Учебная работа. Foreign banks in the Russian financial market
Foreign banks in the Russian financial market
Federal State-Funded Educational Institution of Higher Education
FINANCIAL UNIVERSITY UNDER THE GOVERNMENT OF THE RUSSIAN FEDERATION
(Financial university)Financial Facultyfinance Department
Graduate qualification thesisthe topic: «Foreign banks in the Russian financial market»course: 080100 Economicsprofile: International finance
Prepared by IFF 4-2 studentM.V.:A.S., Associate professor
— 2015
Contents
Introduction
Chapter 1. The legal and economic framework for the activities of foreign commercial banks in Russia
.1 The role and place of foreign commercial banks in the Russian banking system
.2 Legal regulation of the activities of foreign commercial banks
.3 Features of the Russian financial market
.4 The role and place of foreign banks in the credit and stock market2. Operation and methods to reduce the risks associated with the activities of Raiffeisen in the financial market of the Russian Federation
.1 Position of Raiffeisen in the market of the Russian Federation
.2 Services of foreign banks in the financial market on the example of Raiffeisen
.3 Risks related to activity in financail marketof references
Introduction
bank financial market
With the development of market relations and the financial market in the last 10-15 years, national economies are becoming more open to foreign companies and, in particular, for a Foreign banks are looking for new markets. Banks with foreign capital operate in the non-domestic market for different purposes: the search for new markets, hedging risks in their own market and to attract additional capital. Expansion of activity leads to an increase of related risks, such as liquidity and the possible increase in the outflow of funds. Therefore, the degree of involvement of banks with foreign capital must be accompanied by the development of legislation in this area ie the constant improvement of the monitoring system, taking into account that the Russian specifics are not always happen in practice.relative openness of the Russian banking market makes it attractive for foreign capital investors, but this simplicity seems misleading, as banks are forced to deal with increased risks.research is due to the increased role of banks with foreign capital and their possible impact on the Russian economy as a whole. As the Russian consumer often assumes that the foreign bank is more reliable institution for investment funds, such a scenario is quite acceptable.: to analyze the activities and services of foreign banks and the consideration of approaches to managing the risks inherent to foreign banks operating in the domestic market.order to achieve the objectives of the study the following tasks:
) To analyze the theoretical approaches and the classification of banks with foreign capital;
) To study the regulations governing the activities of foreign commercial banks;
) To analyze the current activity of banks with foreign capital, for example, "Raiffeisenbank";
) To allocate and characterize the current bank services and their impact on the total loan portfolio of the bank;
) Describe the current practice of risk management in a foreign bank.object of study: the activities of commercial banks in the foreign domestic banking market.of research: the operation and services of banks with foreign capital and management of the risks associated with conducting business.theoretical basis for the study is the textbooks and manuals on banking and banking operations of various Russian authors — Ya.M.Mirkina, O.I.Lavrushina, S.L.Ermakova, A.M.Tavasieva, A.I.Balabanova, E.F.Zhukova, L.P.Krolivetskoy, G.N.Beloglazovoy and many others.sources of relevant statistics are open access materials on the Bank of Russia, "Raiffeisenbank" Portal «banki.ru». Also, as the information base used analytical data rating agency "Expert RA" and «Standard & Poors».accordance with the objectives of the study the structure of the work consists of two chapters. The first chapter analyzes carried out theoretical approaches to the concept and classification of foreign banks; formulated the concept of the bank with foreign capital, the conditions and reasons for creating the financial structure in the domestic market; studied regulations governing the implementation of the activities of banks with foreign capital; A classification and characterization of the identities of the Russian banking market.the second chapter done analysis of the structure and activities of foreign commercial banks, revealed the basic services; shows the characteristics of the risks faced by banks with foreign capital and highlighted methods of dealing with them.
Chapter 1. The legal and economic framework for the activities of foreign commercial banks in Russia
.1 The role and place of foreign commercial banks in the Russian banking system
the mid-1980s, the level of participation of foreign capital in the development of national banking systems were very limited. Despite the partial decrease of the ban on the movement of capital and an increase in foreign trade, many countries, both developing and industrialized, have continued to follow to the already traditional principle of protectionism.total number of restrictions on market access and national treatment, used in world trade in financial services in the mid-1990s — before the adoption of the agreements on the liberalization of financial services under the General Agreement on Trade in Services (GATS), exceeded 11 thousand. Of these, dominant part accounted for the banking services. Most countries impose legal restrictions on the activities of foreign banks in the territory., the shift toward internationalization of financial intermediation affected states with mature market economies. Then, for the next 15 years financial markets in many developing countries and countries with economies in transition began to open to external participants. In the first place, this phenomenon manifested itself in the expansion of foreign banks, reflected in an increase in their share of the assets and capital of national banking systems. Especially pronounced this tendency was observed in the Eastern European countries in transition to a market economy, and in Latin America. To a lesser extent this process affected countries in Asia and Africa.many ways, the process of trade liberalization and the provision of financial services on an international scale were associated with the formation of a new global trade and financial architecture. Regulatory agencies, opening access to foreign capital in the national market of banking services, guided by several considerations. Firstly, it was a desire to create favorable conditions for the inflow of foreign investments. Secondly, a willing to make an increase in the level of competition and encourage efficiency of doing business. Thirdly, the entry of foreign banks means import of advanced technologies, which is followed by a general institutional strengthening of the financial sector. Fourth, foreign banks could be regarded as one of the channels of inflows to other sectors, and their presence would be considered as one of the factors of economic growth.of foreign banks, coming into a new market, deserves special attention. The main essence for foreign banks to enter new markets is an opportunity to profit from operations in the local market. Integration between the economies of the countries of origin and the country — the object of investment is another As a result, banks, wishing to offer a wide range of services, forced to expand the scope of its activities and provide services where their customers look for it;
Found a business in another country requires a very substantial capital investment, especially if there is a high legislative strap on market entry in this country, and "economies of scale" in this case becomes essential;characteristic is that large banks yielding portfolio management operations also involve increasing the number of points of presence in foreign markets.of foreign banks, of course, is a serious risk to local banks. Decline in yield on operations makes it difficult to increase capital base for domestic banks, which in growing markets is rather weak. This can have a destabilizing effect on certain national financial system. Therefore, increasing the participation of foreign capital must be accompanied by improvement of the system of prudential supervision, in order to prevent rapid decline in the efficiency of the local institutions, which can not compete with multinational banks. In addition, possibility to increase the capital base and the impact on the profitability could be associated with an additional risk factor that can have its impact on the quality of the loan portfolio. This is due to the fact that the first-class domestic borrowers willing to apply more to cheaper resources provided by foreign banks., upon the occurrence of tough economic time, the presence of foreign banks may have a stabilizing or destabilizing effect. On the one hand, foreign banks, relied heavily on foreign resources, are more resistant to internal shocks. On the other hand, in the case of a threat of banking crisis there may be an option when investors consider foreign banks as a safe haven and begin a massive withdrawal of funds from local banks, making the position of national organizations even worse.for the impact of foreign banks on other sectors of the economy, there can be mentioned largely positive moments. Firstly, economic agents have access to a quality banking products. Secondly, increase in competition in the financial services sector means greater choice for borrowers and banks’ customers, reducing the cost of cash management services. All this should have a positive impact on corporate and economic growth.the last 10-15 years under the influence of liberalization of capital movements and the globalization of financial markets, the situation has radically changed. Nowadays, most of the countries dont set any barriers for entering the national system. However, the level of participation of credit institutions with foreign participation vary significantly depending on the configuration of the legislative, institutional and economic conditions in a given country. In this sense, the experience of each country’s procedures for the approval of foreign banks and the degree of influence on the restructuring and modernization of the system of financial intermediation can not be same.is no exception. The feature of our country is that in the public mind was confirmed false impression that the Russian authorities prevent the inflow of foreign capital into the banking sector. In fact, the conditions and procedure for access of non-residents in the domestic banking system in many respects softer than in most other countries. In essence, Russia has acted and continues to act moderately liberal approach to the registration and licensing of credit institutions with foreign capital., there is only one unresolved fundamental issue, which concerns the inability to open branches of foreign banks in the Russian Federation, avoiding the creation of a subsidiary bank. The government and the Central Bank of the Russian Federation based on the fact that at the current stage of development of the banking sector establishment of branches of foreign banks, by passing institution subsidiary bank, should be considered premature. This concept comes through the idea that same level of competition should be provided for all credit organizations and to prevent the market of banking institutions with a negative business reputation. In all other points of the conditions of admission of non-residents in the Russian banking system fit into global licensing practices of banking activities and do not cause significant objections on the part of foreign investors.of October 1, 2009 on the territory of the Russian Federation acted more than 150 credit institutions with non-residents. In total in Russia at that date the number of credit institutions has reached more than 1300. Thus, foreign capital is present in the ownership structure of each tenth of the current bank. It is important to note that the majority of banks with foreign capital have been recognized by the Central Bank financially sustainable in the selection of banks in the deposit insurance system and have a license to take deposits from individuals.institutions with the participation of non-residents located in 30 regions of the Russian Federation, including 85 credit institutions (or 64.9% of the total) are located in Moscow.of banks with foreign participation are predominantly associated with Moscow. There are registered approximately 85 credit institutions, or 65% of the total. Concentration ratio of foreign capital also demonstrates the imbalance in the distribution of investments in the authorized capital of Moscow and other Russian regions. Thus, Moscow accounts for over 90% of the total foreign participation in the authorized capital of banks.major part of foreign investments in the Russian banking sector accounted for west European countries — 96.6%. The leaders in the size of investments are Germany, France, USA, Austria, the Netherlands and Turkey. The leading role of the German capital in the Russian banking system (25% of all foreign investments) reflects the status of Germany as a major economic partner of Russia.nature of the involvement of foreign capital in the Russian banking sector is quite diversified. First of all, the separation can be performed by size interests of non-residents in the authorized capital of the Bank:40 credit institutions authorized capital formed at the expense of non-residents by 100%. Contributions of non-residents to the authorized capital of banks in this group make up 40.4 billion Rubles (nearly 1.5 billion. Dollars.). Or 87.6% of total foreign investment. 9 credit institutions have a share of non-residents in the authorized capital of more than 50% but less than 100%. In 13 banks foreign participation varies from 20 to 50%. In 69 credit institutions share of non-residents is negligible (less than 20% of the share capital)., 62 credit institutions with non-resident participation in the authorized capital from 20 to 100% (or 47.3% of the total number of credit institutions with foreign investment), in which non-residents can have a decisive or a noticeable impact on the decision making process, we have 44, 5 billion. Rubles, or 10.6% of the total authorized capital of the banking system and 96.5% of total foreign investment in the authorized capital of Russian credit organizations.we compare the current distribution of banks according to the size of their participation in the capital of non-residents with existing after the financial crisis of August 1998, we can see that the greatest changes affected the group of credit institutions, in which the proportion of non-residents is 20 to 50% . Since January 1999, the number of banks with foreign participation decreased by more than 2 times. Against this Background, the number of banks with 100% contribution of non-residents in the managing capital from 18 to 40 (see. Fig. 3):the banks, under the effective control of non-residents (more than 50% of the share capital), now account for over 90% of all foreign investment in the banking sector. This includes subsidiaries of the 10 banks of the thirty largest banks in the world in terms of assets, in particular the leaders of the world banking business — Citicorp, Deutsche Bank, BNP Paribas, Societe Generale.two opposite tendencies suggest that the Russian foreign founders try not to involve local partners to create a subsidiary bank, but prefer to fully control it.
