Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Joint Stock Company THE STATE EXPORT-IMPORT BANK OF UKRAINE TRADE FINANCE IN UKRAINE: CHALLENGES AND OPPORTUNITIES Kyiv-2015 UKRAINIAN FOREIGN TRADE DYNAMICS 2014-2015 foreign trade turnover suffered severely from unfavorable economic environment 160 100 90 150 80 70 27 65 22 -2.0 -6.7 Chemicals 109 58 60 22 19 51 40 57 15 11 27 30 20 -2.4 -8.7 -1.6 -3.1 -1.6 -2.2 Agriculture products 70 50 Machinery and equipment Mineral products -27% 85 90 Machinery and equipment import considerably declined due to FX devaluation and lack of investment capacity of Ukrainian corporates 40 43 32 10 2014 -1.8 Wood products -37% 2014/2013 y-o-y chng in import, $bln 8 5 17 18 6 3 9 Machinery and equipment export suffered from trade deterioration with the CIS market HY2014 -0.7 -0.5 -0.3 -0.9 HY2015/HY2014 y-o-y chng in import, $bln HY2015 Other import Machinery and equipment import Energy import Goods export Foreign trade turnover, $bln Industrial goods 36 17 2013 -1.8 30 0 2012 Metallurgical products Machinery and equipment Metallurgical products Chemicals Mineral products Source: the NBU Observations: -5.2 Source: the NBU -1.6 -3.5 -2.6 -0.8 -2.1 -1.7 -1.5 Industrial goods -0.9 Wood products Agriculture products evident result of recent challenges for the economy demand for trade finance products substantially declined unutilized (idle) production capacities created untapped potential for growth -1.2 -0.1 -0.3 -0.4 -0.4 HY2015/HY2014 y-o-y chng in export, $bln 2014/2013 y-o-y chng in export, $bln Source: the NBU 1 UKRAINIAN FOREIGN TRADE DYNAMICS (cont’d) Goods import Goods export 20 18 17 17 17 18 15 15 30 17 25 15 -35% 10 10 28 29 27 23 20 8 5 5 17 -45% 13 15 7 -22% 22 15 11 10 7 5 0 5 5 0 Russia Europe Export, 2012 Export, 2013 Asia CIS (excl Rus) Russia Export, 2014 Source: Ukrstat Europe Import, 2012 Import, 2013 Asia CIS (excl Rus) Import, 2014 Reasons: Reasons: deterioration of trade relations with Russia devaluation DCFTA with EU with grace period increased cost of funding, lack of sources Source: Ukrstat lack of confidence between trade parties What is next: trade with Russia is likely to deteriorate further trade with EU is expected to grow once DCFTA with the EU comes into full force in 2016 need of industrial modernization will create demand on high-tech equipment (European countries) unrealized (postponed) foreign trade demand and supply will be satisfied in the near future 2 UKRAINIAN FOREIGN TRADE DYNAMICS (cont’d) Europe and Asia become the major trade partners of Ukraine Trade deficit with Russia is now less then trade surplus with Asia Russia Europe Asia 6 CIS (excl Rus) 4 4 2 1 2 Russia 21% 2 1 +4% Europe 36% as at YE2014 -7% 1 0 Trade balance, 2012 -2 -4 Trade balance, 2013 -3 -65% -6 -5 -8 -10 -12 Trade balance, 2014 -54% -8 -10 -10 -11 Source: Ukrstat Other CIS countries 9% Others 10% Asia 23% Source: Ukrstat -14 Conclusions: fundamental shift in foreign trade geography to Europe and Asia market value of Ukrainian hryvnia contributes to harmonize foreign trade structure and current account balance healthy trade balance contributes to BoP objective which is Target #1 for IMF program successful implementation bottom out trends in the economy are expected and should be closely monitored to catch the momentum 3 CONFIDENCE UNDER IMF UMBRELLA IMF program scenario -6.8% -22% 62 7% 8% 8% 8% 8% 2% 3.5% 4% 4% 4% -9% -25% 55 2014 44 45 46 48 2015 2016 50 52 2017 54 56 58 60 Target #1 2019 Goods imports ($ bln) Real GDP growth (percent) Turnover of goods trade Source: IMF staff report July 22, 2015 guaranteed and state-owned entities Bring the public and publicly guaranteed debt/GDP ratio under 71% of GDP by 2020 Payment capacity objective 2020 Goods exports ($ bln) From external debt payments on the sovereign, sovereignDebt sustainability objective 62 65 Target #2 2018 BoP objective Generate US$15.3 billion savings in public sector financing during the IMF program period Target #3 Keep the budget’s gross financing needs at an average of 10% of GDP in 2019–2025 (maximum of 12% of GDP in any given year) Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), Press Release No. 15/404, September 6, 2015: “I am extremely encouraged by the progress that has been achieved in the past few months. In a difficult environment, macroeconomic stabilization is taking hold and the economy shows signs of turning the corner. This achievement is a tribute to the courageous work of the Ukrainian authorities.” “Policies are on the right track and have started to yield results. The fiscal position is getting stronger, the foreign exchange market has stabilized, and the banking sector is being repaired so that banks are sounder and can start to provide credit again. The recent debt restructuring agreement is a vital complement to economic reforms, and an essential step toward creating fiscal space, external sustainability, and improved confidence.” 