Moody’s publishes a positive credit opinion on Russia’s International Investment Bank

Moody’s published a positive credit opinion on International Investment Bank (IIB) with the bank – formerly billed as the Soviet era’s answer to Europe’s EBRD – continuing to reinvent itself.
The international rating agency Moody’s Investors Services improved its credit opinion of IIB after meetings with the bank’s management in October.
Set up in Soviet times to foster cooperation and trans-border investment amongst the Comecon countries, the bank has been remaking itself over the last three years as a modern International Financial Institution (IFI) and the transition program officially came to an end at the close of 2015.
Moody’s noted a number of positive developments in its credit opinion that have had a positive impact on the institutional development and the operational activities of the IIB this year.
In May, 2017, Moody’s upgraded IIB’s rating outlook to positive from stable and affirmed IIB’s Baa1 issuer and debt ratings. In addition to the Moody’s Baa1 rating (outlook “positive”), IIB has been assigned ratings of BBB with a stable outlook from S&P and Fitch, as well as an A rating from the Chinese rating agency Dagong (outlook stable).
“The Moody’s opinion confirms the financial stability and the operational efficiency of the Bank. I would like to express my gratitude to the Agency for its positive evaluation of our efforts aimed at enhancing the role of the IIB as an effective multilateral financial institution, which operates in the interests of sustainable development of the economies of its shareholders,”, chairman of the IIB board Kosov said in a statement.
And the agency was pleasantly surprised by the “policy continuity” in the unanimous approval by the member states of the new development strategy that will start next year and run until 2022 as well as the board’s decision to re-elect the IIB’s chairman Nikolay Kosov for another five-year term.
The bank has been active in the last few years investing in the development of the economies of its member states and active development of local capital markets, including the issue of some pioneering local-currency bonds on local exchanges, its bank lending support programme with local partners and more recently its trade financing programme.
In the next strategic cycle IIB expects to deliver a two-fold asset growth and loan portfolio over five years, as well as delivering on more qualitative customer relations improvements, development of flexible products and service offerings in each of its member states.
The bank has also made progress in its risk management and liquidity management framework, according to Moody’s. This year IIB created an “Early Warning Mechanism” and extended the period for its liquidity buffer to 12 months from six months, which is intended to strengthen its stability during the stress tests.
But the proof of the pudding was the consistent assets growth, quality of the treasury portfolio, and funding diversification. IIB’s development assets, mostly loans, increased by around 38% y/y to circa €501mn in the first half of this year from €363mn in the same period a year earlier. The bank has also increased the Aaa-to-A3-rated assets in its portfolio – about 41% of the total volume as of June 30. At the same time, the IIB has expanded its funding to 11 countries as of the first half of 2017.


Russia’s central bank cuts interest rate by 25bp to 8.25%

The Central Bank of Russia (CBR) decided to cut the key interest rate by 25bp at the board of directors meeting on October 27, the regulator said in a much anticipated press release.
A rate cut of 25-50bp was widely expected by analysts as the inflation-minded regulator had the annual inflation overshoot its target of 4% currently amounting to about 3%.
A more aggressive cut of 50bp would have meant that the CBR could prepare to tighten the policy again in the beginning of 2018, some analysts suggested. However, the CBR decided to abstain from an aggressive move and cut the rate by the minimum step of 25bp to 8.25%.
“The CBR’s decision to lower the key rate by 25 bps to 8.25% is in line with market expectations, but turned out to be more cautious than we anticipated,” Gazprombank commented on October 27.
“The board of directors noted that inflation remains close to the target of 4%,” the CBR press-release reads. The CBR argues that the “downwards deviation of inflation is related mainly to one-off temporary factors”.
The regulator has allowed for further rate cuts in the coming meetings in 2017. The decision will take into account the “significant and stable” deviation of inflation from its goal, as well as dynamics of economic activity.
Gazprombank sees that tone of the CBR’s press release as mixed. On one hand it sees the current strong disinflation as temporary and reminds of consistently high inflationary expectations. On the other hand, in medium-term persective risks, both the downsides and upsides of inflation deviations from the 4% target are mentioned.
“Moreover, for the first time in its communique, the CBR included a phrase regarding transition from “moderately tight” to “neutral” monetary policy, which in our view indicates a smooth reduction of the real key rate from the current level of 5.6% to the equilibrium 2.5%,” Gazprombank commented.
Gazprombank expects a 25bp reduction of the key rate at a base case scenario given no negative surprises for the next meeting scheduled for December 15. VTB Capital agrees saying: “We see a 25bp cut at the December meeting as a base case,” on October 27.
“The incoming data for October and November might nudge the Board to opt for a more ambitious cut of 50bp, but this would call for surprises from inflation reports, banking stats and economic activity data to combine into a convincing case,” VTB analysts commented.
The CBR expects inflation to end 2017 at 3.5-3.8%, while the Ministry of Economic Development that needs lower interest rates to help its ambitious 2.1% growth outlook expects 2.7-3.2% inflation in 2017.



