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Annual General Shareholders’ meeting
Minutes N 22 as of May 31, 2011
(open joint-stock company)
Approved (preliminary)
At the meeting of the Board of Directors of
Minutes N 4 as of April 26 2011
I. CHELINDBANK’S STANDING IN THE BANKING INDUSTRY ............................................................................. 2
II. PRIORITY AREAS OF CHELINDBANK’S PERFORMANCE .................................................................................. 6
III. REPORT ON RESULTS OF DEVELOPMENT OF CHELINDBANK IN 2010 ........................................................ 6
PER PRIORITY AREAS OF PERFORMANCE ............................................................................................................... 6
V. PERSPECTIVES OF DEVELOPMENT OF CHELINDBANK ................................................................................. 21
VIII. LIST OF MAJOR TRANSACTIONS ..................................................................................................................... 24
IX. LIST OF TRANSACTIONS WITH INTEREST ....................................................................................................... 24
X. MEMBERS OF THE BOARD OF DIRECTORS ....................................................................................................... 24
XI. THE BOARD OF THE BANK .................................................................................................................................. 24
EXECUTIVE BODIES OF THE BANK ......................................................................................................................... 24
.......................................................................................................................................................................................... 25
Compliance with the Corporate Governance Code is aimed at achievement of mutual understanding between all parties
interested in efficient performance of the Bank: shareholders, customers, partners and employees. Principles which
serve as the basis for corporate governance system and informational transparency of the Bank contribute to
strengthening of trust of shareholders and customers to the management. ....................................................................... 25
CHELINDBANK operates in Chelyabinsk region. The Bank has a Head office and 6 branches in
Chelyabinsk, 22 branches in Chelyabinsk region, one branch in Yekaterinburg, representative
office in Moscow, 17 subsidiary offices, 8 operational cash-offices located out of the branches’
premises. There are 56 structural units altogether. The main incomes are received by the Bank
from its performance on the territory of Chelyabinsk region.
Significant influence on the activity of CHELINDBANK in 2010 was made by positive after-crisis
changes, which took place in the world economy and Russian economy, in spite there were some
negative factors.
Macroeconomic indicators of economies of the USA and Europe give evidence on improvement of
situation and moderate growth of business activity: growth of GDP, growth of industrial production,
growth of consumer expenses, growth of the main indicators of economic moods. However
economies of the abovementioned countries remain the following risks: high unemployment rate,
budget deficit and high external debt. Situation in EU is still tough. Financial aid provided to some
of the European countries can just give a pause, as far as Europe is facing restructuring of
sovereign debts of several countries simultaneously during future years. To prevent possible
defaults the European fund for financial stability of 750 mln Euro was established.
Economy of Russia showed good results in 2010 as well. Comparing with 2009, GDP grew by 4%,
budget deficit was reduced from 25.5% and comprised 1600 trln roubles, volumes of industrial
production increased by 8.2%, retail sales turnover – increased by 4.4%, unemployment rate
reduced by 7.2%. External factors were favorable to Russia: average oil price in 2010 was equal to
77.5 USD per barrel, and the forecast was 75 USD.
The following negative factors remained in Russian economy in 2010. The volumes of residential
construction and volumes of investments for major and medium companies were still reducing.
Since October 2010 the debts for salaries and household payments came back. The volumes of
construction works were at the level of 2008, the growth of private incomes slowed down,
unemployment rate stopped decreasing. Growth of prices for food and natural monopolies, as well
as in other segments of consumer market created additional inflation pressure. Upon the results of
the year the level of consumer prices grew by 8.8%. Anticipating increase of inflation the Bank of
Russia increased deductions into the Funds of obligatory provisioning. In 2010 the Bank of Russia
reduced refinancing rate 4 times leading it to the historical minimum – 7,75%.
Recovering of economy made a positive impact on the banking sector of Russia, which
demonstrated positive dynamics in comparison with 2009 by key performance indicators:
increments of assets – 14.9%;
corporate loans grew by 12%;
private loans - by 14%;
volumes of corporate deposits increased by 11.4%, funds on settlement and other
corporate accounts – by 25.5%, private deposits – by 35.2%.
profit received by Russian credit institutions in 2010 – 573.3 bln roubles (2009 – 409.2 bln
After severe fall in 2009 the industry of Chelyabinsk region began to recover. In 2010 there were
the following positive tendencies in economy of Chelyabinsk region:
internal regional product increased by 5%;
industry – by 12.1%;
transport load turnover – by 10.9%;
retail turnover – by 0.8%;
consolidated budget income – by 43.5% up to 85.9 bln roubles;
private money incomes – by 13.3% up to 16932 roubles;
average monthly salary – by 14.7% up to 17606 roubles, and real salary increased by
unemployment rate reduced from 3.6% in 2009 till 2.2% in 2010.
Recovering processes established in 2010 made a positive impact on dynamics of key indicators of
banking sector of the region.
Existing bank branch of Chelyabinsk region increased by 14 units as the result of opening internal
subsidiary offices by credit institutions of Chelyabinsk region. As of 01.01.2011 there were 10
independent commercial banks, 43 branches of credit institutions from other regions, 331
departments of Sberbank of Russia including branches. The regional bank network reduced by 19
units till 215 during the year: the number of regional banks reduced by 1, branches by 2 (now there
are 38), internal structural departments of the banks and offices – by 16 (now -167) that is mainly
related with deprival of license from regional bank “Monetny dom” om 20.12.2010.
Resources and investments of the banking sector in Chelyabinsk region had positive dynamics in
Liabilities of the banking sector of Chelyabinsk region increased by 16.2% up to 331.6 bln roubles
in 2010 (in 2009 they decreased by 7.0%). Such positive influence on dynamics of banks’ liabilities
was caused by the growth of private deposits and funds on settlement accounts of the companies,
and funds attracted in the interbanking market.
Private deposits increased by 29.6% during the accounting period and reached 137.7 bln roubles
(during 2009 – by 19.5%). The funds of corporate customers increased by 9.8% up to 81.8 bln rub
(in 2009 there was a decrease by 9.5%) including settlement accounts – by 43.5% up to 51.8 bln
roubles (in 2009 decrease comprised 6.3%). The funds on deposit accounts of the companies
significantly reduced in the accounting period – by 21.7% (till 30.0 bln roubles), in 2009 it
decreased by 12.3%. The balance of funds attracted in the interbanking loan market in 2010
increased 2.5 times and totaled 7.0 bln roubles (in 2009 they grew by 61.4%).
Principal receivable of corporate customers for the banks (branches) of Chelyabinsk region
increased by 14.7% up to 151.2 bln roubles (in 2009 this figure decreased by 11.2%) including sole
traders – by 13/2% up to 6.5 bln roubles (in 2009 – decrease by 28.6%). Private loans grew by
1.6% up to 66.8 bln roubles (in 2009 decrease by 25.2%). In the 4th quarter of 2010 there was a
positive tendency for reduction of arrears (reduced by 9.4% during three months), but in general
during the year the arrears remained to grow (by 17.7%), the same as the share of the arrears in
the loan structure: from 6.1% in 2009 up to 6.6% in 2010.