1.2 Legal regulation of the activities of foreign commercial banks
Regulation of relations in the banking sector, due to the special significance for the country’s economy, falls under the jurisdiction of the Russian Federation Russian Federation. By law governing relations in this sphere should be subject to special requirements:
clarity
balance
enforceability
strict legal compliance and enforcement measures of legal responsibility in case of unattended, or abuse. Fundamental, basic source of banking legislation is the Constitution of the Russian Federation."g" Art. 71 of the Constitution of the Russian Federation is directly related to the conduct of the Russian Federation to establish the legal framework of the single market; financial, currency, credit, customs regulation, money issue, the principles of pricing policy; federal economic services, including federal banks. According p. 1, Art. 76 of the Constitution of the Russian Federation on matters under the jurisdiction of the Russian Federation federal constitutional laws and federal laws.accordance with Part. 1, Art. 8 of the Constitution of the Russian Federation in the Russian Federation the integrity of economic space, free movement of goods, services and financial resources, support for competition and freedom of economic activity.norms derive their development, detailing the provisions of the relevant federal laws. With regard to the banking law occupy the central place of the Federal Law December 2, 1990 N 395-1 "On Banks and Banking Activity" (hereinafter — the Law on Banks and Banking) and the Federal Law of July 10, 2002 N 86-FZ "On the Central Bank of the Russian Federation (Bank of Russia)."accordance with Art. 2 of the Law on Banks and Banking elements of the Russian banking system are credit institutions, as well as branches and representative offices of foreign banks. In the dictionary of the Russian language, the term "system" is defined, in particular, as "something whole, represents the unity of natural and are located in the concatenation of parts." Given this interconnection underdevelopment of its individual elements prevents the achievement of a harmonious state of the whole system.you know, over the past years, Russian officials have made repeated statements about the inadmissibility of the opening of branches of foreign banks in Russia, which is confirmed by the practice of the Bank of Russia., the legislation contains the necessary set of rules for the creation and operation of branches of foreign banks in the Russian Federation.on the content of art. 55 of the Civil Code of the Russian Federation (hereinafter — the Civil Code), a branch of a foreign bank is a separate division of a foreign credit institution located outside of its location and performing all its functions, or part thereof, including the function of representation.this definition it follows that the branch is not a legal entity and has no independent standing in contrast to creating its foreign credit institution. However, as a general rule branch of a foreign credit institution shall have a wide range of powers to carry out banking operations and transactions within the system of national banking legislation, where it is created.to Article 17 of the Federal Law "On Banks and Banking" from 2.12.1990 №395-1 (Ed. Of 30.12.2008) for the state registration of credit organizations with foreign investments and foreign bank branch and ability to receive a license to conduct banking operations in addition to the documents referred to in Article 14 of this Federal Law, additionally submit duly executed documents listed below.entity is:
) a decision on his participation in the creation of a credit institution in the territory of the Russian Federation or to open a branch of the bank;
) a document confirming the registration of legal persons and balance sheets for the three previous years, confirmed by the auditor’s report;
) the written consent of the supervisory authority of the country of his whereabouts to participate in the creation of a credit institution in the territory of the Russian Federation or to open a branch of the bank in cases where such permission is required under the law of the country of his residence.person is a first-class confirmation (according to international practice) a foreign bank solvency of that person.14 of the Federal Law "On Banks and Banking» 2.12.1990 №395-1 (Ed. Of 30.12.2008) states that for the state registration of the credit institution and obtain a license to conduct banking operations, the Bank of Russia in the established procedure, the following Documents:with a written confirmation of a state registration of a credit institution and a license to conduct banking operations; The statement shall contain information about the address (location) of the permanent executive body of the credit institution;
The memorandum of association (original or notarized copy) if its signing by federal law;
the statute (original or notarized copy);plan, approved by the meeting of the founders (participants) of the credit organization, minutes of the meeting of the founders (participants), containing a decision on approval of the charter of a credit institution, as well as candidates for appointment to the post of the head of the credit organization and the chief accountant of the credit organization. The procedure for preparing a business plan of the credit institution and its evaluation criteria established by normative acts of the Bank of Russia;confirming payment of state duty for state registration of credit institutions and for the provision of a license to conduct banking operations when creating a credit institution;of documents on state registration of the founders — legal entities, the auditor’s report on the reliability of financial reporting and the tax authorities confirm execution founders — legal entities liabilities to the federal budget, budgets of subjects of the Russian Federation and local budgets for the last three years;(according to the list established by regulations of the Bank of Russia), confirming the sources of funds introduced by the founders — physical persons in the authorized capital of the credit institution;of candidates for the post of the head of the credit organization, chief accountant and deputy chief accountant of the credit institution, as well as head and deputy head, chief accountant and deputy chief accountant of the branch of a credit institution. These profiles are filled with these candidates personally and must contain the information specified in the regulatory acts of the Bank of Russia, as well as information:presence of these persons higher legal or economic education (with the submission of a copy of the diploma or an equivalent document) and the experience of managing a department or other division of the credit organization related to the implementation of banking operations, at least one year, and in the absence of special education — management experience so division of at least two years;presence (absence) of a criminal record.view of the above in the case of a branch of a foreign credit institution would have received the right to exercise on the territory of the Russian Federation, some or all of the following banking operations and transactions referred to in Art. 5 of the Law on Banks and Banking:
Raising funds from individuals and legal entities to deposits (demand deposits and time deposits) and placement of funds on its own behalf and at his own expense;
open and maintain bank accounts of individuals and legal entities;
settlements on behalf of individuals and legal entities;
collection of cash, bills, payment and settlement documents and cash services to natural and legal persons;
purchase and sale of foreign currency in cash and cashless forms;
attract deposits and placement of precious metals;
issuance of bank guarantees;
make money transfers on behalf of individuals without opening bank accounts (except for postal orders);
issue of guarantees for third parties providing the fulfillment of obligations in cash;
acquisition of the right to claim from a third party fulfillment of obligations in cash;
trust funds and other property under contract with individuals and legal entities;
operations with precious metals and precious stones in accordance with the legislation of the Russian Federation;
lease of natural and legal persons of special facilities or are they safe for storing documents and valuables;
leasing operations;
consulting and information services.the implementation of some of these banking operations and transactions require special licenses. In addition, attracting funds of individuals and legal entities to deposits is possible only in case if the requirements stipulated by the Federal Law of 23 December 2003 "On Insurance of Household Deposits in Banks of the Russian Federation." These requirements include the presence of a foreign credit institution license from the Bank of Russia and the formulation of foreign credit institutions registered in the deposit insurance system in accordance with Art. 28 of the Law on Deposit Insurance. addition to the general requirements for the establishment of credit institutions in the Law on Banks and Banking establishes additional regulatory requirements for the establishment and operation of branches of foreign banks. Therefore, domestic legal scholars rightly pointed out that state as a rule do not have the right to refuse a foreign bank in the creation of the Russian branch, citing his refusal as unreasonableness.
