Upload
others
View
4
Download
0
Embed Size (px)
Citation preview
Annual
Report
2008
Our work is focused on providing services
and loans to Russian industrial enterprises.
We offer our customers cutting-edge financial
technologies that promote industrial growth
and the upgrading of the Russian economy.
The principal values we base our operations
on are reliability, quality, efficient growth and
responsible partnership in relations
with customers.
Annual
Report
2008
Our work is focused on providing services
and loans to Russian industrial enterprises.
We offer our customers cutting-edge financial
technologies that promote industrial growth
and the upgrading of the Russian economy.
The principal values we base our operations
on are reliability, quality, efficient growth, and
responsible partnership in relations
with customers.
Annual Report
2008
Contents
Statement of the Chairman of the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . 2
Statement of the President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Management Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Russian Economy in 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
The Bank’s Position in the Russian Financial Sector . . . . . . . . . . . . . . . . . . . . . . . . . 9
Financial Performance in 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Services to Corporate Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Lending Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Servicing Import and Export Transactions and Global Cooperation . . . . . . . . . . . 19
Services to Private Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Investment Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Financial Market Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Inter-Bank Cooperation and Correspondent Relations. . . . . . . . . . . . . . . . . . . . . . 24
Risk Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Internal Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Information Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Human Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Charity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Summarised Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Novikombank | Annual Report 20082
2008 was the 15th anniversary of Novikombank’s
operations in the Russian financial market. This may
be an unremarkable period of time in global terms,
but for Russia, where the banking system started its
development only in the early 1990s, a record of
operating stability this long is a proof of Novikom-
bank’s reliability as a partner for the companies and
individuals who have entrusted their money to it,
who make use of its services and rely on its invest-
ment solutions and service technologies.
Novikombank today is one of the pillars underpin-
ning Russian industry. Holding a position of respon-
sibility even during the slowdown months of 2008,
Novikombank continued to shore up Russia’s real
economy, providing loans to the engineering, car-
making and aircraft industries.
The Bank’s strategy is geared towards playing
a greater role in the provision of loans and services
to key industries. This will enable Novikombank to
become one of the most essential components of the
financial infrastructure of the Russian technology and
engineering industries, strengthening its positions
in the national economy and the banking sector.
The first moves towards implementing this strategy
have already been made. Since AVTOVAZ became
Statement of the Chairman of the Board of Directors
a shareholder of the Bank in late 2008, Novikom-
bank’s capital base has significantly increased.
A new Board of Directors comprising top-managers
of Russia’s leading industrial enterprises was
elected in early 2009.
I am confident that the experience gained from its
long-term relations with its customers will serve as
the basis for a qualitative and quantitative growth of
the Bank’s business. Together with all of its partners,
Novikombank will contribute to the consolidation of
Russia’s economy and the protection of the national
interests of this country.
Sergey Chemezov
3
In 2008, one of the most difficult years for both the
Russian and global economies, Novikombank con-
tinued to lend active financial support to the national
economy, and consistently expanded loans to major
Russian industrial enterprises.
Without successful and high-performing partners,
the business of any bank can neither be gainful nor
achieve stability. With this governing principle in
mind, Novikombank pursued a policy of improving
customer relations in the core lines of its business.
Progress was made in all sectors – corporate lending,
attracting customer deposits, retail banking, inter-
bank cooperation and investment banking services.
Statement of the President
The slowdown of global capital markets resulted in
a significant reduction of profitability and higher bank-
ing risks. Nonetheless, Novikombank showed growth
in most key financial indicators in 2008. Novikombank
now ranks No. 68 in equity and is among the top 15
most reliable banks in the country.
We expect not only to maintain but also to consolidate
our positions in the Russian banking system in 2009.
Signing a cooperation agreement with the Russian Tech-
nologies State Corporation early in 2009 was a crucial
event that has determined a substantial potential of
Novikombank’s development.
We expect that partnership with the Russian Technolo-
gies SC will serve as the basis for further qualitative and
quantitative growth of Novikombank’s business. Our in-
volvement in addressing the most critical tasks of fund-
ing innovations in the Russian economy will make the
Bank one of the most authoritative financial institutions
in such key industries of the national economy as the
engineering, car-making, high-tech and other industries.
Finally, I would like to cordially thank all of our share-
holders, customers and partners. On our part, we will do
our best to promote our cooperation in order to success-
fully achieve our increasingly larger-scale objectives year
after year.
Ilya Gubin
Novikombank | Annual Report 20084
Board of Directors Management Board
Chairman
of the Board of Directors
Sergey Chemezov
Director General,
Russian Technologies State Corporation
Members
of the Board of Directors
Boris Aleshin
President, JSC AVTOVAZ
Yuriy Artyakov
Senior Vice President, Corporate Customer Relations
Department, JSCB NOVIKOMBANK
Ilya Gubin
President, JSCB NOVIKOMBANK
Igor Zavyalov
Deputy Director General,
Russian Technologies State Corporation
Igor Makarov
Chairman of the Board of Directors,
ITERA Oil and Gas Company Ltd
Nikolay Tokarev
President, JSC Transneft
Denis Ursulyak
Advisor to the Board of Directors,
JSCB NOVIKOMBANK
Chairman
of the Management Board
Ilya Gubin
President,
JSCB NOVIKOMBANK
Members
of the Management Board
Sergey Ablyaev
First Deputy President
Tatiana Ryskina
First Deputy President
Sergey Balagansky
Deputy President
Natalia Yudina
Deputy President
Tatiana Golodets
Senior Vice President
5
The balance of payments of the Russian Federation
exceeded USD 102 billion, having been boosted from
USD 77 billion in 2007. Exports, imports and the for-
eign trade surplus rose. However, these had a down-
ward trend in the second half of the year as well.
The global slowdown was the principal external
factor influencing the Russian economy and the
banking system in 2008. The financial squeeze
slashed liquidity and the investors’ appetite for risk,
and as a result foreign loans to Russian companies
dried up. So the Russian external debt, which had
been increasing till autumn 2008, primarily due
to corporate borrowings, started to shrink at the
year-end. Governmental debt accounts for less
than 10%, banks’ debts for 30–35%, and the
combined debts of other sectors for 55–60%
of its composition.
The economic slowdown dragged down the prices
for oil and other commodities exported by Russia.
They dropped from all-time highs to extreme lows
in a few months. A reduction in Russian compa-
nies’ foreign currency revenues, the impossibility
of refinancing loans, and the need to repay bor-
rowings raised on the global market earlier, pushed
up the cost of the Bank of Russia’s currency basket
in late 2008 – early 2009.
The development of the banking sector was also in
line with the general trends for the year. Over the
first 7 months of 2008, the aggregate assets of the
banking system and capital mounted
by almost 20%; the loans provided increased at an
The Russian economy and the banking system developed inconsistently in 2008. The start of the year was successful: against a background of soaring oil and fuel prices, Russia seemed a steadfast stronghold of stability, despite the global slowdown. But in the second half of the year, the steady growth in the Russian economy reversed to an ever-accelerating downfall.