4 SUSTAINABLE BANKING SYSTEM TO FACILITATE FOREIGN TRADE Some observations and conclusions: Ukrainian banks will play a crucial role in future trade growth in their capacity of risk absorbers in foreign trade operations; stabilization of banking system enhances financing of trade; NBU takes reasonable measures to stabilize the situation and restore confidence to the Banking system; and first signs of bottom out trends can be already observed: NBU stabilization measures: Cleaning up banking system Administrative measures on FX operations and deposit controls Related party lending issues Bank supervision improvement Bank recapitalization and resolution measures Addressing NPLs Source: IMF staff report July 22, 2015 5 UKREXIMBANK: ON THE RIGHT TRACK Fitch: CCC Moody’s : Ca Successful reprofiling exercise released FX liquidity … the upgrade reflects reduced refinancing risks, as the restructuring of the bank's eurobonds (with a combined nominal value of USD1,475m, or 23% of end-1H15 liabilities under local GAAP) resulted in a significant lengthening of the external debt maturity profile. At end-1H15, the bank's foreign currency liquidity (comprising cash and equivalents and short-term interbank placements) was comfortably sufficient to meet near-term wholesale funding maturities … Fitch press-release August 11,2015 Public debt maturity profile $mln 483 438 198 158 85 2019 2020 2021 2022 2023 75 2024 Diversified loan portfolio 38 YE2014 IFRS 2025 Strong liquidity buffer UAHbln 92% IFRS 92% 91% 79 71 57 62 66 72 2014 1Q2015 HY2015 Liquid assets (cash+AFS sec) Amounts due to customers Liquid assets-to-customer accounts Transport and communications 3% Road construction Power 3% utilities 3% Construction materials 4% Rubber and plastic 5% Metallurgy 5% Engineering 6% Trade 12% Agriculture and food 17% Extractive industry 10% Construction 9% Other 8% Real estate 7% Chemistry 9% 6 UKREXIMBANK: TRADE FINANCE OPERATIONS Ukreximbank clients enjoy TFP lines from EBRD & IFC Trade finance is one of the key directions of the Bank’s activity 1’396 trade finance transactions were performed in the total amount of $3’793 mln starting from 2006 Global trade finance program Share of trade finance funding in the cumulative amount of funds received by the Bank Total limit: $80 mln since 2006 amounts to about 36% 145 transactions in the total amount of $401 mln were financed in 2014 - 2015 despite substantial GDP drop, trade volume decrease and challenging operating environment Total limit : $270 mln Trade finance transactions dynamics (cumulative amount) , $ mln 3,734 3,793 3,392 2,190 2,333 2,477 2,702 Trade finance program Trade finance transactions target structure for 2006-2015, $ mln 2,922 Documentary operation 2,279 1,096 General finance 921 387 2006 2007 2008 2009 2010 2011 2012 2013 2014 8m2015 Source: Ukreximbank Pre-export, pre-import finance & factoring 593 Source: Ukreximbank 7 UKREXIMBANK: COOPERATION WITH LEADING ECAs ECA covered loans (cumulative amounts), $mln Great experience of cooperation with leading ECA 307 Recognition as a direct Borrower / Guarantor by more then 36 world leading ECAs. 136 projects amounting to about $400mln were financed under ECA coverage since 2002. Partnership with leading banks of Europe, Asia, USA and Canada. 333 349 356 362 2009 2010 2011 2012 389 200 130 Prague Club membership. 2006 ECA covered loans by sectors, % Other; 17.7% Building materials Industry; 18.9% 2013 ECA covered loans by countries, % Austria; 3.3% Switzerland; 4.6% Other; 8.8% Germany; 38.4% Japan; 6.3% Pulp and paper industry; 16.3% Engineering; 8.8% Agriculture and food processing; 13.8% 2008 Source: Ukreximbank Metallurgy; 5.3% Extractive industry; 5.4% 2007 Sweden; 1.6% France; 8.7% Production of rubber and plastic goods; 13.9% Source: Ukreximbank Italy; 13.9% Denmark; 14.4% Source: Ukreximbank 8 UKREXIMBANK: IFI RECOGNITION Global Trade Finance Program Energy Efficiency Programme Export Development Project EDP, EDP2 as well as additional financing for EDP2 Total Amount: USD 100 million Total Amount: USD 100 million SME and Energy Efficiency Programme Total Amount: USD 374.5 million Energy Efficiency Project Total Amount: USD 200 million Small- and Medium-Sized Enterprise Program Total