For example, the Bank of Russia stopped issue of licenses to carry out banking transactions with foreign investment banks, branches of foreign banks when the quota of foreign capital in the banking system of the Russian Federation. Should be mentioned that quota is calculated as the ratio of the total capital held by non-residents in the authorized capital of credit institutions registered in the Russian Federation. Consequently, one of the necessary conditions for the establishment of quotas is the presence of branches of foreign banks. However, the quota of foreign capital in the Russian banking system is not defined, and is also a result of the Bank’s Russia policy on an unofficial ban on the establishment of branches of foreign banks in the Russian Federation.
Thus, the above statutory provisions do not prescribe nor prohibit the creation of the territory of the Russian Federation, branches of foreign banks. This leads to uncertainty in the legal regulation of credit institutions, by virtue of which is one of the shortcomings of the existing system of banking legislation.
1.3 Features of the Russian financial market
any country, the financial market is a mechanism for allocation and reallocation of capital (long-term returns) between lenders and borrowers through intermediaries, including banks. The method by which it is possible to influence the distribution and redistribution of capital between the agents of the economy based on supply and demand, are financial instruments. Thus, the financial instruments have a variety of market product having a financial nature, that is, securities, bonds, foreign currency.financial market is divided into the money market and the capital market. The money market operations are carried out and to provide borrowing available funds of enterprises and population in the short term. On the capital market to borrow funds for long periods. Differences are determined purpose borrowings. The money market serves the sphere of circulation, capital works on it as a means of circulation and payment, which determines the types of financial instruments on the market. Capital market serves the process of expanded reproduction: the capital functions as a self-expanding value.process of accumulation of money capital preceded by a stage of its production. When money capital created and is still in production, it is a pure money-capital. His transfer to other areas of the economy means the acceptance of the form of loan capital. Loan market (as part of the capital market) is able to unite the disparate petty cash, which in itself can not act as money-capital. Combining them in large amounts allows the market to play a greater role in the process of concentration and centralization of production and capital.role of the loan market in the economy manifests itself in three main areas:
) before leaving the loan capital to the private sector, government and the public, as well as foreign borrowers;
) accumulation of free cash capital and cash savings of the population;
) the accumulation and concentration of fictitious capital.the fictitious capital accumulation understood and mobilization of money capital in a variety of securities (the second part of the capital market), which is in contrast to the real capital (in the form of money, equipment) is not a cost, but only the right to receive income. Securities — this monetary documents proving ownership or loan document holder in relation to the person that issued the document (the issuer) and speeding on liability. Independent movement of fictitious capital in the market leads to a sharp separation of the market value of securities on the balance sheet, which further exacerbates the gap between the real material values and their relative cost financed represented in securities., the national financial market consists of three segments:
) Money market (traded cash and other short-term means of payment — bills, checks and other.);
) capital market in the form of short-term and long-term loans provided to borrowers by financial institutions;
) securities market, which is divided into an OTC (primary) and exchange sector, as well as "street" sector.financial market is an organized or informal system of trading in financial instruments. In this market, the exchange of money, credit and capital mobilization. The main role is played by financial institutions, direct the flow of funds from the owners to the borrowers. The goods are the actual money and securities. The financial market is thus intended to establish direct contacts between buyers n sellers of financial resources.certain conditions, and derivative financial instruments (DFI) are created by way of redistribution of capital. Price is determined by the value of DFI of the underlying asset, which can be viewed as a combination of property and cash belonging to the enterprise, firm, company, which invested owners. Consequently, the DFI is the subject of civil rights (Art. 128 of the Civil Code).the present stage of development of market relations in the Russian financial market has the following features:
sharp differentiation degree of development of the regions;
restriction on the range of instruments used;
privileged position of commercial banks in the financial market as the main agents;
lack of willingness on the economic potential of commercial banks themselves to work in an active financial market;
narrowness of the financial market due to its two sectors — the market of foreign currency (US dollars) and equity securities (state short-term and long-term liabilities).
ability to independently control the size of opened intraday currency positions, "on the basis of self-assessment of the acceptable level of currency risk" (p. 15);
the requirement in the case of exceeding the limits ORP hold until the end of the trading day balancing transactions (p. 23);
Compliance with the end of each trading day requirements on the total value of all long (short) open foreign exchange position (no more than 30% of the equity capital (p.10.1) and their values for individual currencies, including the Russian rubles (less than 15% of equity capital (Sec. 10.2).you violate the requirements of the Instruction number 41 the Bank of Russia has the right to apply to violators of the measures under Art. 75 of the Federal Law "On the Central Bank of the Russian Federation (Bank of Russia)."terms of the regulatory and supervisory authority that oversees the activities of credit institutions, including responsible for their currency risks, such an approach and the requirement to comply with AFP objectively justified. However, these requirements are dealt with by credit institutions, in particular the big banks, the burden is not conducive to their monopoly approval to market and reliable delivery possible profits in times of currency corridor makes it easy to predict in their favor difference between the forward and spot rates apply to the Russian Foreign currencies, relatively easy way to eliminate from the market smaller competitors. This pushes them to search for detours. To a large extent their task is made easier by the fact that in Russia there is no system of regulation, whether at the state or self-regulatory levels, the creation and use of new financial instruments.at your own risk or use already existing in the world of financial instruments, including derivatives, not finding the definition and description of any law (Civil Code), either in regulations or adapt them to the already established practice in Russia and the existing national the legal system. As a result of treatment with financial instruments mainly distorted their economic substance and purpose. They are often used as tools bypass the requirements of legislation and regulations.good example is the use of credit institutions calculated forward to evade instructions №41. The nature and sequence of operations carried out by the dealers with the calculated forwards on the futures markets are as follows.concludes with sides a forward deal with a settlement date T + n. Delivery of the underlying asset (mainly foreign currency) is not provided, as side A made aware. On forwards parties arbitrarily set the price of the underlying asset at the date of execution of the conditional transaction T + n. In this case, the parties negotiated, but not properly secured to concluding offset cash transactions in the spot market on the date of execution of the conditional forward transaction T + n on the current in the organized market the current price of the underlying asset. When entering into a forward transaction the parties intend that the date of execution of the conditional forward transaction calculation will be carried out without actual delivery of basic contractual amounts, but only the difference between the forward price and wholesale, while the latter may be a deviation in the and in the opposite direction from the established parties forward price; dealership ticket (offer), confirmation and, accordingly, the agreement, this condition is fixed as follows: "INDEX TO BE NETTED AT MICEX ON VALUE DATE".the conclusion of the settlement striker dealer makes the operation in the transactions for the current trading day only puts his signature on the basis of: Accounting carry out this operation on the balance sheet, the estimated amount of the contract entered into forward calculation of open foreign currency position (in accordance with Instruction №41 Bank Russia). With an active presence in the market dealer and wish to conclude the largest possible number of forwards calculated on the basis of which it is possible, and this he expects to receive a significant profit, it inevitably goes beyond the established AFP. Therefore, market participants found quite original way out to bypass the requirements of the Instruction number 41:
by mutual agreement with the dealer of a third party is homogeneous forward transaction for the amount of the estimated forward, while at the dealership ticket (offer) has repeatedly stated "not real deal" 2;
Dealer third party confirms (accepts) the transaction, but it does not reflect in its registry and consequently in the balance sheet;
dealer based on their ticket and received from a third party dealer confirm the deal makes the roster, puts his signature;