01
/01
/20
07
01
/07
/20
07
01
/01
/20
08
01
/07
/20
08
01
/01
/20
09
01
/07
/20
09
Balance of payments of the Russian Federation in 2008 (USD billion)
Russian Economy in 2008
Change in Russia’s real GDP (%)0
1/2
00
8
02
/20
08
03
/20
08
04
/20
08
05
/20
08
06
/20
08
07
/20
08
08
/20
08
09
/20
08
10
/20
08
11
/20
08
12
/20
08
Novikombank | Annual Report 20086
even higher rate. But almost all quantitative param-
eters of our banking system started falling in the
second half of 2008. The focus shifted to the asset
quality in late 2008 – early 2009. Growing defaults
in the corporate sector and defaults on loans pro-
vided to individuals fuelled an avalanche of overdue
debts on banks’ balance sheets that had almost
doubled by the end of 2008 – from USD 7.5 billion
on January 1, 2008 to USD 14.4 billion on January 1,
2009. This, in turn, has led to a deterioration of prof-
itability and capital adequacy in the banking system,
and necessitated the use of public money to replen-
ish the equity of Russian banks to ensure continued
lending to the real economy.
The efforts taken by the Russian Government to
support the economy, in particular, “smooth” rouble
devaluation, the provision of funds to uphold the
money supply in the banking sector, the provision
of extra money to major banks and the refunding
of foreign loans that had been provided to Russian
companies with public money resulted in the shrink-
age of Russia’s gold and currency reserves. Their
amount, which was up by approximately USD120
billion over the first 7 months of 2008, fell by ap-
proximately USD 170 billion by the year-end and
by approximately USD 40 billion in January 2009.
However, Russia still has the third biggest gold and
currency reserves worldwide. This enables it to
pursue an efficient state economic support policy.
The efforts already implemented as part of this policy
are expected to bear fruit in H2 2009. Moreover, we
are seeing the first signs that the global economy is
overcoming the slowdown: since spring 2009, the
commodity markets and the key stock exchanges
have shown an upward trend. The economies of
a number of countries, particularly those of China
and India, displayed enviable strength. Therefore,
Russian foreign trade (USD billion)
Russian foreign debt (USD billion)
Price for the Bank of Russia’s currency basket and Brent oil
Bank of Russia’s currency basket
Russian Economy in 2008
Export Import Balance
Public debt
Banking sector
Corporate borrowings etc.
01
/01
/20
06
01
/07
/20
06
01
/01
/20
07
01
/07
/20
07
01
/01
/20
08
01
/07
/20
08
01
/01
/20
09
01
/07
/20
09
01/01/2008
01/04/2008
01/07/2008
01/10/2008
01/01/2009
01
/01
/20
08
01
/02
/20
08
01
/03
/20
08
01
/04
/20
08
01
/05
/20
08
01
/06
/20
08
01
/07
/20
08
01
/08
/20
08
01
/09
/20
08
01
/10
/20
08
01
/11
/20
08
01
/12
/20
08
01
/01
/20
09
01
/02
/20
09
01
/03
/20
09
01
/04
/20
09
01
/05
/20
09
01
/06
/20
09
7Russian Economy in 2008
despite the continued contraction of the Russian
economy in H1 20009, the forecast for its year-
end prospects is not gloomy. The anticipated
recovery of demand for Russia’s basic export com-
modities promises that the entire Russian economy,
and the banking system in particular, will resume
growth swiftly.
Russian banking system (USD billion)
Overdue loan indebtedness (USD billion)
Russian gold and currency reserves (USD billion)
Total assets Loans provided
01
/01
/20
08
01
/02
/20
08
01
/03
/20
08
01
/04
/20
08
01
/05
/20
08
01
/06
/20
08
01
/07
/20
08
01
/08
/20
08
01
/09
/20
08
01
/10
/20
08
01
/11
/20
08
01
/12
/20
08
01
/01
/20
09
01
/02
/20
09
01
/03
/20
09
01
/01
/20
08
01
/02
/20
08
01
/03
/20
08
01
/04
/20
08
01
/05
/20
08
01
/06
/20
08
01
/07
/20
08
01
/08
/20
08
01
/09
/20
08
01
/10
/20
08
01
/11
/20
08
01
/12
/20
08
01
/01
/20
09
01
/02
/20
09
01
/03
/20
09
12
/20
07
01
/20
08
02
/20
08
03
/20
08
04
/20
08
05
/20
08
06
/20
08
07
/20
08
08
/20
08
09
/20
08
10
/20
08
11
/20
08
12
/20
08
01
/20
09
02
/20
09
03
/20
09
04
/20
09
Novikombank | Annual Report 20088
Reliability Technologies
In November 2008 the Expert RA rating agency
assigned the Bank an “A” rating that reflects its high
credit standing. Novikombank was among
Russia’s top 15 most reliable banks in Profile
magazine’s rating on January 1, 2009.
The raising of Vnesheconombank’s subordinated
loan testifies to the absolute stability of the Bank’s
business model.
9
The Bank ranks No. 68 in equity and No. 79 in
assets in the Russian banking system, according to
Kommersant Dengi magazine. It also ranks No. 63
in corporate loans and No. 54 in corporate deposits
in RBC’s rating.
In November 2008 the Expert RA rating agency
assig ned an “A” rating to the Bank that reflects its
high credit standing and its business stability.
Novikombank was among Russia’s top 15 most
reliable banks in Profile magazine’s rating
on January 1, 2009.
Novikombank is a member of key infrastructure
organisations in the financial market and plays an
active part in implementing strategic steps that are
geared towards continued accelerated development
of the Russian banking system. Novikombank’s top
managers are members of management bodies
and core committees of the Association of Russian
Banks, Association of the Regional Banks of Russia
(Association “Russia”), the Moscow Bank Union,
MICEX, the National Securities Market Associa-
tion, RTS Trading System (non-profit partnership),
Moscow International Currency Association (MICA).
Novikombank is actively developing relations with
The Bank’s Position in the Russian Financial Sector
In 2008, Novikombank consolidated its competitive standing in the Russian market by strengthening its image as a reliable financial institution.
enterprises in the key industries. In particular, the Bank
and its top managers are members of the Russian Union
of Industrialists and Entrepreneurs, the Moscow Chamber
of Commerce and the Russian Engineering Union, which
promotes expanded funding of the real economy and is
leading to an increase in Novikombank’s customer base.
Novikombank is an associate member of Visa Internati-
onal and a member of SWIFT. It has joined the deposit in-
surance system. In addition, the Russian Federal Customs
Service included it in the register of lending institutions
whose guarantees are accepted by the Russian customs
authorities.
In December 2008, Novikombank became a parti-
cipant in the governmental SME support programme.
A RUB 200 million loan was raised at the Russian Bank
for Development to help the Bank provide greater finan-
cial support to enterprises in this market segment.
