tle men ts wi th deb to rs r eg ar di ng tr an sa ct io ns wit h o ff -sh ore r es id en ts 2 4 7122. Total liabilities (15 +16 + 17 + 18 + 19 + 20 + 21) 6 835 110

    EQUITY23. Authorized capital (Shareholders equity) (23.1 + 23.2 + 23.3), including: 1 660 00023.1 Registered common equities 1 660 00023.2 Registered preference equities 023.3 Unregistered authorized capital of non-joint stock credit institutions 024. Treasury stocks, bought out from shareholders 025. Capital surplus 026. Funds and profit at the disposal of the Bank 14 09727. Revaluation of fixed assets 3528. Profit (loss) for the accounting period 23 79829. Dividends, charged from the current year profit 030. Distributed profit (excepting dividends) 2 34131. Retained earnings (28 29 30)* 21 45732. Expenses and risks affecting on equity 37 37933. Total eq uity

    (23 23.3 24 + 25 + 26 + 27 + 31 32 for profit-making credit institutions),(23 23.3 24 + 25 + 26 + 27 +28 32 for loss-making credit in stitutions) 1 658 210

    34. Total liabilities and equity (22 + 23.3 + 33) 8 493 320

    OFF-BALANCE LIABILITIES35. Irrevocable liabilities of the Bank 4 073 54936. Guarantees issued by the Bank 46 889

    *) items 29, 30, 31 are to be filled in only by profit-making credit institutions.

    Trust management operations were not performed


    No. Items For the accounting


    Interest and similar income Thousand rubles

    1. Placement of credits, deposits, loans and money on accounts with other banks 18 762

    2 . L oa ns t o o th er c li en ts 1 45 6 49

    3. Funds provided for leasing 0

    4. Securities with fixed interest rate 19 105

    5. Other sources 872

    6. Total interest and similar income (1+2+3+4+5) 184 388

    Interest and similar expenses

    7. Funds of other banks, including loans and deposits 22 419

    8. Funds of other clients, including loans and deposits 127

    9. Issued bi ll s of exchange 21 68810. Rental 2 940

    11. Total interest and similar expenses (7+8+9+10) 47 174

    12. Net interest income (6 11) 137 214

    1 3. C om mi ss io n i nc om e 1 2 4 62

    14. Commiss ion expenses 15 078

    15. Net commission income (13 14) - 2 616

    Other operating income

    16 . I nc om e f ro m o pe ra ti on s w it h f ore ig n c urr en cy, i nc lu di ng c urr en cy ex ch an ge i nc om e 3 60 2 00

    17. Income from operations of buying/selling of precious metals, securities and other assets,

    positiv e results of revaluation of precio us metals, securities and other assets 7 0 7 39

    18 . D iv id en d y ie ld 39

    19. Other current income 3 144

    20. Total other operating income (16+17+18+19) 434 122

    21. Total current income (12+15+20) 568 720

    Other operating expenses

    22. Payroll 10 719

    23. Other operating expenses 26 787

    2 4. E xp en se s f ro m o pe ra ti on s w it h f or ei gn c ur re nc y, i nc lu di ng c ur re nc y e xc ha ng e e xp en se s 3 82 7 4525. Expenses from operations of buying/selling of precious metals, securities and other assets,

    negative results of revaluation of precious metals, securities 3 488

    26. Other current expenses 12 312

    27. Total other operating expenses (22+23+24+25+26) 436 051

    28. Profit before provisions and unforeseen income/expenses (21 27) 132 669

    29. Increase of provision for bad and doubtful debts 105 345

    30. Increase of provision for devaluation of securities 20

    31. Increase of other provision 3 506

    32. Profit before unforeseen income/expenses (28293031) 23 798

    33. Unforeseen income after deduction of unforeseen expenses 0

    34. Profit before taxation (32 + 33) 23 798

    35. Profit tax *) 2 341

    3 6. D ef er re d p ro fi t t ax 0

    36a. Unforeseen expenses after taxation 0

    37. Net profit for the accounting period (34 36 36a) 23 798

    Cash flow statement for 2002 Information about fulfillment of main requirements (mandatory indicators ),specified by normative acts of the bank of russia, as of 1st January, 2003

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    Mandatory indicator Amount or percentage

    as of the accounting date

    1 The indicator of the sufficiency of bank's own resources (capital) (N1, %) 24,72 The value of an estimated provision for possible losses on loans, calculated in accordance

    with the requirements specified by normative acts of the Bank of Russia (thousand rubles) 205 0743 The value of set up provision for possible losses on loans (thousand rubles) 205 0744 The calculated value of provision for securities devaluation and possible losses, calculated in accordance

    with requirements specified by normative acts of the Bank of Russia (thousand rubles) 5 5175 T he v al ue o f s et up pr ov is io n for s ec ur it ie s d ev al ua ti on a nd po ss ib le l os se s ( th ou sa nd ru bl es ) 5 5 17

    Chairman of the Board Golubkov A.K.