Positive trends in economy and banking industry of Russia and Chelyabinsk region created
favourable environment for CHELINDBANK’s performance. The assets of the Bank (according to
published statement) increased by 19.2% and totaled 27.9 bln roubles in 2010. Ownership capital
of the Bank remained almost at the same level and comprised 4.6 bln roubles as 01.01.2011.
Actual value of capital adequacy comprised 19.0% with the minimal normative value – 10%. Net
principal receivable increased by 22% including private deposits (by 22.7%) and comprised 15.5
bln roubles. Profit before taxes (including EARD) comprised 559.5 mln roubles.
Successful performance of the Bank has been proved by rating agencies.
Fitch Ratings, International rating agency, increased long-term default rating of issuer and national
long-term rating of CHELINDBANK on July 9, 2010:
International rating:
* Long-term credit rating – “B+” (from “B-”)
* Short-term credit rating – “B”
* Individual rating – “D”
* Support rating – “5”
* Forecasted long-term rating – “Stable”
National rating:
Credit rating at the level of A- (rus) (with “BB”
Rating forecast for national scale “Stable”
Fitch analysts explained that they ranked Russian regional bank with high rating because
CHELINDBANK had stable customers base, conservative approach for risk management, significant
capital reserves, and no weak points in financial standing of the Bank.
In November 2010 National independent agency “Rus-Rating” increased credit rating of
CHELINDBANK up to BB level, forecast – stable. As the agency informed this rating is explained
by stable market positions of CHELINDBANK in the region, and moderate sensitivity of the Bank to
existing credit risks.
The Bank is included into 100-105 major banks of Russia by key performance indicators.
According to “RosBussinesConsulting” as of 01.01.2011 among 500 Russian universal
commercial banks CHELINDBANK is ranked as:
57 by amount of private deposits;
68 by private loans;
92 by value of loan portfolio;
100 by net assets.
According to “Interfax-100. Banks of Russia” as of 01.01.2011 CHELINDBANK is ranked as:
57 by private funds;
83 by ownership capital;
104 by assets.
CHELINDBANK is presented in the Urals federal district as major regional universal bank. The
Bank provides all kinds of banking services. The Bank is included in the top 10 list of major
credit institutions of the Urals Federal District. According to Expert-Ural dated as of 01.01.2011
CHELINDBANK is ranked among the banks of the Urals region as:
5 by balance sheet profit;
6 by ownership capital, private time deposits, private loans, corporate loans;
7 by assets;
8 by corporate funds in the settlement accounts.
CHELINDBANK is awarded as the “Best bank of the region” at the annual ceremony “Banking
business 2010”. The prize was established by “Banking business” magazine, “Informbank Agency”,
in cooperation with the leading and entrepreneurial structures of Russia. CHELINDBANK was the
winner of this prestigious prize several times.
In 2010 the Bank celebrated its 20th anniversary. During celebrations of this noble date
CHELINDBANK was visited by President of ARB, Garegin A. Tosunyan (Association of Russian
Banks), and Vladimir Kievsky, executive vice-president of ARB. CHELINDBANK was awarded the
Golden Diploma of ARB for long-term and fruitful cooperation with Association of Russian Banks.
Garegin Tosunyan awarded Mikhail Bratishkin with the order of Association of the Russian Bank
“Of Merit to the Banking Society” of I degree. Garegin Tosunyan congratulated the staff of the Bank
with its anniversary and pointed out that CHELINDBANK was “the face of the banking system of
Chelyabinsk region”. Speaking about development of the banking system in Russia during last 20
years the President of ARB specifically stressed the importance of regional banks: “Regional banks
were the most stable. They formed the system for the regions”.
Mikhail Bratishkin, General Director of CHELINDBANK, was among 12 representatives of business
in Chelyabinsk region who was included in the rating “Golden 100 of regional business” made by
“Delovoy kvartal” (Business Quarter) magazine (№4, 22.02.2010). Businessmen from 8 regions of
Russia who made direct impact on regional economy as the leaders of the companies.
CHELINDBANK is awarded by diploma “Bank of 5 years in the sphere of lending real sector of
economy” within the annual prize “Financial proud of the South Urals” arranged by “Credit line”
magazine with official support of the Main Department of the Bank of Russia for Chelyabinsk
Stable development strategy became the basics for performance of the Bank in 2010. The main
areas of the Bank’s performance were defined as follows:
- remaining of the Bank’s liquidity on the high level;
- quality growth of the loan portfolio;
- further work on return of the bad loan arrears;
- growth of commission income for all areas of performance;
- efficient cost management;
- development of risk management system, improvement of the Bank’s planning system;
- optimization of the structure of subsidiaries;
- provision of rentable performance of the Bank.
Financial indicators and capital
The assets of the Bank (in accordance with the published reports) for 2010 increased by 19.2%
and reached the level of 27.9 bln roubles. The ownership capital of the Bank as of 01.01.2011
comprised 4.6 bln roubles. The Bank fulfilled the main ratios: capital adequacy ratio H1 totaled
19.0% with minimal normative value of 10%, instant liquidity ratio comprised 57.7% with minimal
normative value of 15%, current liquidity ratio – 92.5% with minimal normative value of 50%.
Assets and capital in dynamics (in accordance with published reports)
30 000
25 000
27 856
24 743
23 714
23 093
23 369
20 000
15 000
10 000
5 000
4 617
4 588
4 624
4 610
3 470
Assets, mln roubles
Ownership capital, mln roubles.
Capital adequacy ratio, %
Pic. 1
Table 1
Main indicators of CHELINDBANK’s performance (according to published reporting)
(thousand roubles)
Ownership capital
Net principal receivable
Net investments to securities
Customers funds (non-credit institutions)
Including private deposits
Data as of
27 855 613
4 610 222
15 822 300
4 721 131
21 300 941
15 487 017
Data as of
23 369 184
4 588 206
13 505 242
2 799 839
17 458 632
12 618 331
Growth rate,
The main are of active operations of the Bank is lending. The Bank provides loans to corporate
customers, small and medium business, and private customers. Net principal receivable as of
01.01.2011 comprised 15.8 bln roubles, the net share in the assets of the Bank – 56.8%, which is
comparable to similar figure in 2009. During 2010, the net principal receivable increased by 17.2%.
As of January 1, 2011 customer loan portfolio of the Bank comprised 15.1 bln rubles showing an
increase by 15.7% since the beginning of the year including loans provided to corporate customers
– 8.2 bln roubles, and retail loans – 4.4 bln roubles, loans to small business – 2.5 bln roubles. The
growth took place for all areas of lending. In 2010 there were changes in the structure of the loan
portfolio of the Bank – the share of small business loans and retail loans was increased.
Structure of loan portfolio per areas of lending
2009 год
Retail loans
Retail loans
Small business
Small business
Pic. 2
The amount of arrears grew by 19.8% and reached the level of 981 mln roubles. The share of the
arrears in the loan portfolio comprised 6.5%. The main share in the amount of the arrears is held
by the arrears for loans provided to corporate customers – 68%.