The raising of Vnesheconombank’s RUB 480 million
subordinated loan is further evidence of the significance
of Novikombank’s role in the Russian financial system and
in the implementation of governmental economy support
programmes and the absolute reliability of its business
model.
Novikombank | Annual Report 200810
The asset growth was accompanied by an increase
in the Bank’s capital: a RUB 1 billion subordinated
loan that matures in 2018 was raised from AvtoVAZ.
The car maker acquired 20% of the Bank’s share capi-
tal as part of an additional share issue in late 2008.
Novikombank’s equity was up by 42%, to RUB 6.6
billion in 2008. However, despite quantitative
growth, adverse market conditions in 2008 dragged
down its revenues. The Bank’s recorded a narrow loss
for 2008 — RUR 40.8 million.
Conventional banking is the core line of business
for Novikombank, as evidenced by its asset structure:
the banking segment accounts for 99% of the Bank’s
total assets.
Loans to customers are the most significant asset
group. The share of customer loans in the Bank’s total
assets stands steady at over 50%. In 2008, customer
loans accounted for 57% of total assets. Due to
increased market risks, the Bank reduced the share
of investments in securities in total assets by 39% as
compared to 2007.
The bulk of the Bank’s funds is represented by cus-
tomers’ funds. Total balances on corporate custom-
ers’ current accounts and deposits rose by 12% over
the year and reached RUB 20.1 billion by the end
of 2008, which testifies to the Bank’s possession
of a solid customer base. The interbank funds and
securities issued in the domestic market average 20%
of its resources.
Financial Performance in 2008
In 2008, the Bank’s total assets rose by 5.5% to RUB 32.0 billion.
30
25
20
15
10
5
0
7
6
5
4
3
2
1
0
Assets (RUB billion)
Equity (RUB billion)
Tier 1 capital
Subordinated loan (amortised)
11Financial Performance in 2008
65
10
2 1
1
4
8 61
18
2
2
12
6 20082007
Liabilities structure (%)
Asset structure (%)
57 Loans to customers
19 Securities
5 Assets with banks
0.3 Statutory provisions with the Bank of Russia
18 Cash and its equivalents
1 Other assets
52 Loans to customers
34 Securities
8 Assets with banks
2 Statutory provisions with the Bank of Russia
2 Cash and its equivalents
1 Other assets
2007 2008
52
1 2 2 8
34
57 1
1
8
0.3 5
1
9
61 Customers’ funds
18 Outstanding liabilities
2 Other borrowings
2 Other liabilities
12 Equity, including shareholders’ equity
and share premium
6 Banks’ funds
65 Customers’ funds
10 Outstanding liabilities
2 Other borrowings
1 Other liabilities
14 Equity, including shareholders’ equity
and share premium
8 Banks’ funds
Novikombank | Annual Report 200812
Despite the unfavourable market environment,
the Bank’s operating income stood firm at
RUB 839 million in 2008. Devaluation of the
securities portfolio and recognised losses on
trading operations with these assets strongly
affected the Bank’s income. However, core
income (net interest and commission income)
rose from RUB 1.463 billion in 2007 to
RUB 1.730 billion in 2008, i. e. by 17%.
Financial Performance in 2008
1,800
1,200
600
0
–600
–1200
1,800
1,200
600
0
Operating income (RUB million)
Net interest income
Net commission income
Net profit on securities trading transactions
Net profit on foreign currency transactions
Other operating income
2007 2008
13
Provision of services and financial support to Russian
industrial enterprises are the core lines of the Bank’s
business. Novikombank is committed to establishing
long-term and mutually advantageous relations with
its partners. In implementing its customer relations
policy, the Bank makes the most of its competitive
advantages, including premium services, prompt
decision-making, customised approach, reason-
able pricing policy, in-depth knowledge of the real
economy, many years of successful partnership with
industrial enterprises, and a team of professionals
coming from the leading banks.
The steady growth in the Bank’s customer base in
recent years testifies to the successful implementa-
tion of its chosen development strategy with a focus
on industrial diversification of its corporate business.
In recent years, Novikombank has managed
to maintain a reasonable combination of fund-
ing sources, gradually extending their maturities.
The bulk of the Bank’s resources is represented
by corporate customers’ funds, in particular, current
accounts and time deposits which increased
by 6% y-o-y.
Services to Corporate Customers
Novikombank is a high-tech commercial bank that offers its corporate customers a wide range of banking products and services.
Number of corporate customers
2006 2007 2008 2009
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
18
16
14
12
10
8
6
4
2
0
Corporate customers’ accounts (RUB billion)
Novikombank | Annual Report 200814
Partnership Technologies
The stable growth in the Bank’s customer
base over recent years testifies to a successful
implementation of the selected development
strategy focused on industrial diversification
of the corporate business. The Bank’s
customers include the leading heavy machinery,
car-making, oil and gas enterprises.
15Services to Corporate Customers
Novikombank’s current customers include many lead-
ers of the Russian industry, in particular:
� Russian Technologies State Corporation, Rosobo-
ronexport State Corporation, Oboronprom United
Industrial Corporation, MDB Compas, Beriev Aircraft
Company, A. S. Yakovlev Design Bureau, Federal
Scientific and Production Centre Pribor, Almaz-Antey,
Moscow Machine-building Plant Avangard, Izhevsk
Electromechanical Plant Kupol, the Central Aerohydro-
dynamic Institute (TsAGI);
� car-making and engineering enterprises, such as
AVTOVAZ, their suppliers and dealers;
� fuel and energy enterprises, such as the ITERA
Group of Companies, Transneft Joint-Stock Company,
and Zarubezhneft Open Joint-Stock Company;
� insurance companies, such as Military Insurance
Company, RESO-Garantiya, Independent Insurance
Group, ITERA-Garant, etc.
Novikombank has entered into cooperation agree-
ments with the Russian Technologies State Corpora-
tion, AVTOVAZ, and Konversiya Foundation, aimed
at improved interaction and increased financing of
industrial enterprises.
The Bank’s steady financial standing, its well-deserved
reputation as a reliable partner and the excellence
of its services are appreciated by its partners. As a
result, the Bank was selected by Transneft Joint-Stock
Company as a financial institution whose guarantees
of performance of contractual obligations are ac-
cepted by the company and its subsidiaries. More-
over, the Federal Customs Service has also included
Novikombank in the register of banks and other
lending institutions that may act as guarantors of
the customs authorities. All of these services are
not only in high demand among existing custom-
ers, but also help engage new customers.
Novikombank is committed to implementing an
individual approach to servicing corporate custom-
ers, with a personal manager assigned to each
customer.
Interacting with the customer’s representatives,
he arranges for the compilation of a customised
package of all the services offered by the Bank, co-
ordinates the customer’s relations with the Bank’s
business units and provides assistance in different
aspects, including:
� advice and assistance in drafting documents on
bank deals and transactions;
� creation of original patterns for transactions and
deals;
� prompt making of intra-bank decisions on cus-
tomer service issues;
� professional advice and information support on
different financial and legal issues and services of-
fered by the Bank.
