In 2017, the net loss of Vneshekonombank (VEB) increased 2.6 times compared to 2016 to 287.7 billion rubles, the development bank said on Friday. This is the record for the entire time of its existence. VEB had to create reserves when transforming the old loan portfolio, the state corporation explains. The cost of creating provisions for the depreciation of assets in 2017 is not much different from the loss, they amounted to 250 billion rubles, which is more than twice less than in 2016 (then 510 billion rubles was spent on reserves). Provisions to secure the loan portfolio decreased from 489 billion rubles. in 2016 to 226 billion rubles.
Operating profit of VEB Group for 2017 - before the creation of reserves - amounted to 25.5 billion rubles. VEB's capital adequacy ratio as of the end of 2017 was 10.8% (11.6% in 2016), and by the end of March it reached 13.1%.
VEB's assets for 2017 decreased by 5.5% to 3.38 trillion rubles, liabilities - by 1.2% and are now valued at 2.98 trillion rubles. In terms of clearing the balance, the results are good, said VEB's first deputy chairman Nikolai Tsekhomsky. VEB did not want and does not want to create a bank of bad debts, that is, to conduct every doubtful asset through bankruptcy, he said, the assets are not bad, but huge debts will not allow them to go out for free.
The largest share of the reserves was accounted for by loans for "project financing" - this segment accounts for 56% of loans to VEB customers before deducting reserves, says expert "Expert RA" Stanislav Volkov. Despite the decline in assets, VEB increased its operating expenses, including staff costs, which may be due to the launch of new products and activation of work with distressed assets, he believes.
Compare the same VEB's loss for 2017 with the result for 2016 is not entirely correct, says Fitch analyst Anton Lopatin. In 2016, VEB received from the state 212 billion rubles. subsidies, he recalls. Another 184 billion rubles. - from the transfer of problem loans under the guarantee of the state in a specially created fund, says Moody's analyst Lev Dorf. If you remove these two effects, VEB's loss in 2016 would be about 500 billion rubles, that is, more than in 2017, Lopatin estimated.
In October 2016, the VEB Supervisory Council approved the creation of a non-profit organization "Industrial Assets Fund" (100% subsidiary of VEB) to transfer to it the problematic industrial assets: the Industrial Union of Donbass, the coal holding Sibuglemet and others, told Vedomosti "The interlocutor close to the Supervisory Board. In the summer of 2016, VEB management called loans of 1.5 trillion rubles. "Unrecognized loss." In general, these are losses from VEB's special projects, which include Ukrainian loans, Olympic construction projects and losses of VEB-leasing. Tsekhomsky declined to comment on the further fate of these debts on Wednesday, indicating that "VEB-leasing" as early as 2018 can show profits.
VEB is still very much dependent on state assistance. In 2018, the bank, however, has already spent almost the entire annual subsidy from the budget - 100 billion rubles. - on payments on external debts, Tekhomsky reported to Vedomosti. VEB, according to his data, received in the first quarter more than 95.6 billion rubles. For this year, the peak of payments for VEB's debts falls: everything has to be paid $ 2.9 billion, $ 2 billion of them - on eurobonds (in 2019 - about $ 1 billion for ruble bonds), the bank said in its IFRS statements for nine months. In 2017 VEB coped: in February, the issue of Eurobonds for $ 750 million was repaid, and in November - for $ 600 million.
Last summer, the government, however, cut VEB's budget assistance from 150 billion to 100 billion rubles. It will be difficult to pass repayments, the state corporation's manager complained to Vedomosti last year. It will be necessary to refinance external debts at the expense of other market sources or to reduce support for the economy, as one of the risks for a bank cut off from Western financial markets is the repayment of external debt, the bank's representatives also said. The fact that the government lays out VEB's annual support of 100 billion rubles. - a comfortable level for the repayment of external loans, Lopatin believes, while VEB will gradually create reserves from new capital, covering problem assets.
For reduction of the help the government has promised to place in state corporations up to 200 billion rbl. free budget funds for a year with a possible extension. But the decision has not yet been made, Stanislav Prokofiev, the deputy head of the Federal Treasury, told Vedomosti.