vebFrom 25 to 26 September, the first conference of Vnesheconombank’s regional managers was held. The conference brought together managers from 16 Russia’s regions, who had been selected via a multi-stage selection procedure, as well as industry and government officers.

In anticipation of the conference, regional managers from 13 regions submitted 28 projects to VEB to choose from. 16 of the projects that were offered for sectors such as infrastructure, power generation, defence industry diversification, pharmaceuticals, aviation and polymer chemistry meet the Bank’s strategy. The project selection panel consisting of Vnesheconombank’s top mangers shortlisted five best projects. The winner was Chernyakhovsk land port construction project by Oleg Skvortsov, Deputy General Director of Kaliningrad Region Development Corporation.

The opening speaker was Alexey Ivanchenko, Vnesheconombank’s Deputy Chairman and Member of the Management Board. In his welcome address, Mr. Ivanchenko said: “Vnesheconombank is implementing a new approach to searching for and selecting investment projects for the Bank’s loan portfolio via a nation-wide network of its representatives that is now being created. We have appointed 25 regional managers in 16 Russia’s constituent regions. In November, we are planning to complete our work in the rest of the regions and to start implementing our initiative all across the country. Regional managers will select projects requiring more than RUB1bn funding with an implementation period of five years or longer that meet new Vnesheconombank’s priorities as well as projects for the Project Finance Factory.

Svetlana Chupsheva, General Director of the Agency for Strategic Initiatives (ASI), told about ASI’s regional initiatives. “Our objective is to find leaders, ‘stars’ in the regions who will compete such payers as Uber or Amazon. VEB’s regional managers will help find and develop such leaders,” Mrs. Chupsheva noted in her speech.

Among the keynote speakers was also Alexey Repik, President of Business Russia, who spoke about business in regions with a focus on challenges in finding and implementing investment projects. In his speech, he stressed how important the work of VEB’s regional managers is. “VEB’s regional managers will help reduce the existing gap and overcome the lack of understanding between regional businesses and the central federal authorities.”

Anton Alikhanov, Governor of the Kaliningrad Region, talked about the regional investment policy and expectations they have about Vnesheconombank’s regional managers. “We are really thankful to VEB for its sending representatives to regions. This will enable more efficient investment and will help reduce gaps between regions,” Mr. Alikhanov said.

Alla Zavodina, a winner in the regional manager selection, Investment Director of the Novgorod Region Development Agency, shared her plans: “The Novgorod Region is quite attractive for investors. That is why the presence of VEB’s qualified certified managers who speak the same language with investors and are able to prepare all the documents required to apply for funding will be an important competitive advantage for the region. I believe that keeping people informed about VEB’s programmes is a really important mission for me. Because the lack of information impedes development and results in the lack of confidence among investors.