Novikombank | Annual Report 200816
It was expressed, first of all, in a more conservative
approach to the evaluation of borrowers’ financial
standing, industrial risks, loan repayment sources,
adequacy and liquidity of assets offered as security.
To mitigate a possible adverse impact of the depres-
sion on the Bank’s credit portfolio, an emphasis
was placed on financial support projects for top-
priority branches of the economy – heavy machinery,
high-tech and defence enterprises, including those
implemented as part of Novikombank’s partner-
ship with the leading vertically-integrated holdings,
such as Russian Technologies State Corporation,
Rosoboronexport State Corporation, Oboronprom
United Industrial Corporation, Almaz-Antey, the
United Shipbuilding Corporation, AVTOVAZ, and
some others.
A 16% increase in loans to corporate customers in
2008 was accompanied by further diversification of
the portfolio, with a greater share of loans to the real
economy enterprises.
The Bank’s loan book quality remains high. Nonethe-
less, Novikombank is maintaining its conservative
approach to loan provisioning. Impairment provision
accounted for 4.1% of the aggregate credit portfolio
at the end of 2008.
Lending Policy
In 2008, taking into account the overall economic environment, Novikombank adhered to the strategy aimed at a moderate increase in its credit portfolio, while improving its quality and streamlining the structure of its credit investments.
20
18
16
14
12
10
8
6
2
0
Loans to corporate customers (RUB billion)
4
3
2
1
0
Provision for loan impairment (as a percentage of the credit portfolio)
17Lending Policy
In 2008, most loans were provided for:
� the funding of prospective high-tech develop-
ments;
� projects that were part of the public defence con-
tract;
� participation in federal targeted programmes
implemented in key sectors of the Russian economy;
� support for the national export of machinery and
equipment;
� funding of mid-term projects aimed at refurbish-
ment of engineering enterprises, including financial
leasing arrangements.
A series of large-scale projects has been implemented
with Novikombank’s financial support in 2008. The
Bank was active in providing funds for scientific
research related to the development of national in-
novation technologies. In 2008, a number of credit
lines were issued to MDB Compas, a leading manu-
facturer of navigation systems, for the development
of prospective GLONASS instrumentation groups
to be introduced on railways, in various aircraft and
spacecraft.
Novikombank also invested in research aimed at
creating alternative fuels. In 2008, the Bank started
funding a pilot biobutanol plant project implemented
by Biotekhnologii Corporation, a subsidiary of
Oboronprom. In partnership with Rosoboronexport,
Novikombank provided mid-term loans to Kazan
Electronic Technical Plant to implement a production
programme for the manufacture of marine systems
and state identification facilities.
As part of public defence contracts and federal tar-
geted programmes, Novikombank provided loans for
public contracts implemented by Oboronprom, TsAGI,
the Central Research and Development Institute of
Economics, Informatics and Control Systems, 121 Air-
craft Repair Plant, and a number of other companies.
While providing funds for the national export of high-
tech products, Novikombank successfully developed
long-term partnership with Rosoboronexport, a pub-
lic intermediary and an exporter of special machinery
and equipment. In particular, Novikombank played
an active part in the execution of deals concluded as
part of military and technical cooperation with foreign
countries. Using the Bank’s loans, a number of large-
scale contracts involving Vympel State Engineering
Design Bureau, the Central Research and Develop-
ment Institute of Shipbuilding Technology, MDB Com-
pas, Prompostavka, the Research Institute of Steel (NII
Stali), and others began to be implemented in 2008.
Novikombank also continued to provide funding and
strengthen partner relations with car-making, oil
and gas, agricultural, food, and other light industry
enterprises, including the Amtel Group of Compa-
nies, BioFood (a Tula-based production company),
the Ostashkovo Tannery Group of Companies, and
AVTOVAZ’s suppliers and dealers, among others.
Shifting the focus of lending towards production
companies resulted in changes in the credit portfolio
and a reduction of the proportion of construction and
trade companies in its structure.
Novikombank | Annual Report 200818
Besides conventional credit products, the Bank’s
customers requested other services: documen-
tary guarantee transactions were actively devel-
oped; patterns of funding process flows includ-
ing the principal contractor, the Bank’s customer,
and its allied enterprises, were elaborated for
customers with the use of the most appropriate
banking tools.
Heavy machinery and defence industries
Car-making industry
Trade
Food and light industries
Construction
Financial services
Other
Lending Policy
Credit Portfolio Structure (%)
19
Acting as a foreign currency control agent,
Novikombank issued some 700 new deal passports
under import and export transactions of the Bank’s
customers, loan agreements, and mixed deals.
The system of international settlements was evolved
in quantity and quality terms. Total customer pay-
ments through the Bank’s correspondent accounts
soared by almost 70% year-on-year.
The Bank continued cooperation with Raiffeisen
Zentralbank Osterreich AG, VTB Bank (Deutschland)
AG, VTB Bank (Austria) AG, Dexia Bank SA, and other
foreign banks in using documentary credit lines for
funding documentary and standby letters of credit
issued at the order of the Bank’s customers and guar-
antee operations.
Servicing Import and Export Transactions and Global Cooperation
In 2008, the Bank continued active development of foreign economic operations on behalf of its customers.
Novikombank’s programme of providing trade and
structured finance to its customers developed fur-
ther. As part of this programme, the Bank provides its
customers with the services of entering into short-
term (less than 1 year) deals of trade financing with
the participation of international banks and mid- and
long-term deals (6 to 7 years) with guarantees issued
by export credit agencies of the appropriate countries.
Novikombank | Annual Report 200820
Quality Technologies
In implementing its customer policy, the Bank
makes the most of its competitive advantages,
including premium services, prompt decision-
making, customised approach, reasonable pricing
policy, in-depth knowledge of the real economy,
many years of successful partnership with in-
dustrial enterprises, and a team of professionals
coming from the leading Russian banks.
21
In 2008, the balances of private customers’ accounts
with Novikombank showed a steadily upward trend,
even in the depression months of November–De-
cember 2008.
In 2008, the focus was on auto-
mation and the development of
card technologies, introduction of
a wide range of deposit products,
use of diverse cash management
tools, electronic services for ac-
count management and drafting
special loyalty programmes for
individuals.
In addition, the Bank actively
continued to implement com-
prehensive banking projects in
cooperation with enterprises, in-
cluding employee salary payment
using global payment systems
bank cards issued by the Bank.
A core line of Novikombank’s
retail business is services to VIP
customers. Novikombank offers
Services to Private Customers
Novikombank specialises in providing banking services to employees of the Bank’s corporate customers, as well as in servicing large private capital, by offering its customers a wide range of products and services.
its high net worth customers a system of comprehen-
sive customised services which relies on individual
approach, promptness, and confidentiality.