    Chief accountant Zubova E.K.


    No. Items Cash flow

    for the accounting period

    I Cash flow from operating activities: Thousand rubles

    1. Interest income 184 388

    2. Interest expenses 47 174

    3. Commission income 12 462

    4. Commission expenses 15 078

    5. Income from operations with foreign currency 6 309

    6 . I nc om e fro m o pe ra ti on s o f b uy in g/ se ll in g o f p re ci ou s m et al s, s ec ur it ie s a nd o th er a ss et s 6 6 4 85

    7. Loss from operations with foreign currency 7 922

    8. Lo ss from operations of buyin g/selling of precio us metals, securities and other assets 199

    9. Dividend yield 39

    10. Other operating income 3 144

    11. Other operating expenses 49 818

    12. Unforeseen expenses after taxation 0

    13. Total income/expenses (13.1 + 13.2), including: 150 029

    13.1 Income/expenses (1 2 + 3 4 + 5 + 6 7 8 + 9 + 10 11 12) 152 636

    13.2 Increase of income/expenses -2 607

    14. Payments to the state budget from income, payments for charity and other purposes - 1 054

    1 5. C as h f lo w fro m o pe ra ti ng ac ti vi ti es b ef or e c ha ng es i n c ur re nt a ss et s/ li ab il it ie s ( 13 + 14 ) 1 48 97 5

    Changes in current assets

    16. Required provision with the Central Bank of Russia - 78 723

    17. Funds with credit institutions -2 166 489

    18. Investments in commercial securities - 129 238

    19. Loans and advances to clients - 2 796 077

    20. Other assets 367 885

    Changes in current liabilities

    21. Loans from the Central Bank of Russia 0

    22. Credits from other banks and credit institutions 3 456 025

    23. Clients accounts 728 001

    24. Other liabilities -25 494

    25. Net cash flo w from curren t op erations (16 + 17 + 18 + 19 + 20 + 21 + 22 + 23 + 24) - 644 110

    26. Net cash flow from operating activities (15 + 25) - 495 135

    II Cash flow from investment activities

    27. Fixed and intangible assets, ho usehold materials, not valuable an d high-wear items - 3 837

    28. Investments into securities held till maturity 66 926

    29. Investments into securities for resale -44 949

    30. Net cash flow from investment activities (27 + 28 + 29) 18 140

    III Cash flow from financial activities

    31. Authorized capital (shareholders equity) 1 000 000

    32. Treasury stocks, bought out from shareholders 0

    33. Capital surplus 0

    34. Funds and income at the disposal of the Bank 653

    35. Dividends, charged from the current year income 0

    36. Issued bills of exchange 38 94337. Net cash flow from financial activities (31 + 32 + 33 + 34 + 35 + 36) 1 039 596

    38. Positive/negative results of revaluation of precious metals, securities and fixed assets;

    charged funds, not included in the finance result, and other components - 51 364

    39. Net flow of cash (26 + 30 + 37 + 38) 511 237

    40. Amount of cash an d it s equivalents as o f the beg inning of the accounting period 844 472

    4 1. A mo un t o f ca sh an d i t s e qu iv ale nt s a s o f t he en d o f th e ac co un ti ng per io d (3 9 + 40 ) 1 35 5 7 09

    Unconditionally positive conclusion

    In our opinion, financial (bookkeeping) accounts of Commercial bank "Sudostroitelny Bank" (Limited Liability Company) shows

    in all existing respects the true financial position as of 1st January, 2003, and results of financial-economic activities for the peri-

    od from the 1st January, 2002 to the 31st December, 2002 inclusive.

    Auditing organization Limited Liability CompanyFinExpertiza

    License number 002588

    Date of license issue 06.11.2002

    License expiration date 05.11.2007

    License issuing authorities Ministry of Finance of the Russian Federation

    Name of the director of the

    auditing organization Elena A. Trubnikova

    Person who approve the present accounts:

    - Name of person who approve

    he present accounts Elena A. Trubnikova

    - Position General director

    - Number of a document certifying

    the authority of the person, who approved

    the present accounts 1

    - Date of a document certifying

    the authority of the person, who approved

    the present accounts 04.01.2003

    - Document certifying the authority of the person,

    who approved the present accounts rder

    Piece-things. Watches

  • 8/4/2019 Sbank Ar2002 Eng


    Time is impassive and implacable. Tim

    breaks up worlds, washes down civili

    tions. But your Grandfathers watch, cou

    ing off inexorable time, connects you, yo

    father, your grandfather and that mast

    with an ancient magnifier on his brow, w

    held time current in his fingers and creat

    for centuries ahead. For son, for grandso

    for great-grandson. For your son.

  • 8/4/2019 Sbank Ar2002 Eng


    Photos by Vladimir Clavijo-Telepnev


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