During the conference, Vnesheconombank signed contracts with 25 regional managers, who were also officially awarded honour certificates. Thus, the regional managers have become official representatives of Vnesheconombank in 16 Russian constituent regions.


The Ministry of Economic Development presented the Q2 2017 Russian regions ranking for management of the one-stop-shop public services

mfcThe ranking results were announced by Russian Economic Minister Maxim Oreshkin at the Russian Forum for Government and Municipal Service Multifunctional Centers (MFC) held in Svetlogorsk (Kaliningrad Region).

The regions were evaluated on the basis of multiple indicators, including the percentage of their inhabitants who have access to one-stop-shop government and municipal services, the number of services in the mandatory list that are rendered through MFCs, compliance with the rules of MFC management and the single corporate identity, etc. The information and analytical system for monitoring the quality of public services (IAS MQPS) used by regions to evaluate the quality of MFC service delivery was also taken into account during ranking.

In the final ranking, all regions of the Russian Federation were divided into four levels, from a higher downwards to a lower position. 53 regions demonstrated a higher performance management of the MFC network having scored more than 80 points out of the possible 100, during the ranking.

The Voronezh Region is at the top among the leading regions with the highest scores, the head of the Russian Ministry of Economic Development said.

“This demonstrates the region’s systemic approach. Our colleagues there keep up with continuous advance and improvement and this deserves the highest praise,” said Maxim Oreshkin.

The high-scored regions also include the Republic of Dagestan, the Primorsky Territory, the Lipetsk Region, and the Republic of Sakha (Yakutia).

Four regions which have scored less than 55 points, such as the Republic of North Ossetia-Alania, the Karachay-Cherkess Republic, the Pskov Region, and the Republic of Crimea, are at the bottom.

“Their regional authorities need to take comprehensive measures to remedy the situation,” said Oreshkin.

Measures taken by the higher executive branch agencies in the Russian regions to manage one-stop-shop government and municipal services rendered via MFCs are quarterly evaluated by the Ministry following the Decision of the Governmental Commission for Administrative Reform dd. September 9, 2014. The evaluation shows that the executive branch agencies responsible for the implementation of the MFC network project across the Russian regions demonstrate high performance, meet the targets set out by Presidential Executive Order No. 601 dd. May 7, 2012, and comply with the applicable laws governing MFC activities.

However, when giving his talk at the Russian MFC Forum, Maxim Oreshkin noted that the Ministry of Economic Development planed to improve the ranking methodology in the future, since the ranking did not always reflect the applicants’ credits and focus on their needs.

“The Moscow agglomeration is a good example. Although it is ranked high in the region ranking, technically, it is not among the absolute top leaders. In many ways, it is the most advanced region in terms of MFC service management. My Document centers in Moscow are popular with the citizens, with queue times not exceeding 15 minutes,” stated the Minister.

Another path for improving the ranking is to increase the reliability of the data used during the ranking.

“We plan to start analyzing the data that will be collected in an automated mode directly from MFC information systems from as early as December. It will include verified information about operating MFCs and their boxes, the quantity and composition of services provided as well as queue times,” explained Oreshkin.