Table 2
Arrears in the customer loan portfolio
Mln roubles
Name of item
Loans to customers
Including arrears
share of the arrears ( %)
Corporate loans
Including arrears
share of the arrears ( %)
Loans to small and medium business
Including arrears
share of the arrears ( %)
Retail loans to private customers
Including arrears
share of the arrears ( %)
15 083
8 229
2 501
13 036
7 692
1 606
Growth rate,
115,7 %
4 354
3 738
Actually formed provisions for possible losses from loans, principal receivable and other similar
debts comprised 2 046 mln roubles as of January 1, 2011 showing the decrease by 74.9 mln
roubles in comparison with the previous year. Comparison of provision volumes with arrears allows
to evaluate the level of loan portfolio protection as sufficient, and level of provisions by level of the
Bank’s risks – as adequate.
The Bank pays a lot of attention to the work with the arrears. In 2010, there were changes made
into internal normative documents that regulated the procedure for working with the arrears taking
into account current situation in the lending market, changes in legislation and new opportunities of
the market. The active performance of the working groups established in 2009 for working on the
arrears was continued for loans provided to corporate customers and retail loans, as well as the
performance of the remote groups created for operations in the branches of the Bank.
The software called “STATEMENT OF CLAIM” was introduced in the Bank. It allowed fixing and
controlling the work of all structural departments of the Bank involved in the work with the arrears
that contributes to effective organization of cooperation between structural departments of the
Bank, provides correct procedure for working with the arrears. Due to active work with the arrears,
beginning from the second half of 2010, the growth rates of the arrears in the loan portfolio began
to decrease.
Net investments of the Bank to securities in 2010 increased by 68.6% and comprised 4.7 bln roubles
as of 01.01.2011 or 16.9% of the assets of the Bank. The securities portfolio of the Bank includes
highly reliable state bonds and corporate issues, share traded at MICEX, foreign currency bonds
issued on behalf of major Russian enterprises including state-owned enterprises. More than 90% of
the portfolio of the rouble securities consists of the instruments included into the Lombard list of the
Bank of Russia that allows using the portfolio as one of the most important tools for liquidity
The funds of customers take the mane share in the structure of the Bank’s liabilities – 93.9% or
21.3 bln roubles. More than 72% of the customers funds are private deposits. Time deposits of
private customers comprise the basics for the resource base of the Bank. In 2010 time deposits of
private customers increased by 2.3 bln roubles and comprised 12.9 bln roubles as of 01.01.2011.
Time deposits for more than one year comprise 85.3% of the amount of time deposits or 11 bln
The balance of the funds attracted from companies and enterprises increased by 20.1%in
comparison with 2009 and was equal to 5.8 bln roubles (in 2009 it decreased by 27%), which is
related to after-crisis recovering of economy and active work of the Bank with the customers.
Customers’ funds in dynamics, mln roubles
Total funds
Private deposits
Corporate funds
The net income of the Bank in 2010 increased by 40% and comprised 1.9 bln roubles.
Table 3
Main figures of profit and loss reports in dynamics
(thousand roubles)
Name of article
rate, %
Interest income, total, including:
Deposits of funds in credit institutions
Loans provided to customers (non-credit institutions)
Investments to securities
Interest costs, total, including:
Attracted funds of credit institutions
Attracted funds of the customers (non-credit institutions)
Debt obligations
Changes in provisions for possible losses for loans, loan debts
and similar obligations, funds in correspondent accounts and
accrued interest incomes.
2 595 814
78 889
2 158 034
358 891
1 356 606
50 789
1 304 618
1 199
2 833 804
100 811
2 518 691
214 302
1 372 695
120 890
1 249 717
2 088
- 182 745
-880 835
Net interest income after provisioning for possible losses
Net incomes from operations with securities
Net incomes from operations with foreign currency, including
Income from participation in capital of other companies
Net commission incomes
Changes in provisions for possible losses for securities and
other losses
Other operational incomes
Net incomes (costs)
Operational costs
Profit before taxes
Accrued (paid) taxes
Profit (loss) for accounting period
1 056 463
580 274
59 197
19 625
43 405
704 784
558 615
-100 936
-40 516
266 525
1 946 375
1 386 883
559 492
281 542
277 950
187 272
1 389 088
1 160 215
228 873
192 927
35 946
Net interest incomes prevail in the structure of net incomes, their share comprises 54.3%. During
2010 net interest incomes grew by 82.1% and comprised 1.1 bln roubles. Lending incomes prevail
in the structure of interest incomes, their share comprises 83.1%. In spite of the growth of lending
volumes in 2010, the interest incomes from the loans provided to customers decreased by 14%
and comprised 2.2 bln roubles. Decreasing incomes from lending operations in 2010 is a lagged
effect from decreasing volumes of such operations in 2009, when the loan portfolio decreased by
15.8%, which is also explained by decrease of interest rates for loans in 2010.
Net commission incomes of the Bank comprise 36.2% in the structure of the net incomes. Net
commission incomes of the Bank in 2010 grew by 26.2% and totaled 704.8 mln roubles. Cash and
settlement incomes prevail among commission incomes – more than 55% or 424.9 mln roubles.
During 2010 these incomes grew by 10.7%. In 2010 commission incomes from operations related
to private household payments also increased. Commission incomes from operation for receipt of
such payments in 2010 comprised 66.4 mln roubles, having increased by 7.6% during the year.
The incomes of the Bank from performance on securities market in 2010 including interest incomes
from investments to securities and net incomes from transactions with securities comprised 358.5
mln roubles, which exceeded similar figures for 2009 by 31.1%.
Net incomes from foreign currency transactions reduced by 53.4% and comprised 34 mln roubles;
revaluation losses in 2010 decreased in comparison with 2009 and comprised 14.4 mln roubles.
Reduction of incomes from foreign exchange operations is caused by reduction of demand for
such service.
Upon the results of 2010 the Bank’s profit before taxes was equal to 559.5 mln roubles that
exceeded similar figure for 2009 by 145% (or more than 2 times). The main reason for profit
increase is reduction of costs for provisions for possible losses from loans, principal receivable and
other similar debt; from funds on corresponded accounts, and from accrued interest incomes.
Reduction of such costs in 2010 in comparison to 2009 was equal to 79.3%. Decrease of costs for
provisioning from possible losses is related to gradual improving economic environment in Russia
that leads to recovering of economic activity of companies and people, and growth of their payment
ability. The net profit of the Bank upon the results of 2010 increased by 673% and comprised 277.9
mln roubles as of 01.01.2011.
Corporate business
The Bank provides a variety of financial services to its corporate customers taking into account
requirements, industrial peculiarities, size of business, etc. There are defense enterprises,
companies from ferrous and non-ferrous metallurgy, chemical industry, machine building, food
industry, travel and trade companies, educational institutions and companies from other areas of
economy among the customers of the Bank.
As of 01.01.2011 there were more than 23 corporate customers in the Bank, increase of the
number of customers comparing to 2010 comprised more than 1300 customers. The number of
corporate accounts opened in CHELINDBANK is equal to 19.4% of the total number of corporate
accounts in Chelyabinsk region. The number of customers using remote services such as
“Customer+Bank” and “Customer+Bank Online” increased. There are more than 11 thousand
corporate customers having access to remote services.
In 2010 the Bank was actively improving existing services, developing relations with present
customers and attracting new customers.