A personal manager is assigned to each privileged cus-
tomer of the Bank. He/she helps identify investment
preferences, draft an individual asset management
plan with the view of the customer’s needs and assists
in any financial matters – from the issuing of payment
orders and arranging for meetings with the Bank’s
partner companies to the arrangement of major deals.
Taking into account the customers’ main wishes,
Novikombank offered a number of additional private
capital management and tax advice services as
a supplement to the existing classical banking
products, in 2008.
In 2009, as part of its development of private banking
services, Novikombank is going to implement its
elaborated ideas, while expanding the range of private
capital management and advisory services that will
enable the Bank to meet the best European tradi-
tions of private banking and strengthen its long-term
customer relations.
01
/02
/20
08
01
/03
/20
08
01
/04
/20
08
01
/05
/20
08
01
/06
/20
08
01
/07
/20
08
01
/08
/20
08
01
/09
/20
08
01
/10
/20
08
01
/11
/20
08
01
/12
/20
08
01
/01
/20
09
Increase in issued bank cards of global payment systems in 2008 (%)
50
45
40
35
30
25
20
15
10
5
0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
01
/01
/20
08
01
/11
/20
08
01
/12
/20
08
01
/01
/20
09
Balances on private customers’ accounts (RUB billion)
Beggining of crisis impact in Russia
Novikombank | Annual Report 200822
In 2008, the core lines of Novikombank’s investment
business were as follows:
� provision of services to the Bank’s customers
in entering into deals with assets and operations
to raise finance;
� provision of services of investment project
drafting and reviewing to the Bank’s customers;
� financing of investment projects.
The professionalism of the Bank’s specialists, cou-
pled with extensive experience in corporate finance,
enable a broad range of investment products and
services to be offered to the Bank’s customers,
in particular:
Advice on financial strategy
and raising external financing
� Advice on M&As, restructuring, asset sales, and
creation of strategic alliances
� Development of the strategy of “explosive” busi-
ness growth funding, including the funding of M&As
� Provision of fairness opinions
� Advice on the issue and placement of shares and
bonds, with listing on Russian and global exchanges
� Advice and support during privatisation; protec-
tion against hostile takeovers
� Advice on the establishment and maintenance
of relations with investors
Investment Business
As part of the strategy aimed at expanding the range of services offered to Novikombank’s customers in different segments of the financial market, much attention was paid to the development of investment banking in 2008.
Raising of funds
� Provision of integrated financial solutions combining
different tools for raising finance
� Arrangement of private placements of shares among
Russian and foreign investors
� Arrangement and underwriting of debt securities
issues. In 2008, the Bank was involved, as arranger/un-
derwriter, in the offerings of bonds for Uralsvyazinform
8, Stroytransgaz 3, Northwestern Telecom 5,
AvtoVAZ BO-3, AvtoVAZ BO-4, MTS 03
� Arrangement and underwriting of issues of convert-
ible securities
� Provision of project finance; arrangement of syndi-
cated loans
Deals with assets
� Arrangement of M&As for Russian and multi-nati-
onal companies
� Arrangement of the restructuring of companies,
with split-off and asset purchase/sales deals
� Arrangement of LBOs/MBOs, including the provi-
sion of debt finance for the deal
� Provision of funds for successful entry into deals,
including intermediate funding
23
In entering into transactions on financial markets, the
Bank took into account the need to keep risk at an ac-
ceptable level and also to regulate the Bank’s current
liquidity and currency positions.
In 2008, the Bank actively teamed up with a great
number of counterparties, both in the placement and
raising of cash within established limits. Russia’s major
and most reliable companies remained the Bank’s
key partners on the inter-bank market. In H2 2008,
Novikombank reduced the scope of its inter-bank
transactions due to the credit crunch and increased
credit risks.
Novikombank made wide use of the pledge ar-
rangements for raising funds. It was active in signing
agreements with counterparty banks, which enabled
it to enter into transactions funding current positions
in securities and other pledge-related deals, including
inter-bank loans and conversion transactions.
The Bank was active in relations with the Bank of
Rus sia and was involved in “uncollateralized” lending
tenders, direct repurchase deals and lending against
pledges of non-marketable assets. There was also
a signi ficant increase in the Bank of Russia’s overdraft
line.
Financial Market Operations
In 2008, Novikombank entered into a broad range of transactions on financial markets, both on customer orders and as part of managing of its own positions.
In 2008, the USD 42 million international loan
provided by Barclays Bank PLC was repaid in full.
Novikombank also repaid a RUB 330 million syndi-
cated loan.
To maintain the necessary liquidity level and ensure
profitable placement of temporarily available funds,
the Bank aggressively dealt on the stock market, in-
vesting in the safest instruments, such as federal and
sub-federal securities of the Russian Federation, cor-
porate bonds of Russian and foreign issuers of the 1st
and 2nd level, promissory notes issued by the coun-
try’s major enterprises, as well as shares issued by
Russian companies. To minimise volatility of revenues,
Novikombank has consistently slashed its investments
in shares, which has resulted in the Bank’s securities
portfolio featuring only the most reliable fixed-income
financial instruments at the end of 2008.
Novikombank | Annual Report 200824
In 2008, correspondent accounts were opened with
Europe’s leading banks for global settlements.
Novikombank started dealing with precious metals
and opened unallocated gold accounts with Russian
banks – VTB and NOMOS-BANK.
Novikombank also took part in implementing the na-
tionwide SME financial support programme, as part
of which a RUB 200 million loan was raised from the
Russian Bank for Development.
As of the start of 2009, Novikombank had 220 coun-
terparty banks on the interbank market, opened 45
loro accounts and 62 nostro accounts, and concluded
more than 250 agreements for transactions on the
inter-bank market.
Inter-Bank Cooperation and Correspondent Relations
For the benefit of its customers, Novikombank continued to increase the number of Russian and foreign counterparty banks in 2008.
25
In 2008, the risk management system evolved in ac-
cordance with the adopted Risk Management System
Development Concept which envisages a comprehen-
sive approach to the risk management objective and
centralisation of the risk management functions.
The risk management system now comprises the
appropriate organisational setup as well as the ag-
gregate of methods and procedures, the rules for rela-
tions between the Bank’s business units and collegial
authorities that perform managerial, control and
methodological functions.
Risk Management Department is the core inde-
pendent business unit that coordinates the entire
risk management process and is responsible for the
improvement of the Bank’s risk management system
and for elaboration of the appropriate assessment
and management methods. As part of the risk
management system, the Bank also has in place the
Credit Committee and the Asset and Liabilities Man-
agement Committee, which take risk management-
Risk Management
related decisions, develop and approve the procedures
for their supervision. The fact that the Committees com-
prise top managers of business-focused business units
and the Risk Management Department which is inde-
pendent of them ensures a well-balanced and unbiased
approach to the analysis of deals and decision-making.
Operational risk management is the responsibility of the
Bank’s managers at all levels and is ensured by a con-
stant renewal of the Bank’s organisational structure and
internal procedures.