in accordance with the completed and signed them to the registry transaction is recognized in the balance sheet, which leads to a strict "implementation" requirements of the Bank of Russia regarding available to credit institutions AFP., we can conclude that the Russian financial market and the existence of a settlement instruction execution striker number 41 is supported by an operation called "false-wings", the implementation of which, in turn, is possible only if there is collusion between dealers.the date of execution of the conditional forward transaction T + n side of the clearing striker find out the situation with the price of the underlying asset at the spot market to calculate the difference between the forward and spot prices. The reality of the Russian financial market is that the parties have the opportunity to abandon earlier agreement concerning the conclusion of the transaction offset the spot in order to carry out a kind of netting (which, as a rule, parties do not have a separate relevant agreement).for settlement signed striker whose rights and interests are infringed by the transaction, and which faces the need to fulfill its obligations to counterparties to the full amount of the contract, refers to the court (arbitration) for protection., considering the conclusion of the transaction in accordance with applicable law, come to the conclusion that the transaction is not subject to judicial protection, because it is a bet (at the moment in Russia in any of the regulations there is no definition of "bet").failure by the parties obligations under the forward transactions and refusal to enter into spot transactions lead to the formation of a critical mass of systemic risk and that he had repeatedly confirmed events on the global and Russian financial markets, a crisis.is happening now in Russia can be characterized as Beringz-case on a national scale. The current financial market situation requires the permission of Russia. Steps towards this have largely taken by the market participants, not the regulators, since the issues raised mainly deal directly with the operational activities of credit institutions.this regard, we can recommend to participants in financial markets, including credit institutions, to take the following measures:
establish personal (individual) limits on each dealer;
introduce more stringent control over the activities of dealers in the financial markets (to delineate the scope of their activities and the underlying assets or instruments);
organize a system of follow-up with appropriate cancer cords and terms of reconciliation;
develop and establish internal mandatory limits on counterparty for each type of transactions, including futures and related cash transactions;
establish an internal procedure for storing control tapes to enter into transactions for dealers Reiter and recordings of their conversations in the case of transactions over the phone;
a more accurate work on the drafting of legal documents, including agreements to conduct settlement forwards in which to give them legal force in disputes in the courts fail to provide penalties for violations of any of the parties to the earlier achieved agreement on the second portion of the calculated forward;
The internal instructions and documents to apply concepts and terminology used in the Civil Code, in particular relating to the conclusion of contracts (Ch. 28);
adopt internal instructions on the documents upon which to rosters, accounting for transactions in the balance sheet (form number of signatures), and the corresponding workflow.assume that the situation concerns exclusively the financial markets is their internal affair. Regulatory bodies, including the Bank of Russia, also should not remain on the sidelines. Based on the logic of articles previously mentioned federal laws. The Bank of Russia has no right to regulate and control over the activities of credit institutions in the forward market. At the same time n. 7, Art. 5 of the Federal Law "On the Central Bank of the Russian Federation (Bank of Russia)" instructs the Bank of Russia to supervise.the supervision of credit institutions in the art. 55 of this law is "constantly monitors the compliance by credit institutions of banking legislation, regulations of the Bank of Russia, in particular set of required reserves." In this same article prohibits the Bank of Russia to intervene "in the operational activities of credit institutions, except as provided by federal law."should be noted that the Russian credit institutions transactions in the futures market are carried out not only and not so much for its own account. To a large extent they are acting in the market as brokers, that is carrying out operations on behalf of, on behalf of and at the expense of investors, creditors and depositors shifting arising from the futures market risks in the past, not enough versed in the intricacies of it and pitfalls. At the same time the Bank of Russia as a regulatory authority is obliged to the banking system in accordance with Art. 55 of the Act to protect the interests of depositors and creditors.laws and regulations are extremely limited functions of the Bank of Russia in regulation, supervision and control over the activities of the forward market, on the one hand, the regulated — by credit institutions, on the other, — methods. In general, they are reduced to the establishment of mandatory standards and reporting rules (both accounting and statistical) for the banking system (Sec. 5, Art. 4 and Art. 56 of the Federal Law "On the Central Bank of the Russian Federation (Bank of Russia)"). The same article and n. 5, Art. 5 prescribe the Bank of Russia "to establish rules to conduct banking operations, accounting and reporting for the banking system."procedure to establish the Bank of Russia accounting operations conducted by credit institutions in addition to banking, the next. Bodies which federal laws entitled accounting regulation within its jurisdiction, shall promulgate regulations, mandatory for all organizations (legal entities) in the territory of the Russian Federation. However, their regulations must not conflict with regulations and guidelines of the Ministry of Finance. Only after that on the basis of acts adopted by the Bank of Russia establishes accounting for credit institutions engaged in the acts described in the business transaction.the absence of, firstly, the body which has the competence to regulate the activities of all organizations in Russia, conducting operations on the futures market, and secondly, a federal law that creates such a body and to grant him the right to develop regulations and rules applicable to the forward market and regulate accounting, in accordance with the Federal Law "On Accounting", this function should take the Government of the Russian Federation, provides overall methodological guidance of accounting in the country, or to delegate this right to the Ministry of Finance.
.4 The role and place of foreign banks in the credit and stock market
At present, we can say that the role of foreign investors to increase the capitalization of the Russian banking sector is becoming more visible. In 2008, the growth rate of non-resident investment in the authorized capital of operating credit institutions outpaced the growth rate of the total registered share capital of credit institutions. As a result, the share of non-residents in the aggregate authorized capital of credit institutions found an upward trend., it can be stated that the actual extent of the participation of foreign capital in the Russian banking system still remain modest. In comparison with the countries of Central and Eastern Europe the share of banking assets controlled by non-residents in Russia is much lower. As of October 1, 2005, the Bank effectively controlled by non-residents (more than 50% of the share capital) disposed of only 8.5% of total banking assets. In this case, attention is drawn to the fact that this share is in the last 5 years, a downward trend.in the share of non-residents in total assets was largely due to exceptionally high growth of assets of Russian banks, which quickly recovered after the 1998 crisis. In the period of 1999-2009 assets of Russian banks increased by more than 7 times. It is quite clear that against such unprecedented high growth scale business activity of banks with foreign capital, despite an increase in absolute terms, had a downward trend in relative terms.foreign banks, the current situation is largely a transition when the strategy of doing business in Russia can undergo dramatic changes. Statistical data fixes model of "cautious behavior" of foreign capital in the Russian banking sector. Its main feature is an essential imbalance between the potential competitive advantages of the subsidiaries of foreign banks and the real scale of their activities in the Russian banking market., in certain segments of the banking market, credit institutions with predominant participation of foreign capital is already playing a significant role. In particular, this applies to transactions in the interbank market. They account for 22.6% of loans, deposits and other funds placed with banks. Foreign banks are active in the market of corporate clients. They are concentrated in their hands 11.2% of funds raised by the entire banking system of the country, from companies and organizations. Despite the small share of citizens’ deposits in foreign liabilities of banks (3.3% of the total amount of household savings) retail business already actively developing a number of banks controlled by non-residents.and projections indicate that the extent of participation of foreign capital in the Russian banking system, including through mergers and acquisitions, in the near future has increased significantly.situation for many Russian banks is further complicated by the fact that due to the widespread practice of cross-border provision of financial services to the best borrowers represented primarily export-oriented enterprises, go to foreign banks. Even now, it is estimated that approximately 45% of loans granted to enterprises by foreign banks. Due to the increase of the Russian sovereign debt rating to investment grade by three international rating agencies, international banks increased their lending activities of Russian enterprises. In 2009, domestic borrowers were financed by more impressive amount compared to previous years. According to Citigroup, the Russian IPO accounted for 10% of all European stock issues. According to analysts, in the next three years, 200 Russian companies will have enough money to organize IPO.the investment banking activities understands investing in securities on its own behalf and on his own initiative in order to obtain direct (dividends, interest, income from the sale) and indirect (gain control of subsidiaries and affiliates, and others.) income. The objects of investment banking can serve a variety of securities, both equity (shares, bonds) and non-equity (certificates of deposit, bills of exchange). The total quantity of securities owned commercial bank, called portfolio. The securities portfolio of commercial bank has three interrelated functions: increase in value, creating a liquidity reserve and participation in the management of other companies.the fact that the formation of its own portfolio of securities banks use the same tools and management techniques that other investment companies, securities portfolio of commercial bank has the following features.
. The securities portfolio of commercial bank is closely related to the structure of assets and liabilities of the credit institution, which must be balanced with each other in terms.
. The Bank has a certain degree of mobility for the redistribution of its assets in securities and back (in other types of property).
. The securities portfolio of commercial bank is an essential tool for managing interest rate risk.