CHELINDBANK became the first bank of the South Urals to participate in electronic trades to win
the right to provide services for budget accounts. Some of the Bank’s regional branches entered
into contracts with the Regional Department of Pension Fund, Federal Treasury departments,
Chelyabenergo, departments of Social insurance funds, and administration of several municipal
districts of the region. The decision to give the branches of CHELINDBANK the right to enter into
state contract was made on the basis of consideration of applications made by the banks including
participation in electronic trades.
In 2010 CHELINDBANK entered into the Customs payment system “Green channel”, which allows
participants of foreign economic activity making customs and other payments by card in the
process of customs clearing directly in the customs points through the terminals installed there.
CHELINDBANK is a direct participant of Bank electronic time payments (BETP) of the Bank of
Russia. In May 2010 the Bank allowed its customers a new kind of service – transfer of money
funds in roubles through BETP system. Transfers mad through BETP have the following
advantages for the customers:
* increasing speed of settlements between counter agents, which is specifically urgent for
companies that receive services and products only on a post-payment basis;
* guarantee for instant deposit of money into account of the payment receiver.
In July 2010 the Bank improved transfer conditions for BETP by reducing the minimal amount of
The Ministry of Finance of the Russian Federation included CHELINDBAN into the register of
authorized banks, which guarantees can serve as security for faster VAT reimbursement by tax
authorities of the Russian Federation.
In 2010 the Federal customs service of the Russian Federation second time included
CHELINDBANK and Magnitogorsk branch of CHELINDBANK into the register of financial
organizations that can act as guarantors for customs authorities.
Own settlement center, wide correspondent network, participation in international payment SWIFT
system, own automated systems for processing of payments allow fulfilling customers’ orders for
money transactions in the shortest possible period of time into different countries with favorable
price terms. The Bank is constantly expanding its correspondent network. As of 01.01.2011 the
network of the banks – CHELINDBANK correspondents is represented by 260 banks in 47
countries of the world.
Correspondent network of
Total number of banks
Pic 4.
Corporate customers of the Bank can use various financing tools including various types of lending
in roubles and foreign currency, trade financing, guarantees. The loan portfolio for corporate
customers comprised 8.2 bln roubles as of 01.01.2011 showing an increase by 6.9% since the
beginning of the year.
Small business lending was actively developing in 2010. This lending area is present in the Bank
for more than 8 years. Taking into account customers that represent small business, and trends
being formed in this segment of lending, the Bank is improving existing and developing new small
business lending programs. In 2010 the Bank had special programs for small business: a loan for
business development, unsecured loans, as well as lending for personal needs – “Mortgages for
entrepreneurs” and “Car loans for entrepreneurs”. In total, as of 01.01.2011, the Bank provided
more than 4 thousand loans to small business for the total amount of 2.5 bln roubles that exceeded
similar figure as of 01.01.2010 by 55.7%. In October-November 2010 a special advertising
campaign called “Get a loan – help children” was held for the customers of the Bank that
represented small business sector. More than two hundred customers became the participants of
the campaign. Part of the bank’s commissions paid by the customers during the campaign was
transferred by the Bank to thirteen disabled children from poor families in the town of Kyshtym,
Chelyabinsk region.
The following types of business prevail in small business sector: wholesale and retail trading;
processing manufacturing companies, repair of household facilities, real estate operations, car
repair. Such areas of activity are represented in the portfolio structure as building, household
services, transport, communications and financial activities.
The Bank is cooperating with the European Bank for Reconstruction and Development (EBRD),
which provides loan resources to CHELINDBANK. As of 01.01.2011 the total amount of liabilities of
the Bank for EBRD loans for small and medium business development was equal to 625 thousand
USD and 156 mln roubles.
CHELINDBANK became the first bank-partner of JSC Russian Bank for Development (RosBR) in
Chelyabinsk Region for implementation of the state program of support for small and medium
business. RosBR two times provided target loans to CHELINDBANK to support small and medium
business in the amount of 200 mln and 198 mln roubles for the period of 3 years each. These
funds were used for providing loans to companies operating in the real sector of economy. RosBR
loans were fully paid by the Bank in 2010.
CHELINDBANK is accredited by the Fund for support of small business lending in Chelyabinsk
region for participation in the Small Business Support Programm. Participation in this program
provides the Bank with opportunity to give loans to small business companies under the guarantee
of the regional guarantee fund. Thus, those entrepreneurs are seeking loan funds, but having no
opportunity to provide the Bank with securities for the loan in full amount, get access to credit
funds. The Bank provided loans for the amount of more than 47 mln roubles under this program.
The Bank is actively developing leasing services. ChelIndLeasing (the Bank’s leasing company)
enters into leasing agreements for purchase of trucks and cars, buildings and constructions,
industrial equipment, entertainment equipment, office facilities. The growth of portfolio of existing
leasing agreements comprised 47.9% or 1.3 bln roubles. During 2010 the company signed new
agreements for the total amount of 2 bln roubles that exceeded the similar figure of 2009 by 139%.
The Russian association of leasing companies made an investigation of the leasing market for 9
months of 2010. The goal of investigation was to create analytical review of the sector and
combine rankings of leasing companies by volume of new business. 57 leasing companies having
not less than 60% of the Russian leasing market took part in questionnaires. Upon the result of
such questionnaires ChelIndLeasing took:
1st place among regional leasing companies;
3rd place among leasing companies of the Urals region;
21st place among Russian leasing companies.
CHELINDBANK offers its customers wide range of trade financing services:
* direct lending within export/import contracts;
* confirmed letters of credit with postponed payment;
* documentary letters of credit with post-financing option.
As of 01.01.2011 trade financing credit lines established by foreign and Russian banks for
Chelindbank comprised about 30 mln USD. Usage of such financing tools allows customers
significantly making cheaper the costs for payment for foreign trade contracts in comparison with
classic lending. Such credit lines are represented by such banks as VTB, Germany;
Commerzbank, Germany, Reiffeisen Bank, Austria, and EBRD, England.
In 2010 there was a boost of volumes and number of foreign trade operations among corporate
customers of the Bank. The foreign trade turnover of the activity of the Bank’s customers increased
by 54% in 2010, number of transaction passports documented grew by 185.
Number of transaction passports by the type of contract
export of goods
import of goods
export of services
import of services
disbursed loans
attracted loans
Pic. 5
In December 2010 CHELINDBANK proposed a service for settlements under foreign trade
contracts to its customers – transfers in Chinese yuans for payments made to Chinese companies.
Payments in Chinese yans are more profitable than payments in USD and allow calculating foreign
exchange risks by avoiding double conversion during settlements with Chinese partners.
In 2010 the Bank increased volumes of purchasing discounted bank promissory notes nominated
in roubles. The growth of volumes of such operations comprised 148.3%.
In 2010 new package products were developed and implemented, various promotion campaigns
took place, the work with corporate customers was improved.
Special price plans were developed for corporate customers based on cross-sales principles:
”Anniversary” and “Comfortable” devoted to 20th anniversary of the Bank. “Anniversary” price plan
gave 20% discount for 20 services of the Bank. “Comfortable” price plan proposed a 25% discount to
customers for main services of the Bank at the moment of signing a loan agreement with the Bank or
leasing agreement with a subsidiary leasing company of the Bank and simultaneous opening of
settlement account in roubles provided that there was no account in the Bank at the time of signing
the agreement.