Novikombank’s risk management system secures as-
sessment and monitoring of the key risks inherent in the
Bank’s operations, in particular, credit risks, liquidity risk,
interest rate/exchange rate fluctuation risk in open oper-
ating day mode.
Besides customer-tailored risk management, the Bank
monitors and actively manages credit risk at the aggre-
gated level, including overall quantitative risk assessment,
risk structure analysis, and the establishment of limits for
the different types of risk undertaken by the Bank.
Novikombank has in place a risk management system that enables it to identify, assess and limit risks undertaken by the Bank, to control their scope, structure and to detect the principal factors influencing the degree of risk.
Novikombank | Annual Report 200826
Growth Technologies
As part of the strategy intended to expand the
range of services, much attention was paid to
the development of investment banking in 2008.
For instance, the Bank was involved, as arranger
and underwriter, in the offerings of debt securities
such as Uralsvyazinform 8, Stroytransgaz 3, North-
western Telecom 5, AvtoVAZ BO-3, AvtoVAZ BO-4,
MTS 03.
27
As part of the internal control system, comprehensive
monitoring of control authorities, the Audit Com-
mission, the Bank’s Internal Control Department was
arranged in the following main dimensions:
� to identify, assess, and take steps to mitigate
banking risks in good time;
� to allocate powers in entering into bank transac-
tions and other deals;
� to control information flow management and
ensure information security;
Internal Control
� to have the Bank’s employees comply with
the requirements of federal laws and regulations,
banking standards and professional ethics rules,
and internal documents that determine the
Bank’s policy and govern the Bank’s business;
� to settle the conflicts of interests arising from
the Bank’s business.
The internal control system ensures high protec-
tion of interests for the Bank’s customers, coun-
terparties, and shareholders, promoting the
Bank’s financial stability and business reliability.
Novikombank has established and maintains an efficient internal control system that covers all lines of business and business units of the Bank.
Novikombank | Annual Report 200828
The Bank’s top managers regard information technol-
ogy investments as an important part of this policy.
2008 was, in this sense, no exception.
For instance, the Bank introduced unparalleled IT
products which secured the Bank’s technological edge
on the banking market and backed up the expansion
of the list of services offered to customers by launch-
ing new software products in 2008.
In particular, a retail module for product management
using plastic cards and the module of accounting for
trust management transactions were included in the
Diasoft automatic banking system used by Novikom-
bank. In addition, the stock exchange module of
Information Technologies
automation of stock market transactions was fully
commissioned, which allowed the quantity and qual-
ity of services offered to the Bank’s customers to be
expanded.
The implementation of the CRM system has been
finalised, which has enabled services provided to the
Bank’s customers to be upgraded.
To increase productivity and operational reliability of
the Bank’s information system, there were significant
investments in hardware and software purchases.
Moreover, new arrangements for booking server and
communications equipment have been elaborated
and introduced.
One of the top priorities in Novikombank’s policy is providing customers with the widest possible range of services and tools based on the best modern banking technologies.
29
In 2008, as part of Novikombank’s HR policy, the
focus was on streamlining the management structure
and strengthening the personnel composition of the
Bank, as well as on taking efforts to improve the em-
ployee incentive system, to develop professional skills
and to improve personnel qualifications.
To ensure the fulfilment of the business objectives
set, Novikombank recruited a highly professional
team of employees. The Bank’s top managers have
gained extensive professional experience in manage-
ment, in particular, in major Russian state-run banks,
and are reputable members of the banking commu-
nity. More than 90% of the Bank’s employees have
a higher financial education.
In 2008, Novikombank also placed much empha-
sis on arranging for additional professional training
aimed at improving employees’ qualifications and
their adaptation to modern banking conditions and
changes in the regulatory and legal fields. More than
Human Resources
20% of the Bank’s employees have been trained at
professional courses and have taken part in work-
shops and conferences.
As part of the programme entitled “Establishment
of the Personnel Reserve at JSCB NOVIKOMBANK”,
the Bank succeeded in recruiting young specialists
who graduated from the leading high schools to the
Bank in 2008.
In 2008, Novikombank implemented a series of steps
that were geared towards improving social protection
of the Bank’s personnel. In particular, it concluded a
health insurance contract for the Bank’s employees
with ROSNO.
The implementation of Novikombank’s HR policy
promotes fruitful teamwork between employees
and continued improvement of staff professionalism
as part of the Bank’s overall business development
strategy.
Novikombank’s consistent Human Resources policy ensures that the qualifications and experience of each of the Bank’s employees are efficiently used.
Novikombank | Annual Report 200830
In the contemporary environment, many social
projects may only be successful if the public sector
and businesses join their efforts and if private and
public partnership is implemented. Being aware of
the importance of social investments and charitable
programmes, Novikombank regards this line of busi-
ness as an important component of the Bank’s overall
strategy which promotes efficient dialogue with the
community and improves the Bank’s image.
The corporate concept of Novikombank’s charitable
activities rests upon the principles of transparency,
maximum results and targeting. Support for chil-
dren’s education is one of the key directions. In this
field, Novikombank is committed to helping children
left without parental support to enter a profession
and become fully-fledged members of society by
creating normal conditions for their education and
development.
For many years, Novikombank has maintained stable
relations with St Alexei Ashram, an Orthodox cenacle.
The Bank provides funds to monastic communities, a
cadet corps, a kindergarten, and nurseries existing at
St Alexei Ashram.
For several years, Novikombank has sponsored the
Preobrazhensky Cadet Corps, a boarding school
that inculcates military patriotism and the traditions
of military honour of the Russian state upon young
cadets.
Charity
In 2008, Novikombank continued its involvement in
the First National Charitable Programme “Billion in
Petty Cash” implemented by the Union of Charitable
Organisations of Russia. The Bank has supplied cash
for adjuvant treatment and drugs for children suffer-
ing from cancers from disadvantaged families.
Novikombank took part in the “Books as Gifts” pro-
gramme that has been implemented by the “Illustrat-
ed Books for Small Blind Children“ charitable founda-
tion for the last 12 years.
In its charitable operations, Novikombank lays em-
phasis on Russian cultural development, the revival of
spirituality, and the preservation of national values.
Acting as a sponsor of Russian cathedrals and churches,
the Bank assists the Russian Orthodox Church in its
efforts to revive the centres of spiritual life of the
country, to restore Orthodox architectural monuments,
including:
� the parish in honour of the Reverend Seraphim
Sarovsky in the Samara Eparchy;
� the Life Giving Trinity Church in Ostankino;
� the Sacred Trinity Church in Kolomna;
� the Sanctifier Nicholas Cathedral in Golutvin;
and many others.
The Bank’s charitable activities in 2008 testify to the high demand for the Bank’s social initiatives in the Russian society.
31Charity
In 2008, Novikombank also supported the World
Russian People’s Council, Russia’s biggest public
forum where people from various political creeds who
care for Russia’s future meet.