. The securities portfolio of a commercial bank, as a rule, has a conservative character, manifested in the greatest relative weight of government bonds in the total portfolio.portfolio of equity securities, depending on the purpose of their acquisition are divided into:portfolio;purchased in order to obtain investment income securities are purchased based on their retention of more than 180 calendar daysportfolio;that meet the following requirements:) marketable securities purchased for resale within 180 calendar days inclusive) listed and unlisted securities purchased under agreements providing for the possibility to sell them back within 180 calendar days inclusive) listed and unlisted securities purchased under loan agreements (regardless of the length of the contract and the issuer)controlling interest by the credit institution voting shares in an amount corresponding to a significant impact criteria established by the Bank of Russia from 30.07.2002 N 191-P "On the consolidated financial statements"for classifying securities to a specific portfolio of fixed Rules of accounting in credit institutions located in the territory of the Russian Federation (Bank of Russia from 05.12.2002 N 205-P) (in red. From 11.04.2005).part of the investment banks conduct operations on purchase and sale of securities; attraction of loans secured by purchase of securities; operations involving the sale of rights certified by securities (receipt of interest and dividends, participation in the management of joint stock companies and others.).banking business in Russia has a short history. In fact, its origin can only speak from the late ’90s, when to activate the process of mergers and acquisitions in the economy, passing on legal basis, and the company began to actively enter the stock market in order to attract funding. On the formation of the capital market as such in the country can only speak in general since the 2000s. The main driving force of the market in terms of demand is the need for issuers in the relevant innovation and investment products. In the changing situation on the financial markets of the Russian banks have to expand the range of services to actively expand cooperation with foreign financial institutions. Most popular in recent years has become a "product" as the IPO. This is due to a number of reasons, such as: the need for funding for the development of business owners desire to withdraw from the capital of the company and a number of others. Russian banks and financial companies, being interested in the client, actively developed over the past years, these lines of business. At the same time, of course, there are a number of fairly serious problems., the Russian financial institutions are significantly inferior to foreign in its size, which affects the investor base on the cost of services on the range of services within the IPO., Russian companies themselves prefer to work with foreign financial institutions. On the other hand, there is a certain economic environment, rather than tell — "economic climate" that forms the preference of issuers, the requirements for the selection of the host institution, and the investment bank has been operating in a certain, fairly complex situation. in the Russian scientific community concerning the issues of terminology and concepts, and have not given a definitive interpretation differences between the concepts "investment bank", "investment company" and certainly not resulted in legislative reinforcement of these institutions. The very concept of the investment bank has come to us from the US, where historically since the Great Depression after the adoption of the Glass — Steagall Act in 1933, was erected a stone wall between commercial and investment banks. This model is a segmentation of the financial system is completely opposite pattern prevailing in most European countries, dominated by universal banks. However, it is necessary to mention that in the large European countries such as France and the UK, in fact as to the middle of the 20th century, ie, before the start of a wave of consolidation, mergers and acquisitions in the sector, banking function and operation of the securities market were in charge of different institutions.accordance with Russian law and, in particular, the Federal Law of 22.04.1996 "On the Securities Market" id determining the types of professional activities in the securities market, and those activities dealt with by investment banks in the classical sense, an investment company can be considered a professional securities market participant, which has a license for conducting broker-dealer activities and licenses to manage investment funds. Given the lack of definition of an investment bank in the Russian legislation, many draw the line between the investment bank and investment company in terms of service delivery and asset size.rational approach, but in the future when considering the stated theme will use these concepts as synonyms. It is necessary, however, to mention that the term "investment company" (investment company), as the term itself and investment bank, a transfer. Translation was not quite as successful as its importance in the Russian language does not correspond to the authentic meaning invested in it. In world, practice under the investment company means a company whose activities are directly related to the management of securities: primarily to investment companies there include mutual funds, unit trusts, that is, in fact, collective institutions investment. Thus, we see that these are two completely different things in the world. Since the 1990, all newly formed investment banks began to call investment companies.
Chapter 2. Operation and methods to reduce the risks associated with the activities of Raiffeisen in the financial market of the Russian Federation
.1 Position of Raiffeisen in the market of the Russian Federation
"Raiffeisenbank" part of an international banking group and is a subsidiary bank of Raiffeisen CIS Region Holding GmbH, which is owned by Raiffeisen Bank International AG — a leading universal bank in the financial markets in Austria and Central and Eastern Europe. JSC "Raiffeisen Bank" has been working in Russia since 1996 and offers a full range of services to private and corporate clients, residents and non-residents, in rubles and foreign currency.bank has 6 branches (2013: 6 branches) in the territory of the Russian Federation, as well as 205 separate units (2013: 187 separate subdivisions).to the agency "Interfax — CEA", the results of 12 months 2014 JSC "Raiffeisen Bank" occupies the 13th place in terms of assets, 11th in terms of equity, the 4th largest in terms of retained earnings, 9th place the volume of loans to individuals, 6th place in terms of individuals’ funds among Russian banks."Raiffeisen Bank" is one of the most reliable banks in Russia with one of the best songs of ratings from leading rating agencies: long-term rating by S & P / Moody’s / Fitch — BBB- / Ba1 / BBB (as of 31.12.2014). The main factors that affected in 2014 on the state of the banking industry, in general, you can specify the deceleration of economic growth in Russia, volatility in stock and currency markets, limited access to international capital markets, rising interest rates. As a result, observed reduction in profits in the banking system and the pressure on capital due to the revaluation of foreign currency balances.the context of the difficult economic situation in 2014 Raiffeisenbank demonstrated strong financial performance and improve operational efficiency. By keeping a conservative approach to lending and liquidity management in the period of economic growth, the Bank currently has a substantial margin of liquidity and capital, high profitability and good asset quality. These characteristics allow the Bank to adapt to changes in the operating environment."Raiffeisen Bank" plans to continue to expand its product range, improve service quality and to provide customers with all the business segments of the high-quality services. The key objectives are to improve the Bank quality of service, improved business processes, maintaining long-term relationships with customers.than 56,000 employees service about 14.6 million customers in 2900 its offices. Raiffeisen Bank International is a fully consolidated subsidiary of Raiffeisen Zentralbank Osterreich AG (RZB), which owns about 60.7% of the common stock. The remaining shares are in free float on the Vienna Stock Exchange.position of Raiffeisenbank in Russia is maintained by well-designed and well-implemented business model that takes into account all the features and trends of the Russian banking market and allows you to quickly and timely respond to any fluctuations in the economy.this connection, it is interesting dynamics of the financial condition of a commercial bank in a crisis. We analyze the structure and dynamics of assets of JSC "Raiffeisenbank" in order to determine changes in the directions of the use of own and borrowed funds (Table 2.1).
Articles asset balanceThe amount as of the date of the reportChange in the periodBase period 31.12.13Current period 31.12.14The growth rate,Absolute growth, ths. Rub.Effect on change in total assetsTotal thousand. Rub.Share,%Total thousand. Rub.Share,% Cash154 506 09121,72185 376 92220,7516,6530 870 8313,46Funds in other banks9 787 5791,38153947111,7236,425 607 1320,63Trading securities20 363 2572,869 639 5591,08-111,25-10 723 698-1,20Net loans432 208 11660,76574 089 44264,2724,71141 881 32615,88Net investments in investment securities held to maturity5086550,075097820,060,221 1270,00013Net investments in securities available for sale1 508 8050,2115173230,170,568 5180,001Derivatives and other financial assets95700651,35567766926,3683,14472066275,28Total assets711 372 141100893 279 76510020,36214 851 86324,05Table 2.1 Analysis of the structure and dynamics of assets
A systematic approach to the selection of customers and their lending, as well as well-established system of risk management at the bank showed that, despite the difficulties of the crisis moment, the majority of tasks was solved in a timely manner and with high quality performance.impact of the global financial crisis and a sharp slowdown in the economy could not but affect the results of the bank’s activities. In 2011, there was a decline in the corporate loan portfolio. However, observed in 2012, the dynamics of change suggests progressive slowing decline in corporate assets, starting from the second half of the year.the analysis and evaluation of the bank’s liabilities will use table 2.2
LiabilitiesThe amount as of the date of the reportChange in the periodBase period 31.12.13Current period 31.12.14Growth rate,%Absolute growth, ths. Rub.Effect on change in total liabilitiesTotal, ths. Rub.Share,%Total, ths. Rub.Share,%Funds of other banks65 999 72511,0877 521 5879,7814,8611 521 8621,45Term borrowings from parent capital33 172 2825,5761 993 1507,8246,4928 820 8683,64Term borrowings received from other financial institutions6 266 9211,059 821 4101,2436,193 554 4890,45Amounts due to customers (non-credit institutions)452 472 76575,97531 900 50067,1114,9379 427 73510,02Debt securities issued10 354 5581,7422 228 3422,8053,4211 873 7841,50Other commitments6 245 0101,057 675 7960,9718,641 430 7860,18Derivatives and other financial liabilities6 529 2371,1064 221 6118,1089,8357 692 3747,28Total liabilities595 587 878100,00792 621 37410024,86194 321 89824,52
Table 2.2 — Analysis of liabilities
bank’s liabilities during the period from 31.12.2013 on 31.12.2014 increased by 24.52%. The main source of borrowed funds are bank clients’ funds (67.11% of total liabilities). Attracted funds from individuals for the year increased by 36.19%. Customers are offered a wide range of urgent and special deposits at competitive rates. On the 14.86% increase in attracted bank loans, deposits and other funds of the Central Bank of the Russian Federation. Increased debt and also raised funds of credit institutions 36.19%. It is essential to the 89.83% increase on derivatives and other financial liabilities.must be noted that the assets and liabilities of Raiffeisenbank in relation to derivative financial instruments increased by more than 80%.financial instrument (derivative) — a financial instrument, based on the obligations laid down in respect of other investment assets or commodities. In fact, a derivative — a security of a security. There are several main types of derivatives: futures, forwards, swaps, options, swaptions, contracts for difference.are conventionally divided into categories in accordance with the assets that underlie them.
. Financial derivatives — contracts based on interest rates on short-term and long-term bonds of the United States, Britain and other countries.
. Foreign exchange derivatives — contracts for the euro / dollar, dollar / yen and other world currencies.
. The index derivatives — contracts for stock indices, such as the S & P 500, Nasdaq 100, FTSE 100, and in Russia and futures on stock indexes MICEX and RTS.
. Derivative securities into shares. On the MICEX, including futures traded on a number of Russian market leaders: "LUKOIL", "Rostelecom", etc.