Unsecured lending was promoted among small business representatives – loans with reduced
interest rate with a term up to 12 months.
In 2010 the Bank together with partners held a number of workshops for corporate customers within th
program “Improving financial awareness of customers”. During workshops attendants were given upto-date information about recent changes in legal, tax and account aspects of the activity of
companies as well as information for efficient usage of modern financial instruments and services.
In April and October 2010 specialists of the Bank made reports at two conferences “Optimization of
expenses for companies participating in foreign trade activities during settlements and financing of
foreign trade contracts” arranged by Foreign Economic Cooperation Committee of the South Urals
Chamber of Commerce in Chelyabinsk and Miass.
Retail market
Number of private customers of the Bank exceeded 580 thousand. The Bank had 21.2% of private
accounts on the basis of banking account agreement or deposit agreement from the total amount
of accounts of such categories opened in credit institutions of Chelyabinsk region.
CHELINDBANK traditionally holds strong positions in the sector of private deposits. At the moment
there are more than 500 thousand private accounts opened by residents of Chelyabinsk and
Sverdlovsk regions.
CHELINDBANK is a member of deposit insurance system. The product line of the Bank consists of
deposits in three main currencies – Russian rouble, US dollar, and Euro. The Bank offers call and
rime deposits, deposits with various methods of interest calculation and fund storage, pension
CHELINDBANK is authorized by the State Corporation “Deposit Insurance Agency” (DIA). In
December 2010 as the result of competition CHELINDBANK was chosen as one of the agentbanks to pay reimbursement to depositors of “Monetny Dom” Bank in 11 municipal districts of
Chelyabinsk region. Since December 2010, in accordance with the agent agreement the Bank on
behalf and at the expense of DIA accepts applications and make reimbursement payments for
deposits in “Monetny dom”.
To define channels of communication for every group of customers the specialists of the Bank
worked out segmentation and packaging of banking services of retail market by the main target
Retail loan portfolio comprised 4.4 bln roubles as of January 1, 2011 showing the increase of
16.5% since the beginning of the year. The Bank offers private customers the following lending
products: consumer loans, car loans, salary project loans, mortgage loans for purchase of
residential property and improvement of living conditions, credit cards.
In accordance with RBC Rating CHELINDBANK holds 36th place among the Russian banks by the
number of car loans provided in 2010. The portfolio of car loans of the Bank at the beginning of
2011 exceeded 504 mln roubles, which comprised 11.6% of the total principal receivable of private
customers. Car loan products of the Bank are constantly renewing, and loan conditions are
becoming more and more favorable for customers. “All inclusive” car loan product is extremely
popular among the customers – a car loan is provided for the term up to 5 years together with
VISA credit card with revolving credit limit.
The Bank pays attention to lending of the employees of the companies who entered into
agreements with the Bank for transfer of their salary to debit cards of the Bank. This category of
borrowers is the least risky one in terms of payment ability. The loan portfolio within “salary
projects” comprised 973.5 mln roubles or 22.4% of the retail loan portfolio as of 01.01.2011. This
service was provided to more than 31 thousand customers.
Since June 2010 CHELINDBANK started issuing credit cards with grace period. A cardholder is
able to use loan funds free of charge during a certain limit of time called grace period provided that
before the end of the grace period the amount spent will be fully paid back. As of 01.01.2011 the
Bank issued more than 10 thousand credit cards.
The Bank offers both own mortgage loan programs and programs of the partners. The Bank works
in cooperation with EBRD and Delta Credit Bank within mortgage programs. Customers of
CHELINDBANK actively use maternity funds applying for mortgage loans. There is an individual
payment schedule for loans with maternity funds in accordance with which until the funds are
transferred from the Pension fund the borrower pays only interests for the loan. Taking into
account short term of such loans, the Bank does not require life and employment insurance for the
borrower, as well as no pledge is needed.
CHELINDBANK took part in national residential project for 2008-2010 in Chelyabinsk region. The
Bank was authorized to provide service for target accounts of customers who receive budget funds
for purchase and construction of residential property.
“Istok” branch takes part in city program for free subsidies for purchase or construction of
residential property in 2008-2011 provided to employees of companies – members of ROSATOM
state corporations. In the result of the competition CHELINDBANK acquired the status of
authorized bank for working with accounts of employees of the main enterprise of Snezhinsk –
Federal State Unitary Enterprise «Russian Federal Nuclear Center — All-Russian Research
Institute of Technical Physics named after Academician Zababakhin» - who have certificates for
such subsidies.
The Bank tries to be very loyal to those customers who have positive credit history. There are
special offers for such categories of customers – unsecured loans, credit cards without commission
for the first issue of the card, reduction of interest rates by 1 point for some of loan products.
To increase sales of products and services in the Bank, and to increase customer service quality
the Bank actively uses cross-sale tools, holds different retail lending campaigns. For instance, the
Bank arranged a campaign called “School is coming soon!” for parents of pupils, during which the
loans with special rate were presented. At the beginning of summer period the Bank launched a
new loan product called “Vacation – All Inclusive” when together with the funds to pay for a tour
customers received a credit card to cover their expenses during the trip. In autumn 2010 a
campaign devoted to the 20th anniversary of the Bank was launched, during which there was a
20% discount for the existing interest rate.
In autumn 2010 the Bank started implementing new Internet-Bank for private customers that was
developed taking into account all modern requirements to functionality and security of transactions.
With the help of such system the customers are able to make various transactions and follow the
movements in their accounts. Using Internet-Bank VISA card holders can see all updated
information about its balance, as well they can pay for different services. Customers evaluated this
system, and it already has about 3 thousand subscribers.
The Bank is actively developing commission services to people. One of the main services is receipt
of private household payments. This service is provided on the basis of the System of Receipt of
Private Payments (SRPP). SRPP allows making transactions with suppliers at the day of payment,
and the payment can be made to any contractor including those, which do not have any agreement
with the Bank. The borrowers can pay for their loans in any office of the Bank. Besides, customers
of the Bank are allowed to make payments through Internet-Bank via mobile phone and ATMs.
Since August 2010 CHELINDBANK started to implement a new project – Payment Agent, the goal
of which is to develop private payment services for people living in small towns and villages of
Chelyabinsk region. Those companies that provide any services to people should enter into agent
agreement with the Bank and start accepting payments from local citizens for household, phone,
state fees, traffic fines, and many others. The first agent point was opened on August 2, 2010 in
Uvelskiy village in the building of Household Department. As of 01.01.2011 4 points of payment
services were opened.
The Bank entered into agreements and exchanged registers with many large organizations of
Chelyabinsk region: Uralsvyazinform, Rostelecom, Chelyabenergosbyt, Regiongas, Department for
Federal Migration Services, Department for Federal Bailiff Service, Non-departmental Security
Service Office, Department of the Ministry of Justice, Department of the Federal Tax Service for
Chelyabinsk region, and most of household service companies. The Bank is able to accept
payments for more than 500 organizations serviced in the Department for Municipal Treasury of
Chelyabinsk (kindergartens, schools, etc.)
CHELINDBANK is working on plastic card market since 1994. In 1996 CHELINDBANK was the
first bank to become the Principal member of VISA International association. In 2003 the Bank
received an acquiring license for processing of VISA cards in trade and sale points. The Bank is
currently issuing several types of cards designed for different categories of customers: Visa
Electron, VISA Classic, VISA Gold, VISA Business, VISA Platinum.