Support for World War II veterans, veterans of military
service of the Russian Federation and operating units
of the Federal Frontier Service of the Russian Federa-
tion is another important line of Novikombank’s chari-
table work. In particular, in 2008 Novikombank took
part in funding the main events of the “Blagopoluchie”
(Well-Being) socially significant programme imple-
mented by the Inter-Agency Charitable Foundation
and intended to support the disabled World War II
soldiers and veterans, and families of law enforce-
ment officers who have been maimed or killed in the
line of their duties.
The Bank makes a significant contribution to cycling
development in Russia. It sponsors the “Katyusha”
professional cycling team, seven sportsmen from
which were capped for Russia in a team picked for the
World and European Championships in 2008, as well
as the Olympics.
In 2009, Novikombank will continue to play an active
part as the initiator of and participant in many chari-
table projects, upholding the priorities of a socially
responsible policy.
Novikombank | Annual Report 200832
Summarised Financial Information
Summarised
Financial Information
Extracted From a Full Set
of Audited Financial
Statements
for the year ended
31 December 2008
33Summarised Financial Information
Independent Auditors’ Report
To the Shareholders of Joint-Stock Commercial Bank “NOVIKOMBANK”
We have audited the financial statements of Joint-Stock Commercial Bank
“NOVIKOMBANK” (the “Bank”) as at and for the year ended 31 December
2008, from which the accompanying summarised financial information
was derived, in accordance with International Standards on Auditing.
In our report dated 23 June 2009 we expressed an unqualified opinion on
the financial statements from which this summarised financial information
was derived.
In our opinion, the summarised financial information is consistent, in all
material respects, with the financial statements from which it was derived.
For a better understanding of the Bank’s financial position as at 31
December 2008 and its financial performance and its cash flows for the
year then ended and the scope of our audit, the summarised financial
information should be read in conjunction with the financial statements
from which the summarised financial information was derived, and our
audit report thereon.
ZAO KPMG
23 June 2009
ZAO KPMG
Naberezhnaya Tower Complex, Block C
18 Krasnopresnenskaya Naberezhnaya
Moscow 123317
Russia
Telephone +7 (495) 937 4477
Fax +7 (495) 937 4400/99
Internet www.kpmg.ru
ZAO KPMG, a company incorporated under the Laws of the Russian Federation and a
member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss cooperative.
Novikombank | Annual Report 200834
Income Statement for the year
ended 31 December 2008
2008 2007
RUR’000 RUR’000
Interest income 3,212,090 2,529,957
Interest expense (1,652,544) (1,171,727)
Net interest income 1,559,546 1,358,230
Fee and commission income 181,831 165,070
Fee and commission expense (8,269) (2,186)
Net (loss)/gain on financial instruments at fair value through profit or loss (1,161,581) 32,813
Net foreign exchange income 238,182 42,369
Effect of the Bank’s group reorganisation — 105,402
Dividend income 18,012 18,406
Other income 11,169 13,889
Net non-interest (loss)/income (720,656) 375,763
Impairment losses (308,906) (163,906)
General administrative expenses (580,925) (497,226)
(Loss)/profit before taxes (50,941) 1,072,861
Income tax benefit/(expense) 10,077 (297,749)
Net (loss)/profit (40,864) 775,112
S. Ablyaev T. Sviridova
Acting president Chief Accountant
23 June 2009 23 June 2009
Moscow Moscow
This summarised financial information should be read in conjunction with the financial state-
ments from which it was derived.
Summarised Financial Information
35Summarised Financial Information
Balance Sheet
as at 31 December 2008
2008 2007
RUB’000 RUB’000
ASSETS
Cash and cash equivalents 5,688,268 651,404
Obligatory reserves in the Central Bank of the Russian Federation 87,362 649,423
Placements with banks and other financial institutions 1,532,373 1,152,637
Financial instruments at fair value through profit or loss
Held by the Bank 954,332 10,111,336
Pledged under sale and repurchase agreements — 142,404
Amounts receivable under reverse repurchase agreements — 1,345,656
Loans to customers 18,222,482 15,904,823
Available-for-sale assets
Held by the Bank 2,717,032 24,080
Pledged under sale and repurchase agreements 160,350 —
Held-to-maturity investments 2,214,699 —
Investments in associated company 25,000 —
Property and equipment 287,478 273,003
Other assets 121,640 81,351
Total assets 32,011,016 30,336,117
LIABILITIES AND SHAREHOLDERS’ EQUITY
Financial instruments at fair value through profit or loss — 3,869
Deposits and balances from banks and other financial institutions 2,520,530 1,624,442
Amounts payable under repurchase agreements 115,435 130,286
Current accounts and deposits from customers 18,687,505 17,505,904
Promissory notes issued 3,178,152 5,358,744
Subordinated loans 2,060,822 1,063,926
Other borrowed funds 596,269 584,322
Other liabilities 79,076 45,345
Deferred tax liability 212,171 411,052
Total liabilities 27,449,960 26,727,890
SHAREHOLDERS’ EQUITY
Share capital 573,350 498,350
Share premium 2,173,964 648,839
Revaluation reserve for property and equipment 193,960 179,094
Revaluation reserve for available-for-sale assets (621,298) —
Retained earnings 2,241,080 2,281,944
Total shareholders’ equity 4,561,056 3,608,227
Total liabilities and shareholders’ equity 32,011,016 30,336,117
This summarised financial information should be read in conjunction with the financial state-
ments from which it was derived.
Novikombank | Annual Report 200836
Statement of Cash Flows
for the year ended 31 December 2008
2008 2007
RUR’000 RUR’000
CASH FLOWS FROM OPERATING ACTIVITIES
Interest and fee and commission receipts 3,143,005 2,646,844
Interest and fee and commission payments (1,622,617) (1,132,983)
Net (payments)/receipts from financial instruments at fair value through profit or loss (1,127,477) 45,511
Net (payments)/receipts from foreign exchange (232,581) 93,037
Other income 11,169 13,889
General administrative expenses (626,663) (512,853)
Dividend income 18,012 18,406
(437,152) 1,171,851
(INCREASE)/DECREASE IN OPERATING ASSETS
Due from the Central Bank of the Russian Federation 562,061 (111,080)
Placements with banks and other financial institutions (246,777) 185,157
Amounts receivable under reverse repurchase agreements 1,344,161 (1,045,499)
Financial instruments at fair value through profit or loss 6,284,019 (2,773,423)
Loans to customers 336,420 (1,900,818)
Available-for-sale assets (2,039,641) (24,080)
Held-to-maturity investments (2,175,360) —
Other assets (50,205) 152,754
INCREASE/(DECREASE) IN OPERATING LIABILITIES
Deposits and balances from banks and other financial institutions 842,407 (303,845)
Amounts payable under repurchase agreements (15,028) (256,326)
Current accounts and deposits from customers 1,009,283 5,911,334
Promissory notes issued (2,347,586) (1,635,860)
Other liabilities (1,400) (145,902)
Net cash provided from/(used in) operating activities before taxes paid 3,065,202 (775,737)
Taxes paid (17,321) (141,659)
Net cash provided from/(used in) from operating activities 3,047,881 (917,396)
This summarised financial information should be read in conjunction with the financial state-
ments from which it was derived.