Amount: USD 50 million Trade Facilitation Programme Total Amount: USD 40 million Total Amount: USD170 million Program for Modernization of Industry with Positive Environmental Impact Loan for SMEs and Mid-Caps Energy Efficiency Program Total Amount: USD 50 million Total Amount: EUR 100 million Total Amount: USD 30 million 9 KEY MESSAGES Key messages: unrealized (postponed) foreign trade demand and supply will be satisfied in the near future subject to successful implementation of IMF Program, stable growth of economy and increase in foreign trade volumes are anticipated already in 2016 bottom out trends are expected and should be closely monitored to catch the momentum Ukrainian banks should become a driver to facilitate foreign trade growth Ukreximbank is uniquely positioned to serve export-import transactions of Ukrainian companies 10 Disclaimer This presentation prepared by JSC Ukreximbank adheres to informative purposes only. This presentation and its contents are proprietary with all rights reserved by JSC Ukreximbank. Any further dissemination, reproduction, redistribution or unauthorized use of the information provided herein in whole or in part or in any form or manner without prior express consent of JSC Ukreximbank is strictly prohibited. Any information, data, opinion or forecast in JSC Ukreximbank presentation should not be deemed as official, formal or definitive, since it has not been independently verified and merely states our judgment as subject to change without notice. JSC Ukreximbank makes no representation or warranty, expressed or implied, as regards the accuracy, completeness or fairness of the information contained herein. JSC Ukreximbank, all its offices, employees, shareholder or other persons disclaim all liability for accuracy of information and data, any omissions and changes made thereof, or any expense, loss or damage incurred, directly or indirectly, as a result of using or relying upon the content, even if such parties have been advised of the possibility of such damages. Any decision is to be taken at the reader’s sole discretion and must not rely on any information or forecasts provided herein. Any past performance is not indicative for future results. JSC Ukreximbank does not undertake to regularly update or modify the information provided in this presentation, or to make any corrections of errors, inaccuracies or omissions made in view of possibility of human or mechanical error. Objectivity of any opinion may be affected by conflict of interest. This presentation does not constitute or form part of, and should not be construed as an offer or invitation to sell securities of JSC Ukreximbank, or the solicitation of an offer to subscribe for or purchase securities of JSC Ukreximbank, and nothing contained herein shall form the basis of or be relied on in connection with any contract or commitment whatsoever. The recipients of this information are required to consider the appropriateness of any investment decision having regard to their own circumstances, and appeal to any legal or other professional official advice, and make their own independent investigations and appraisals of the business and financial condition of JSC Ukreximbank and the nature of the securities before taking any investment decision with respect the securities of JSC Ukreximbank, and assume all the risks to be undertaken. This presentation may contain future expectations and forward-looking statements referred to the management’s views, estimations, assumptions and anticipations, which comprise possible risk of material deflection of actual results and performance compared to those anticipated. Such forward-looking statements include, without limitation, any statements preceded by, followed by or including the words “targets,” “believes,” “expects,” “aims,” “intends,” “may,” “anticipates,” “would,” “could” or similar expressions or the negative thereof. These forward-looking statements, introduced as at the date of this presentation, are based on numerous opinions and assumptions regarding JSC Ukreximbank’s present and future strategies and are subject to change on the back of macroeconomic and market conditions, changes in legislation and other non-specified factors. All subjects within JSC Ukreximbank structure are in no way responsible for further amending, revising or updating forward-looking statements. All data related to JSC Ukreximbank performance is based on International Financial Reporting Standards, unless otherwise specified. JSC Ukreximbank is regulated and supervised by the National Bank of Ukraine. 11