CHELINDBAK takes the 37th place in the rating of the leading Russian banks by number of plastic
cards (according to RBC rating). In 2010 the Bank issued more than 81 thousand cards, the total
number of issued cards as of 01.01.2011 is more than 326 thousand VISA cards. The balances of
card accounts reached 2.0 bln roubles as of 01.01.2011 and increased by 18.2%. About 2500
companies transfer salaries to the cards issued by CHELINDBANK. Own card service network
includes 143 ATMs in Chelyabinsk and Chelyabinsk region, and 477 terminals in the sale points.
The Bank is constantly increasing the number of service points. During 2010 6 new ATMs were
settled in the cities of Chelyabinsk region. CHELINDBANK holds 59th position among the list of the
banks having the most number of ATMs.
Area of implementation of the cards of the Bank is constantly expanding. Co-branding card
projects were developed for these purposes. The number of co-branding cards issued by
CHELINDBANK is more than 67 thousand. CHELINDBANK issues VISA Electron – transport card,
which can be used not only for payments in the shops and cash withdrawals, but also to pay the
fees in public transport. The joint project with Yuzhural-ASKO insurance company when those
customers who apply for insurance payments are given a co-branding card to receive insurance is
successfully developing. In some companies the Bank is issuing Bon Appetit local cards to pay in
the canteens of the enterprises. By now there are more than 14 thousand Bon Appetit cards issued
by the Bank.
Card holders can also use other services of the Bank, such as SMS-informing and payments via
ATMS. They also can add funds to their deposit accounts from VISA card via ATMs. The most of
the advantages are presented to those customers who use Internet-Bank system.
To stimulate non-cash transactions in Chelyabinsk and Sverdlovsk regions CHELINDBANK
together with partners is successfully implementing discount program “It’s convenient”. According
to this program, customers who use VISA cards for payments are given a discount. The goal of this
program is to promote non-cash settlements. Participants of this program are holders of any debit
and credit cards issued by CHELINDBANK. To get a discount a card holder should just pay for any
good or service with the card of the bank. For the moment there are 80 partners of the Bank, which
take part in this program.
CHELINDBANK makes money transfers upon the orders of customers through various transfer
system including SWIFT. For the moment the Bank is cooperating with Western Union, MIGOM
and BLIZKO. CHELINDBANK also makes transfers in USD with deposit of money in Chinese
yuans in the account of the customer. Money transfer services are available in any office of the
Before its 20th anniversary CHELINDBANK held a photo competition under the title “Give smiles to
each other”. This competition was supported by mass media, publishing house and design studio.
More than 500 photos took part in the competition. Three winners were presented LCD TV sets,
other participants were given remarkable gifts from partners. The photos from competition were
placed in the hall of the Head Office of the Bank. In December 2010 CHELINDBANK held a New
Year campaign for private customers. Customers of the Bank took part in the lotto and received
gifts from the Bank.
The main goal of events held by the Bank – constant increasing of sales and number of products
and services, development of new approaches in customer relations.
Improvement of banking technologies
CHELINDBANK has automated informational system (AIS), which consists of automated banking
system (ABS), processing system and authorization of transactions for plastic cards, card storage
and other integrated modules. Specialized services of the Bank deal with development, integration,
maintenance and accompanying of AIS software, development and maintenance of environment of
telecommunications and plastic business, purchase and maintenance of office facilities.
In 2010 the following main projects for development of infrastructure and software were completed:
 modernization of the main and reserve centers for data processing;
modernization of network center of the Head office of the Bank;
international PCI/DSS certification is completed (informational security in plastic business)
new servers for operation of ABS of the Head office were launched;
the following software was launched
Client+Bank online2;
Software for individual generation of key materials by customers for remote banking
Software for cooperation with the National Bureau of Credit Histories in terms of unification
and automation of credit history requests;
Software for organization of payment of insurances for “Monetny dom” depositors;
Software for change of crypto protection in the system of remote banking service into
certificated ones;
Software for accounting of corporate deposits.
Human Resources
Highly skilled staff is one of the competitive advantages of the Bank, and HR policy is the key
element of the Strategy for development of the Bank. In 2010 the main efforts of the Bank in terms
of HR management were aimed at:
retention of professional employees;
improvement of skills of the staff;
implementation of motivation policy;
increase of personal interest of employees during fulfillment of tasks in terms of business
development and customer service quality improvement.
The Bank is looking forward to become convenient for customers, that is why it sticks to the
policy of structural optimization. The main goal of such optimization is to improve customer
service quality and increase level of sales. The Bank tries to find the right place for every
employee and does its best to make the process of optimization comfortable for the staff.
In spite of crisis the number of the Bank’s employees remained on the same level – 1.8 thousand
people. The labor turnover in 2010 comprised 8%. The Bank promptly pays decent and stable
salaries to its employees.
Scale and completeness of banking processes require special skills and training, and the Bank
pays significant attention to teaching and training questions. The Bank uses different forms and
methods, such as internal and external training, online workshops, practice and exchange of
experience. Self-education is done by means of constantly updated online library including 8
areas: “Management”, “Personal efficiency”, “HR technologies”, “Marketing and sales”, “Time
management”, and others.
In 2010 1342 employees (74% of the total number of employees) took part in education events,
372 (27.7%) of them – external courses, and 958 (71.3%) – internal training. 13 (1%) practical job
tours were arranged.
The Bank has a special classroom equipped with the best modern technical devices to hold
internal training.
During studies of modern technologies of banking operations, methods of communication with
customers, and in the course of practical training the Bank prefers internal form of education. And
traditionally internal training is done by highly skilled employees of the Bank who took part in
external training.
The Bank is working on creation of the staff reserve for the purposes of organization of prompt
competition to fill the vacancies of top managers by highly professional specialists and increase of
the level of the management staff. In 2010 11 specialists from the staff reserve were appointed to
the higher positions.
To reveal perspective young specialists the Bank successfully cooperates with the leading
universities of Chelyabinsk. 66 students had a practical job tour in the Bank in 2010. Upon the
results of the tours 6 of them were offered a job in the Bank.
Since April till October 2010 a professional competition devoted to the 20th anniversary of the Bank
was held under the title “Your favorite specialist”. The competition was held among the employees
dealing with private customers. Customers of the Bank filled in special forms and evaluated quality
of customer service provided by the specialists of the Bank. The results of the competition were
announced on a monthly basis. The winners of the month were given plates – “Yor favorite
specialist of the month” – to put it on their desks. Upon the final results the winners were presented
lap tops.
Table 4
Energy resources used by CHELINDBANK in 2010
Type of energy resource
Natural expenses
Thermal energy
8 681 gigacalories
Electric energy
3 821 183 kilowatt
Car petrol
300 264 liters
Diesel fuel
873 liters
Money expenses
7,5 mln roubles
13,7 mln roubles
7,7 mln roubles
14,2 mln roubles
In accordance with requirements of the Federal law dated as of November 23, 2009 №261-FZ On
“Energy saving and increasing energy efficiency, and on making amendments into separated
legislative acts of the Russian Federation” CHELINDBANK takes measures for energy savings,
fulfils permanent control over energy expenses:
1. All premises of the Bank are equipped by accounting devices with lowered energy consumption
and high accuracy.