. Commodity derivatives — contracts for energy resources, such as oil. In the precious metals — gold, platinum, palladium and silver. In the non-ferrous metals — aluminum, nickel. In agricultural — wheat, soy, meat, coffee, cocoa and even orange juice concentrate.in a small number of transactions (3%), a real delivery of assets underlying derivative securities. Mainly deal settled by mutual settlements in cash through the process of clearing.are used for two purposes., for the insurance of financial risks (hedging). For example, agricultural producers can protect themselves from falling prices for its products in the future, he plans to harvest. Or automobile concern that requires a known quantity for the production of non-ferrous metal in the future can insure against his appreciation for a certain period., the derivative securities — one of the most profitable instruments for speculative trading. Indeed, for the purchase of a futures contract is 100 thousand. Euro against the US dollar for delivery in three months required to pledge only about 2 thousand. Dollars. Thus, we can get for free so-called shoulder on a very large sum. Unfortunately, while speculative transactions with derivative securities — the most risky compared to other securities.of the structure and dynamics of income "Raiffeisenbank" hold using the table 2.3. main source of income of the bank continue to be interest income (51.51%). However, despite the reduction in their share relative to other sources of income, their share in the total income of the bank has remained at 3.05%. This is due to the absolute and relative decline in non-interest income. Fee and commission income of the bank increased by 2,228,951 thousand. Rub. and amounted to 17,075,699 thousand. rub., their share in total revenues of 3.2%. Overall, total income of the bank rose by 22.74%.
Items of incomeBase period 31.12.13Current period 31.12.14Change in the periodAbsolute growth, ths. Rub.Growth rate,%Effect on change in total liabilitiesTotal, ths. Rub.Share,%Total, ths. Rub.Share,%Net interest income after provision for loan impairment33 706 89462,7235 829 43151,512 122 5375,923,05Fee and commission income14 846 74827,6317 075 69924,552 228 95113,053,20Gains less losses from dealing in foreign currencies3 189 0915,936 358 9599,143 169 86849,854,56Net gains / (losses net of gains) from foreign currency revaluation967 5031,809 057 33413,028 089 83189,3211,63Recovery of provision for credit related commitments231 2710,43312 9210,4581 65026,090,12Reversal of provision for impairment of investment securities held to maturity14 2500,039740,0014-13 276-1363,04-0,02Gain on sale of loans32 4990,06158 7340,23126 23579,530,18Other operating income336 5260,63303 1680,44-33 358-11,00-0,05Share of results of associates418 3550,78463 7560,6745 4019,790,07Total income53 743 13710069 560 97610015 817 83922,7422,74Table 2.3 Analysis of the structure and dynamics of income "Raiffeisenbank"
we could see that most share of income belongs to Net interest income after provision for loan impairment there could be mentioned few words about this article.
At the end of 2014, Raiffeisenbank has demonstrated significant growth in all areas of retail banking. Profit before tax of the retail business in 2014 increased by 17.6% compared to the same period in 2013 and amounted to 10 947.3 million rubles.volume of retail loan portfolio increased by 15.6% to 210 110 100 000 rubles. compared to 2013 year (before provisions for impairment). The mortgage portfolio grew by 24.9% or 10 329 600 000 rubles. to 51 846.1 million rubles. The portfolio of credit cards and overdrafts rose by 43.6% to 17 266.8 million rubles. And the consumer loan portfolio increased by 11.2% or 10 013 900 000 rubles. compared with 2013 and totaled 99 812 700 000 rubles. Auto loan portfolio increased by 7.4% or 2 833 900 000 rubles. to 41 184.4 million rubles.
"Similar to the results we have achieved both by expanding the branch Network — in 2014, it opened 32 points of sale in Moscow and by the launch of products and customers sought to improve the quality of service", — said Andrey Stepanenko, the deputy chairman of JSC "Raiffeisenbank" , Head of retail banking and small business. — "In 2015, we will continue to develop new technological channels of communication with customers to develop innovative services. But the main thing in our work will remain high standards of service quality. "2014 the volume of individuals’ funds placed in Raiffeisenbank increased by 19% due to growth in current accounts (up 28.1% to 137 328 700 000 rub.) And deposits (+ 12.7% to 173 657.1 mln.).year, Raiffeisenbank has offered its customers a number of new products: started issuing Visa debit cards with contactless technology purchases Visa payWave, has launched a new Online service ‘Accumulate with us! ", Which helps to accumulate the required amount for the implementation of a particular purpose. In addition, customers are now on the same day the bank for 15 minutes can apply for instant card issuance. Premium customers a new program became available Easy Europe, which includes not only banking services but also services aimed at simplifying the formalities for travel to Europe.2014, Raiffeisen Bank and MDM Bank united ATM Network. Thus, taking into account the previously signed similar partnerships with UniCredit Bank, the bank "Uralsib" Tatfondbank and Rosbank, the number of devices in which Raiffeisenbank clients can withdraw cash without commission and check the account balance has exceeded 11 thousand.attention is traditionally paid Raiffeisenbank remote banking services. In 2014, the greatly expanded functionality for Online banking R-Connect — now to the standard options, such as access to information on accounts and making payments, add new features — the opening of accounts in rubles and foreign currency, money transfer from card to card Raiffeisenbank other Russian banks, savings account to control and special bonuses when a predetermined amount, complete work with templates, as well as the service account for personal expenses. The list of payees, whose services can be paid through R-Connect without commission added more than 100 companies, including suppliers of utility services, mobile operators and Internet service providers.control of finances has also become easier with the new version of the mobile application R-Mobile. By the usual functions to add a translation on the cards of other banks within the same payment system, budgetary payments (taxes, penalties), search partner ATMs on the map, and more.of users of the system R-Connect has grown by 46% over the previous year, while the number of advanced remote transfers and payments increased by 67% compared with 2013 year.of development of activities will be continued in the next Items of incomeBase period 31.12.13Current period 31.12.14Change the periodAbsolute growth, ths. Rub.Growth rate,%Effect on change in total liabilitiesTotal, ths. Rub.Share,%Total, ths. Rub.Share,%Commission expenses4 263 40381,605 722 66426,691 459 26125,506,81Net losses from trading securities166 6563,191 381 6106,441 214 95487,945,67Losses net of gains arising from other securities at fair value and changes therein are recognized in profit or loss19 3960,372 246 95410,482 227 55899,1410,39Unrealized losses net of gains on derivative financial instruments728 08313,9411 500 59153,6310 772 50893,6750,24Realized (losses) / gains less losses from transactions with derivative financial instruments-235 441-4,51343 7431,60579 184168,492,70The ineffectiveness of hedge accounting282 6205,41246 8171,15-35 803-14,51-0,17Total expenditures5 224 71710021 442 37910016 217 66275,6375,632.4 Analysis of the structure and dynamics of costs "Raiffeisenbank"
.2 Services of foreign banks in the financial market on the example of Raiffeisen
and current accounts2013, deposits were launched with monthly capitalization, which improved product offering. Through monthly interest capitalization customers get more income, which increases the attractiveness of our deposits and allows to attract new customers. In addition, the product line has been optimized by pooling deposits "Refillable" and "rentier". Customers made it easier to navigate among the contributions. The changes were made and the deposit "P-Connect. Money in growth! ". It was complemented by the options to replenish and monthly capitalization, resulting in increased number of customers who open a deposit through the Internet bank. This will eventually reduce the cost of the Bank, as the cost of opening a deposit through the R-Connect is much lower than the opening of the deposit through a branch. In June 2013 launched a new product "Savings Account", which allows you to place the funds at any time. This account is the ruble, and the main difference from other accounts — it can not bind to the card. Moreover, the daily calculation of interest on the remainder.with premium customers (Premium Banking and Premium Direct)2013, both segments, "Premium" and "Premium Direct", performed well results both in attracting new customers and in sales of investment products. At the end of the year the number of customers segment "Premium" amounted to more than 27 thousand. Man. Unique to the premium segment of the market with a focus on service over the phone — "Direct Premium" — made a sharp jump, which allowed for the year to increase the number of clients with 1 thou. To 11.5 thous. People. By year end, personal managers "Premium Direct" attracted 573 million rubles in mutual funds and insurance products issued IC "Raiffeisen Life" at 59 million rubles. One of the focuses of 2013 was to improve the quality of customer service. Implemented a monitoring system in regular contact management with clients, developed a process of active dating new customers with all the services of the Bank in the first six months of service. Also in 2013, financial planning for clients segment "Premium" strengthened risk-profiling. Defining the customer