Summarised Financial Information
37Summarised Financial Information
Statement of Cash Flows for the year
ended 31 December 2008 (Continued)
2008 2007
RUR’000 RUR’000
CASH FLOWS FROM INVESTING ACTIVITIES
Net purchases of associates (25,000) —
Net purchases of property and equipment (24,937) (6,279)
Net cash used in investing activities (49,937) (6,279)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of share capital 1,600,125 —
Net cash provided from financing activities 1,600,125 —
Net increase/(decrease) in cash and cash equivalents 4,598,069 (923,675)
Effect of changes in exchange rates on cash and cash equivalents 438,795 (9,222)
Cash and cash equivalents at the beginning of the year 651,404 1,584,301
Cash and cash equivalents at the end of the year 5,688,268 651,404
This summarised financial information should be read in conjunction with the financial state-
ments from which it was derived.
Novikombank | Annual Report 200838
Statement of Changes in Shareholders’ Equity
for the year ended 31 December 2008
Sh
are
ca
pit
al
Sh
are
pre
miu
m
Re
va
lua
tio
n r
e-
serv
e f
or
pro
pe
rty
a
nd
eq
uip
me
nt
Re
va
lua
tio
n r
e-
serv
e f
or
av
ail
ab
le-
for-
sale
ass
ets
Re
tain
ed
e
arn
ing
s
To
tal
RUR’000 RUR’000 RUR’000 RUR’000 RUR’000 RUR’000
Balance at 1 January 2007 498,350 648,839 — — 1,506,832 2,654,021
Net income for the period — — — — 775,112 775,112
Revaluation of property and equip-ment, net of deferred tax liability of RUR 56,556 thousand — — 179,094 — — 179,094
Total income and expenses for the year 954,206
Balance at 31 December 2007 498,350 648,839 179,094 – 2,281,944 3,608,227
Net loss for the period — — — — (40,864) (40,864)
Revaluation of property and equip-ment, net of deferred tax liability of RUR 1,360 thousand — — 5,440 — — 5,440
Net unrealized losses on available-for-sale assets, net of deferred tax asset of RUR 155,324 thousand — — — (621,298) — (621,298)
Effect of change in the income tax rate on deferred taxes — — 9,426 — — 9,426
Total income and expenses for the year (647,296)
Shares issued 75,000 1,525,125 — — — 1,600,125
Balance at 31 December 2008 573,350 2,173,964 193,960 (621,298) 2,241,080 4,561,056
This summarised financial information should be read in conjunction with the financial state-
ments from which it was derived.
Summarised Financial Information
39
Full name:
Joint-Stock Commercial Bank
“NOVIKOMBANK”
Brief name:
JSCB NOVIKOMBANK
Certificate of the bank’s inclusion
in the register of banks participat-
ing in the statutory deposit insur-
ance system of 2 December 2004,
under No. 254.
Licences:
General licence to conduct
banking operations
Licence place of issue: Moscow
Name of the licensing authority:
Central Bank of the Russian
Federation
Licence No.: 2546
Licence issue date and validity:
23 September 2002,
valid indefinitely
Licence for performing banking
activities with precious metals
Licence place of issue: Moscow
Licensing authority: Central Bank
of the Russian Federation
Licence No.: 2546
Licence issue date and validity:
3 October 2002, valid indefinitely
Licence of professional partici-
pant of the securities market for
brokerage activities
Licence place of issue: Moscow
Licensing authority: Federal
Securities Market Commission
Licence No.: 177-06439-100000
Licence issue date and validity:
25 February 2003,
valid indefinitely
Licence of professional partici-
pant of the securities market
for dealing activities
Licence place of issue: Moscow
Licensing authority: Federal
Securities Market Commission
Licence No.: 077-06443-010000
Licence issue date and validity:
25 February 2003,
valid indefinitely
Licence of professional partici-
pant of the securities market
for depository activities
Licence place of issue: Moscow
Licensing authority: Federal
Securities Market Commission
Licence No.: 177-06450-000100
Licence issue date and validity:
25 February 2003, valid indefinitely
Licence of professional partici-
pant of the securities market
for securities management
Licence place of issue: Moscow
Licensing authority: Federal
Financial Markets Service
Licence No.: 177-10203-001000
Licence issue date and validity:
24 May 2007 to 24 May 2010
Licence of the stock exchange
intermediary for futures and
options transactions at stock
exchanges
Licence place of issue: Moscow
Licensing authority: Federal
Financial Markets Service
Licence Nos.: 1908, 1909,1910,
2138
Licence issue date and validity:
7 October 2008, valid indefinitely
(Nos. 1908, 1909, and 1910),
10 June 2009, valid indefinitely
(No. 2138).
General Information
Novikombank | Annual Report 200840
Licence for activities involving
state secrecy information
Licence place of issue: Moscow
Licensing authority: Russian
Federal Security Service
Department for Moscow
and the Moscow Region
Registration No.: 7797
Licence issue date and validity:
from 14 September 2005
to 14 September 2010
Licence to take measures
and/or provide services
to protect state secrecy
information
Licence place of issue:
Moscow
Licensing authority: Russian
Federal Security Service
Department for Moscow
and the Moscow Region
Registration No.: 7798
Licence issue date and validity:
from 21 September 2005
to 14 September 2010
Licence for distribution
of encoding devices
Licence place of issue: Moscow
Licensing authority: Russian
Federal Security Service Centre for
State Secret Licensing, Certification
and Protection
Registration No.: 3624 R
Licence issue date and validity:
29 December 2006
to 29 December 2011
Licence to perform
technical maintenance
of encoding devices
Licence place of issue: Moscow
Licensing authority:
Russian Federal Security Service
Centre for State Secret Licensing,
Certification and Protection
Registration No.: 3623 Х
Licence issue date and validity:
29 December 2006
to 29 December 2011
Licence to render information
encoding services
Licence place of issue: Moscow
Licensing authority: Russian
Federal Security Service Centre
for State Secret Licensing,
Certification and Protection
Registration No.: 3625 U
Licence issue date and validity:
29 December 2006
to 29 December 2011
General Information
Contact information:
JSCB NOVIKOMBANK
4/4 Yakimanskaya Emb., Bld. 2, Moscow, 119180
Tel.: (495) 974-71-87
(499) 230-33-43
Fax: (495) 969-20-65
www.novikom.ru
Annual
Report
2008
Our work is focused on providing services
and loans to Russian industrial enterprises.
We offer our customers cutting-edge financial
technologies that promote industrial growth
and the upgrading of the Russian economy.
The principal values we base our operations
on are reliability, quality, efficient growth and
responsible partnership in relations
with customers.