2. Automated communication devices are used for control of light.
3. Time relay for automatic switching on of devices are used to save electric energy.
4. Automatic charger with low level of energy consumption is used to charge accumulator batteries
of autonomous diesel electricity station.
5. Automatic regulators of heat carrier consumption and electronic heat counters are installed.
6. Energy saving lamps are installed in the buildings.
7. All routs of the transport of CHELINDBANK are fulfilled in accordance with the route lists. The
Bank is working on optimization of the routes, reduction of working pauses, and improvement of
drivers’ professional skills.
8. Quality of technical maintenance and repair is improved.
9. Accounting and planning forms are improved: control over accounting fuel consumption,
implementation of consumption norms, organization of competition for fuel saving.
Such measures allow removing overloads in electricity networks, reducing consumption of energy
used by the Bank in the process of its performance.
Taking into account external environment and evaluation of position of CHELINDBANK in the banking
market, the Board of Directors of the Bank approved the Strategy for stable development. First of all
this strategy supposes further development of the Bank within its mission as major universal Bank of
the Urals region. The model of business – technological provision of the main banking services for
companies, organizations and their employees, sole traders and people in the Urals region, mainly in
Chelyabinsk region.
The main areas of performance of the Bank within Stable Development Strategy:
1. permanent increasing of business volumes in the main area of the Bank’s performance for the
purposes of constant growth of incomes from banking services;
2. retention high liquidity and capital adequacy ratios, adequate level of provisions for loans,
maintenance of compliance of assets and liabilities to provide stable development of the Bank;
3. quality growth of the loan portfolio and increase of its diversification with improving the share of
retail loans and loans to small and medium business, reduction of arrears till 5% and less to
customers’ loan portfolio, reduction of losses for loans;
4. making amendments into credit policy to make loan products more available to all types of
borrowers due to simplification of decision-making procedures, higher diversification of rates and
terms depending on the risk level;
5. increasing customer-oriented approach of the Bank’s performance through improvement of
customer relations both with corporate and retail customers for the purposes of more efficient
promotion of products and services;
6. implementation of new banking and informational technologies should become the basis to
improve customer service;
7. development of remote banking systems and self-service banking systems;
8. considerable increase of attracted interbank loans for the purposes of growth of the loan portfolio
and diversification of resource base of the Bank. It will require transition to a completely new level
of cooperation with financial institutions.
9. implementation of new banking technologies that should lead to changes in structure of
specialization with increase of specialists dealing with customer service and complex sales of
products and services;
10. permanent improvement of existing business model by means of gradual changes for the
purposes of strengthening of such competitive advantages of the Bank as trust of customers,
availability of the Bank’s services for wide range of customers, high level of customer service,
prompt decision-making;
11. constant monitoring of target fulfillment, analysis of competitive environment, prompt correction of
target indicators and business plans in structural departments of the Bank.
Key performance indicators have been developed for the purposes of maintaining permanent
control over implementation of the Strategy. Fulfillment of key indicators will be analyzed on a
quarterly basis. Implementation plan 2011-2012 has been developed for gradual implementation of
the Strategy.
The General annual shareholders meeting made a decision on May 27, 2010 about accrual of
dividends upon the results of performance of the Bank for 2009 by using the following calculation:
4 kopecks per one ordinary share and 15 kopecks per one privileged share. Dividends were
accrued and paid on June 8, 2010. 32669.7 thousand rubles was used for payment of dividends
that was equal to 90.9% of the net profit of the Bank for 2008.
The Bank is going to stick to transparent informational policy and follow the main principles of
corporate governance. The Bank will annually use not less than 10% of the net profit for payment
of dividends.
Taking risks is the main constituent part of any financial business. Independent and complex
approach to risk management in the Bank is ensured by Risk Management Department. The Bank
is dealing with the following types of risks: credit, market, liquidity, general interest, operational,
legal, risk of loss of business reputation. The process of risk management consists of the following
stages: identification, evaluation and control over the risks taken by the Bank. During identification
stage the events that lead to appearance of risks should be identified. During evaluation the
amounts of expected and unexpected losses caused by the risk should be estimated. Control
stage consists of creation of limit system and implementation of other restrictions for the actions of
the Bank, and control over their fulfillment.
Methods for risk minimization and optimization used by the Bank are in compliance with the law
and normative acts of the Bank of Russia, professional standards and business ethics. Reduction
of risks is ensured by means for unification of business processes, automation of banking
operations with the help of modern automated banking system, development of cooperation
system between structural divisions, provisioning of supplying systems, archiving information, and
internal accounting of business processes.
Credit risk management
Credit risk management is a constituent part of risk management of the Bank in general and is in
accordance with the General Manual for risk management of the Bank approved by the Board of
directors of the Bank.
The Bank sets the limits of credit risks for separate borrowers or for the groups of interrelated
borrowers. Separate duties for setting limits of credit risks are delegated to the Board, Credit
Committee and branches of the Bank. The duties are regularly (annually) revised. The assets and
liabilities Committee is authorized to set limits to banks – counteragents. The limits are set and
revised on a monthly basis. The Bank controls fulfillment of credit risks on a daily basis. The Bank
is working on the system of internal ratings for the purposes of evaluation of credit losses for
individual loans.
Operational risk management
The Bank adapted and approved the Main principles of operational risk management, the
Procedure for maintenance of database of events related to operational risk, the Procedure for key
indicators of operational risk. The Bank collects and analyses the statistics of losses from
operational risk. The corresponding database is maintained. The issues of operational risk are
reflected during development of provisions and procedures for services (products). In case of
changes in organizational structure of the Bank it sticks to strict principles of responsibility and
reporting. There are working plans for operations in emergency situations.
Market risk management
The Bank is subject to market risk related with open market positions in foreign currency, interest
and share financial instruments, which are subject to general and specific changes in the economy.
The total limit for investments into share financial tools is set by the Board of Directors. Limits for
investments into share tools of particular issuers are set by the Board of the Bank. There is a
monthly calculation of the market risk in accordance with requirements of the Bank of Russia.
There is a calculation of open currency positions, examination of compliance with the limits of open
currency position, and distribution of such limit among branches.
Interest risk management
To manage interest risk the Bank distributes assets and liabilities by terms of repayment (changes
of interest rates), and calculates gaps between assets and liabilities for every time period. The
Bank includes into agreements possibility for interest rate changes in case of changes of basic
interest rates. The Management of the Bank sets limits regarding accepted level of differences in
interest rates.
Liquidity risk management
At the moment liquidity in CHELINDBANK liquidity management is done by means of setting limits
for active time operations and limits of short-term lending. These limits guarantee fulfillment of
liquidity ratios set by the Bank of Russia for current and long-term liquidity. The limits are revised
on a monthly basis (or more often if necessary) and controlled by the Treasury through the system
of sales of time resources among branches. The limits of lending volumes are regulated by Risk
Management Department. The limits are set for the balances of the correspondent accounts;
management of cash volumes is also fulfilled. The Internal control service regularly fulfils complex
monitoring of liquidity management procedures.