profile before proposing investment products it corresponds to European trends andis a competitive advantage of premium services in JSC "Raiffeisenbank". The range of investment products offered to clients extended with new strategies of trust management of Open Company "UK" Raiffeisen Capital "- a strategy with partial capital protection, designed for customers with a more risky investment portfolios. The previously launched the strategy of trust management with full capital protection in 2013 was raised to 1.1 billion. Rubles.the segment "Premium Direct" 2013 was a year of formation: the staff management increased by 4 times, improved training programs, the control system through the team leaders, is being successfully implemented sales experience of investment and insurance products remotely over the phone. Also it conducted constant monitoring of customer satisfaction and implemented tools to increase their loyalty. The priority of "Premium" and "Premium Direct" is the provision of high quality services and offer new and interesting products for the customer, which ultimately provides stability to attract new customers and minimize the outflow of existing ones.with small companies and micro businessesthe year, the Bank has consistently improved its product line for this segment: developed profitable and simple packages of cash and settlement services, introduced the product "Mobile acquiring", simplifying the process of opening a bank account and to sign the agreement acquiring launched a specialized call center, optimized credit products and processes. Also introduced was the model of a single front office for businesses and individuals, bringing clients segment "Small and micro" may apply to the 127 offices of the Bank. As a result, in 2013, it was achieved impressive results involved more than 13,000 new customers, and the customer base exceeded 35,000 companies. Increasing the number of customers and increased use of settlement services has led to the growth of the Bank’s liabilities segment "Small and micro" 28.8% to 16.85 billion rubles (according to IFRS) on 31.12.2013. In the area of lending to clients of this segment grew by 43%, while higher growth rates were unsecured microcredit, where the credit portfolio for the year almost doubled. The total amount of loans granted customer segment in 2013 amounted to more than 6 000 units, and the loan portfolio at the end of the year reached 17.8 billion. rubles (according to IFRS).and investment bankingthe difficult market conditions in demand for credit, reducing the profitability of both active and passive operations and increase the credit risks of borrowers, the main priorities of the work of the corporate management of the Bank are:
Improving the quality of services and technology opportunities for their use, expanding the product range of Credit tools, non-credit products;
An increase in productivity and operational efficiency;
Preservation and improvement of the quality of the loan portfolio and credit risk management;
Ensuring a high rate of return on capital.priority of maintaining stability and profitability over volume growthwas, in our opinion, the only true, objective and responsible approach to business development with customers and partners in terms of increased risks.virtually stable volume of total corporate loan portfolio for the year to December 2012, we were actively increasing the volume of lending in the segment of medium-sized businesses, where a relatively high rate of return with an acceptable level of risk. The increase in the volume of loans in the segment of medium-sized businesses made up more than 53.3%.increase the amount of financing of our clients, we are actively used documentary instruments with low risk weight — bank guarantees and letters of credit — which demand from both large and medium-sized businesses grew steadily throughout the year. The effect on the quality parameters of the loan portfolio remained minimal.general, the amount of commitments for the year increased by 22.5 billion rubles (+ 12.2% to the results went the year). In the mid-market, this figure exceeded 56.1%.structure of the loan portfolio by industry did not change significantly, indicating that the continuity and stability of our approach to risk assessment and the development prospects of the most significant in terms of business sectors.financingportfolio of project finance transactions of the Bank in 2013 remained at about the level of the previous year, and amounted on December 31, 2013 more than 60 billion. Rubles. Most of the portfolio — long-term financing transactions of commercial real estate. Compared with last year its volume in the overall portfolio of projects decreased slightly from 92% to 84%.Financing commercial real estate is distributed over the following main business segments: offices — 27%, retail properties — 43%, warehouse real estate — 21% of hotel — 7%, residential real estate — 2%. Most of the transactions in the segment of project financing has been associated with the refinancing of completed properties.sign transactions in 2013 include the following:
Financing the construction of five-star luxury hotel — Grand Hotel Europe, located in the heart of St. Petersburg, in the amount of 50 mln. US dollars for a period of 5 years.
Provide group company Raven Russia Limited loan of 33 mln. US dollars for a period of 10 years for the completion of the third phase (47 thousand sq. M) logistics park in Klimovsk. The total area of the logistics park at the end of the third construction phase of the project will amount to 156 thousand square meters.
The signing of a long-term loan agreement in the amount of 45.6 million. The euro on finance the construction of commercial and service center of Porsche in Moscow, which should become a flagship sales and service of cars Porsche.service medium-sized businesses2013, the Bank continued to actively develop lending to midsize companies. The loan portfolio of JSC "Raiffeisenbank" in this business segment increased by 53.3% and exceeded 16.5 billion rubles. The volume of business on documentary instruments increased to 4 billion. Rub. (+ 65.4% from the previous year). Such impressive growth figures were the result of active work on expanding its customer base in the regions where the bank, as well as the supply of credit products, including documentary, and services in the field of optimization of settlements with counterparties and liquidity management. Reducing the time to work with the company’s application, as a result of improvements in internal procedures and mechanisms of interaction of divisions in the process of review and approval of loan applications has also made a significant contribution to the acceleration of growth in the loan portfolio. Medium business segment of the Bank is mainly represented by companies from developing sectors such as trade, the production of consumer goods, services, including media, information technology and telecommunications, where there is significant growth potential, including through mergers and acquisitions. Therefore, the bank is actively expanding its interaction with the medium-sized businesses in the field of investment banking. Many years of practical experience in transactions conducted by the bank’s specialists, allows us to offer structure and any decision on a merger, consolidation of the asset repurchase of minority interest, using the bank’s own resources as soon as possible and with the highest quality performance work. Along with the significant growth of the loan portfolio and number of clients, one of the most significant results of the team of the Office of Customer medium-sized businesses in 2013 can be regarded as an increase in the share of revenues of the business segment in total revenues of Corporate Business Bank, both in the regional centers, as and in general management.(Figure 2.9)
Figure 2.9. The structure of the loan portfolio by lending to medium-sized businesses
Investment Banking2013 NPF "Raiffeisenbank" continued successful work in the field corporate finance and investment banking operations. NPF "Raiffeisen" carries out investment of pension reserves and pension savings in order to ensure optimal investment in accordance with the legislative requirements and the investment philosophy of the "Raiffeisen", provide:equipment;of a stable profitability;liquidity and diversification;transparency; (Table 2.10)
2.10 Investing available fundsfunds in the accounts of credit institutions: 0.4%in bank deposits: 50.3%securities of the Russian Federation: 0.0%securities of the Russian Federation: 5.3%of Russian issuers: 27.9%of Russian companies: 0.1%backed securities: 14.8%of international financial institutions: 0.6%assets: 0.7%: -0.1%bonds
the market of ruble bonds of "Raiffeisen Bank" has strengthened its leading position was the organizer of 30 transactions with a total nominal value of over 250 billion rubles. According to news agency Cbonds, on the results of 2013 the Bank has traditionally entered the top five in the ranking of the organizers of the ruble bonds.the landmark transactions this year include:
two bond issues of JSC "Oil Company" Rosneft "totaling 70 billion rubles for the period of 5 years;
two bond issues totaling VEB 35 billion rubles for a period of 2 and 5 years. Documentation issues included a number of innovations, and was as close to international standards Eurobond market;
the issue of bonds of OJSC "MegaFon" of 20 billion rubles for a period of 5 years;
debut issue of bonds of "HC Finance" provided by a pool of consumer loans (5 billion rubles) for a period of 3 years. Structure Releasethe use of Russian issuers (SPV) for the purpose of maximizing investor demand.has also successfully made the agent for the restructuring of the bond issue of JSC "TGC-2". 2013 also was a breakthrough for the Raiffeisen Group in the Eurobond market in Russia, where the Bank acted as lead arranger and bookrunner 11 placements totaling more than US $ 4 billion.