The main goal of risk management in the Bank is to maintain risk on the level not threatening to the
interests of creditors (including depositors) and shareholders, which supposes compliance of the
risks taken to the amount and structure of the capital.
To improve risk management system reports on possible losses were made upon the results of
every quarter in 2010; possible losses were adequately evaluated. Due to crisis events happening
in the economics there was a revision of limits set for investments of the Bank into securities. The
limits for banks and evaluation of their financial standing are done on a monthly basis for the
purposes of creation of provisions for possible losses. The conditions of existing system of credit
risks limit control was analyzed in 2010, relevant changes were made. Besides, internal documents
of the Bank regulating credit, liquidity and market risk management, are constantly being amended.
The list of factors, which can have negative impact on the basic performance of the Bank in 2011:
1. Decrease of return rate of banking operations including loan interest rates;
2. Growth of inflation rate;
3. Increased risks for lending of the real sector of economy and people;
4. Strengthening of positions of state-owned banks.
To exclude or reduce influence of the mentioned factors CHELINDBANK takes the following
1. Creation of system of forecasting and evaluation of influence of external environment on
performance of the Bank consisting of financial modeling, stress-testing; the strategic plan for
development of the Bank is being working out.
2. Together with associations of Russian banks the Bank takes part in development of drafts of
normative documents, which regulate different spheres of banking activity;
3. To reduce credit risks there are internal procedures of evaluation of payment ability of
borrowers, and permanent risk monitoring. The Bank entered into agreement with Interregional
Bureau of credit histories, as well as with the Bureau of credit histories EQUIFAX Credit Services,
LLC. Cooperation with these bureaus allows to receive information about fulfillment of obligations
by the borrowers.
4. Fulfillment of active work for storage and increase of customers’ database, permanent control
over the banking services market, on the basis of which new technologies are developed and
existing technologies are improved.
In 2009 CHELINDBANK had no transactions considered to be major transactions in accordance
with the Federal Law “On Joint-Stock Companies”, and other transactions which require approval
of the deal in accordance with the Charter of the Bank.
During the accounting year the members of the Board and the Board of Directors of the Bank
made 14 transactions with interest involved. The amount of transactions related to application for
the loan and documentation of the pledge comprised 1 000 277 thousand roubles, related to
setting limits for credit cards – 15 thousand Euro. All transactions were made in accordance with
market conditions after they had been approved by the Board of Directors of the Bank.
The list of members of the Board of Directors of the Bank, and the share of participation of
members of the Board of Directors in the Share capital of the Bank are given in Annex 1 to the
Annual Report.
Information about General Director and members of the Board of CHELINDBANK, and their share
of participation in the Share capital of the Bank is given in Annex 2 to the Annual Report.
In 2010 all payments to the members of the Board of Directors of the Bank were done in
accordance with the Regulations for remunerations and compensations paid to the members of the
Board of Directors.
The total amount of compensation for the last financial year paid to the members of the Board of
Directors, which are not members of the staff of the Bank in accordance with decision of the
General Annual Shareholders’ Meeting dated May 27, 2010 comprised 416 thousand roubles.
The total amount of compensation for 2010 paid to the members of the Board of Directors which
are members of the staff of the Bank (including General Director) was equal to 19898.5 thousand
The total amount of compensation for 2010 paid to the members of the Board of the Bank
comprised 23 772.9 thousand roubles.
Compliance with the Corporate Governance Code is aimed at achievement of mutual
understanding between all parties interested in efficient performance of the Bank: shareholders,
customers, partners and employees. Principles which serve as the basis for corporate governance
system and informational transparency of the Bank contribute to strengthening of trust of
shareholders and customers to the management.
In 2010, in accordance with requirements of the existing law, and to provide shareholders and
customers of the Bank with opportunity to make reasonable decision, full and genuine information
about the Bank was promptly disclosed including information about its financial standing, economic
figures, significant events, ownership and management structure. Instant and free access of
interested parties to the disclosed information is done via Mass media, and web-site of the Bank –, as well in the places where services are provided to customers and
The meetings of the Board of directors and executive bodies and committees are held on a regular
basis; the decisions are promptly documented and disclosed to structural departments of the Head
office, branches, customers and shareholders
In 2010, there were 12 meetings of the Board of Directors of the Bank. General Director of the
Bank, Heads of Internal control service, Risk management department, Financial monitoring
department, and other departments of the Bank make regular reports at the meetings of the Board
of Directors
In 2010, the new list of members of the Committees of the Board of Directors of CHELINDBANK
was approved: Strategic Planning Committee (Chairman O.N. Mishin, members – V.G. Kuzmin,
M.V. Chekurova, A.Y.Shatin), Audit and Risk Management Committee (Chairman I.V.Prutyan,
members – Y.I.Chaban, L.N.Litvinenko), Social Policy Committee (Chairman S.I. Kubitskiy,
members – T.P.Kosovskaya, Z.I.Koshalko). The Committees worked in accordance with the plans
approved in 2010.
Strategic Planning Committee, on the basis of information provided by Organizational and
Analytical Division, and on the basis of documents approved by the Board of the Bank, was
permanently maintaining control over fulfillment of basic performance indicators. Regular study of
current reviews, competitive position of the Bank, development trends, and results of the Bank
activity allowed the Bank working out recommendations for correction of existing strategy of the
Bank, and preparing proposals for creation of investment policy of the Bank. Strategic Planning
Committee analyzed and recommended the Strategy for Development of the Bank for 2011-2015
to the Board of Directors for approval. Besides, Strategy Planning Committee arranges events
aimed at improving corporate governance.
Audit and Risk Management Committee worked out the main terms of agreement for audit services
for 2010. The candidatures of audit companies are revised by the Board of Directors, which takes
into account experience, memberships in audit unions and associations, rating of the company.
The choice of auditor is approved by the shareholders’ meeting.
Reports of controllers of professional participants of securities market, as well as the issues related
to risk management: consideration of risks taken by the Bank, results of analysis of database of
events related to operational and legal risks, total limit, and other questions are listened to at the
meetings of the Board of Directors on a quarterly basis. Besides, the Board of Directors approved
normative documents of the Bank related to risk management (credit policy, risk management
policy during banking operations, control over liquidity, etc.)
In terms of internal control, the Board of Directors approved the procedure for Internal control
service for the next year, listens to reports of the Head of Internal control service, makes
amendments into regulations about Internal control service, revises the results of the audit checks
made in the Bank and its branches by audit companies or Bank of Russia.
Social Policy Committee arranges events in the field of control over formation and performance of
the Board of Directors, improvement of material motivation of the staff. The Regulation for
bonuses and compensations paid to the members of the Board of Directors of CHELINDBANK has
been developed and already in use.
Presence of independent directors as the members of the Board of Directors and creation of
permanent bodies within the Board of Directors, such as the Committee for Strategic Planning; the
Committee for Audit and Risk Management; Social Policy Committee are aimed at improving
efficiency and quality of work of the Board of Directors, and providing members of the Board of
Directors with opportunities to participate in all activities related to the management of the Bank
and maintain permanent effective control over executive bodies of the Bank in the most important
CHELINDBANK, General Director
M.I. Bratishkin
CHELINDBANK, Chief Accountant
V.V. Klepikova