.3 Risks related to activity in financail market
terms on the financial market, Raiffeisen Bank faces the following risks: market, currency, credit and liquidity risk.risk. Market risk — is the risk of incurring losses as a result of the negative impact of changes in interest rates, exchange rates, prices of securities and commodities and credit spreads, which may affect the capital gains of the Group or the market value of its assets and liabilities. Market risk is determined on the basis of balance sheet and off-balance sheet positions in treasury, investment, banking and lending operations of the Bank.management toolsBank manages market risk by monitoring market risk limits for all trading portfolios (domestic and foreign securities with fixed income, foreign exchange and equity positions), using a variety of risk management tools such as position limits, the cost of risk, stress testing, back testing, analysis inconsistency level of interest rates on assets and liabilities, sensitivity analysis, and limits "stop loss".of risk (VaR)is a statistical estimate of the potential losses on current trading portfolio of the Bank, including positions in fixed income, equity and currency positions, as well as a decrease in the economic value of the banking book as a result of adverse changes in market parameters. By the standards of the Parent Bank and the Group Vag is estimated at 99% confidence interval, and it is specified statistical probability (1%) that actual losses will exceed the value of VaR.the fact that VaR is a valuable tool for determining market risk, you must also take into account the shortcomings of this method, especially for less liquid markets, such as:use of historical data as a basis for determining future events may not take into account all possible scenarios, particularly those that have an extraordinary nature;the level of the confidence interval equal to 99%, does not allow to estimate the amount of losses expected with a probability of less than 1%. The amount of VaR is associated with empirical uncertainty. There is a 1% probability that losses could exceed VaR;value of VaR is calculated only at the end of the day, and do not necessarily reflect the risks that may arise on positions during the trading day.calculate the parameters of risk Value at Risk using a delta normal method, it is necessary to form a sample of a risk factor, it is necessary that the number of sample values were greater than 250 (recommendation Bank of International Settlements), to ensure representativeness.quotes share is calculated daily yield from the formula:
: D — day yield;current share price;- yesterday’s earnings per share.value of VaR depends on the Bank’s position and the volatility of market prices. VaR for unchanged position reduces if market volatility declines and vice versa.(Table 2.11)
2.11 1-day VaR count
Stress Testingmain advantage of the risk assessment using VaR — reliance on empirical data — is at the same time it is a major drawback. Extreme changes in the market, which can cause significant deterioration of the Bank should be evaluated based on the number of standard deviations of market returns. The figures are approximate indication of the magnitude of possible losses from the relevant scenario. The Bank uses stress tests to model the financial impact of a variety of exceptional market scenarios on individual trading portfolios and the overall position of the Bank. Stress tests are an indicator of the size of potential losses that could arise in extreme circumstances.testing helps to assess the risk of the Bank resulting from extreme market movements and can detect signs of potential losses that may result from such changes. Stress testing is used to make sure that was studied by a large range of scenarios in order to understand the vulnerability of the Bank, and that the management and control system is a comprehensive, transparent, and has a quick response to changing market conditions and events occurring as a in the world, and in the Russian economy.testingeffectiveness of the VaR model is verified by a back-testing. During back-testing to identify cases of loss greater than the amount of VaR, and the frequency of violations compared with VaR limits set by the confidence interval.back-testing the Bank compares the one-day VaR, calculated on the positions at the end of each working day, the actual income for the same positions on the next business day. In this income ("income when back testing") are not included non-trading components such as commissions, but including revenues from intraday operations (so-called "dirty backtesting"). If the result is negative and exceeds the one-day VaR, it is considered that there was a "deviation back-testing." When Var is estimated at 99% confidence interval, is expected deviation backtesting, on average, once every hundred days, ie about three times a year.Bank uses interest rate sensitivity analysis to assess the interest rate risk in the banking portfolio, including loans, deposits, interbank operations on the money market, securities, fixed-income securities held to maturity, and derivative instruments whose underlying assets are interest rates and the trade portfolio includes trading securities with fixed income and derivative instruments whose underlying assets are interest rates, which hedges the risk on trading securities with fixed income. The Group calculates the sensitivity of the interest rate (the value of a basis The table below summarizes the foreign currency risk of the Group as at 31 December 2014 as follows (Table 2.12) :
2.12 Calculation of gross risk
above derivative financial instruments are monetary financial assets or monetary financial liabilities, but are presented separately in order to present the overall risk of the Group.
The position of the Group’s derivative instruments presented in each column reflects the fair value at the end of the period of the relevant currency in respect of which agreed to buy (positive amount) or sell (negative amount) before netting of positions and payments with the counterparty.Bank calculates VaR in euro for the report to the parent bank for local currency Bank performs impact analysis. The table below shows the change in the financial result and equity due to possible changes in exchange rates applied at the balance sheet date, despite the fact that all other variables remain constant (Table 2.13):
2.13 Impact on profit changes in exchange rates
2.14 The impact on the profit from the change in fair value
If on December 31, 2014 interest rates in rubles were 600 basis points (bp) below, and the rate in dollars and euros were 1 basis 2.15 Interest rate for major debt instruments
Liquidity risk. Liquidity risk — this is the current and prospective risk of affecting profits or equity, arising from the bank’s inability to meet its financial obligations as they fall due settlement without incurring unacceptable losses (extremely high financing costs). This risk arises from the fact that the bank may not be able to ensure the effectiveness of the expected and unexpected cash flow and collateral requirements. The Group is exposed to daily calls on its available cash resources from overnight deposits, current accounts, maturing or early withdrawal of deposits, loan draw downs, guarantees and derivative financial instruments that are settled in cash. The Group does not maintain cash resources in case you need a one-time meet all of these as the basis of accumulated experience, we can with a sufficient degree of accuracy to predict the level of funds needed to fulfill these commitments. Liquidity risk is managed by the assets and liabilities of the Group.Group seeks to maintain a stable funding base primarily consisting of deposits of legal entities / deposits of individuals, due to other banks, as well as invest in diversified portfolios of liquid assets, in order to be able to quickly and smoothly to unforeseen liquidity requirements.liquidity management of the Group requires considering the level of liquid assets necessary to settle obligations as they fall due; providing access to various sources of funding; contingency plans in case of problems with financing and exercising control over compliance of the balance sheet liquidity ratios against regulatory requirements. The Group calculates liquidity ratios on a daily basis in accordance with the requirements of the CBR.Group calculates liquidity ratios on a daily basis in accordance with the requirements of the CBR. These standards include:ratio (H2 must be at least 15% in accordance with the requirements of the Central Bank of the Russian Federation), which is calculated as the ratio of liquid assets to demand liabilities. As of December 31, 2014 the value of this standard was 48.54% (on December 31, 2013 H2 Bank amounted to 42.46%).liquidity ratio (N3 should be at least 50% in accordance with the requirements of the Central Bank of the Russian Federation), which is calculated as the ratio of liquid assets to liabilities maturing within 30 calendar days. As of December 31, 2014 the value of this standard was 58.72% (on December 31, 2013 H3 Bank was 77.18%).term liquidity ratio (N4 must be no more than 120% in accordance with the requirements of the Central Bank of the Russian Federation), which is calculated as the ratio of assets maturing after one year to capital and liabilities maturing in over one year. As of December 31, 2014 the value of this norm was 112.99% (on 31 December 2013 the Bank was 90.87 H4%).
Conclusion
part of the analysis carried out and the scope of activities of foreign commercial banks in the domestic banking market and considered approach to the management of risks associated with the activities of banks. The first examined the theoretical foundations of the phenomenon under study: to analyze different approaches to the definition of the bank with foreign capital participation by Russian authors reviewed the classification and legislation, as well as restrictions imposed by the regulator to reduce the risks associated with increasing competition between Russian and foreign banks. For the purposes of the work to the emergence of foreign banks in the domestic market of foreign investments allocated to commercial banks in subsidiaries with a view to profit, asset diversification and the maintenance of liquidity. The method to create a bank with foreign capital corresponds to the data contained in the Federal Law N 86-FZ, designed for foreign credit institutions, and solves the problem of the emergence of banks with a dubious reputation. Analysis of legal acts regulating the activities of foreign commercial banks revealed that at present the risks associated with the activities of the latter are limited mainly by the mandatory standards set by the CBR. This fact demonstrates the need for an effective control system for monitoring the state of the domestic banking system and continuous improvement approaches to risk assessment and management within the country.analysis of current data on the nature and extent of involvement of foreign capital in the Russian banking sector for 2009-2010. revealed several trends: 1) a steady increase in the volume of investments of commercial banks in the Russian banking sector; 2) the concentration of foreign investment; 3) the desire of foreign investors to fully control the controlled bank. These trends show an increase in complication and risks inherent in the activity of banks with foreign capital — of all types of market risk, credit risk, liquidity risk and operational risk.risk management operations of a foreign bank is impossible without the existence of a bank independent and reliable overall risk management system. A study of the current practice of risk management has been found that with certain assumptions we can speak of a direct relationship between the size and quality of the bank’s risk management system. Major foreign banks seek to continuously improve the applied methods and approaches, and closer to international best practice. In smaller banks still face the problem of an independent selection of the structural unit of risk management and giving him authority to make decisions and restrict the activities of the business units that generate risk.a detailed study of approaches to risk assessment and management was held vertical analysis, the role of each of the main services and the risks associated with the activities of the bank on the example of "Raiffeisenbank".analysis allows, on the basis of the financial statements, consider the assets, liabilities, income and expenses of the selected bank and see how each separate article affects the overall composition, and what percentage of this article. It was also compared with the previous year to determine the rate of development of the bank as a whole and for each individual item.possible risks and ways to reduce them to an acceptable level to evaluate the impact of each factor on the bank’s activities. At the same time suggests possible ways to overcome these risks and reduce their exposure to an acceptable level.the proposed measures to mitigate the impact of risks on a bank with foreign capital, the market is still observed crises of various sizes that can be avoided due to the size and experience of the selected bank. However, serious omissions inherent not only to foreign banks, but the whole Russian banking system — reliance on standard methods of risk reduction, the use of methods to reduce the risks in the image of the risk models used in the framework of another, foreign economy and "hope" on the rationality of the Russian consumer — have become justification for the search for new solutions to reduce risk.the foreign banks present in the domestic market, one of the most successful in the matter of forecasting and risk reduction is "Raiffeisenbank". The basis of minimizing risks, as well as to reduce the possible negative impact of an organization — the issuer is carried out a number of actions: the organization of risk management is carried out on three levels, consistent with the parent company, taking into account Russian specifics; the introduction of new, more stringent requirements of the Basle committee the; the use of different methodologies to assess risk, such as Value-at-Risk, stress testing, sensitivity analysis tools / portfolios of the Bank to risk, scenario analysis.
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Appendix