Russia moves five places in WEF’s Global Competitiveness Report

image_31Russia was ranked 38th among the 138 countries surveyed in the World Economic Forum’s Global Competitiveness Report published on September 26, moving up five places and “rebounding strongly from the 2015–16 recession”. This made a faster advance than moving up by only 2 places in 2016.
In a separate ranking, for the World Bank’s Doing Business 2016 report, President Vladimir Putin has set a target for Russia to be in the top 20 best countries to do business in by 2018. When Putin set this goal Russia was ranked 121 but in last year’s ranking in 2016 it narrowly missed taking the 51st slot among 189 countries after climbing 11 places in the previous year.
The latest Global Competitiveness Report notes that despite the progress, Russia’s economy remains highly dependent on mineral exports and its prospects remain uncertain.
The weak links in Russian economy include the financial market (ranked 107th), in particular the banking sector, the report said, joining Fitch Ratings and Standard & Poor’s in their concerns over banking stability and the cost of the ongoing banking sector clean-up.
Other weak categories include aspects of institutional quality such as property rights (106th), judicial independence (90th), and corruption, which remains one of the most problematic factors for doing business.
“Russia has passed new laws to increase the minimum wage (2015) and protect temporary employment (2016), which have lowered labor market flexibility (75th, down 18 places),” the report also notes, while admitting that this “may have a beneficial overall effect by restoring domestic purchasing power.
Compared to last year’s survey, the macroeconomic environment improved the most (50th position), with Russia traditionally scoring strongly in market size (6th place), higher education and training (32nd), and infrastructure (35th).
Another international rating, the 2017 Economic Freedom Index compiled by the Heritage Foundation in February, placed Russia at the 114th position in the ‘Mostly Unfree’ category (countries from 93rd to 157th rank) with a score of 57.1 of 100.
Although compared with last year’s survey Russia’s score gained 6.5pp, the report by the conservative US think tank commented that the country’s economy is “severely hampered by blatant disdain for the rule of law and for the concept of limited government”.


AstraZeneca invests in Russia

astrazeneca-plantAstraZeneca, an international biopharmaceutical company, announced that it obtained the approval of inter-agency commission for the conclusion of a special-purpose investment contract (SPIC).
Under SPIC, AstraZeneca will invest an additional 1 billion rubles in upgrading and organizing the Russian production facilities to manufacture innovative drugs with no analogs in Russia for the treatment of socially important diseases. The portfolio includes 4 cancer drugs, 3 medicines for the treatment of cardiovascular diseases, a medication for the treatment of bronchial asthma, an innovative hypoglycemic drug, and a medicine for the treatment of gastrointestinal tract diseases. SPIC will come into force after its signing and will be effective for 10 years. The company has become the first in the pharmaceutical market to obtain the approval from inter-agency commission.
Pascal Soriot, Chief Executive Officer of AstraZeneca, said, “Russia is an important market for AstraZeneca. We want to expand the access of patients to our innovative drugs by localizing their manufacturing. The special-purpose investment contract is a very important step along this path. The approval of SPIC is the result of productive dialog between the relevant agencies and AstraZeneca, which serves as a guarantee for expanding the investments in Russia to the benefit of Russian patients and the public in general.”



Sberbank named number one real estate bank in Central and Eastern Europe

mobile_high-1hsbSberbank has taken first place in four categories of the Euromoney Real Estate Survey 2017: Best Bank in Russia, Best Bank in Central and Eastern Europe, Best Loan Finance Bank in Russia, and Best Loan Finance Bank in Central and Eastern Europe.

“The results of the survey show that the real estate sector really appreciates our efforts to shape a transparent, safe, hi-tech and accessible real estate market in Russia. Over the past 18 months Sberbank has carried out large-scale work to optimise the process of issuing mortgages, which included automating processes and cutting costs to the largest possible extent. This has let us bring new services to the market and enhance our product offering. As a result, Sberbank has delivered excellent results in 2017 – over the first eight months of the year we provided 570.9 bln roubles worth of mortgages, a 38% increase year-on-year. Our DomClick service is used by more than 10% of our borrowers, and more than 100,000 people have used the electronic title registration service,” said Nikolay Vasyov, Head of Sberbank’s DomClick Division.

In 2016, Sberbank launched an online service called DomClick, which lets clients apply for mortgages, receive mortgage approvals, select real estate properties, and get them approved by the bank. A DomClick mobile application is also available. Electronic Registration, a joint service of Sberbank and Rosreestra (the Federal Service for State Registration, Cadastre and Cartography), lets buyers of apartments in new buildings register contracts with developers online.

2.6 million Russian households are mortgage clients of Sberbank.

“Euromoney has conducted its Real Estate Survey every year since 2005. Companies that work in the real estate sector participate in the survey.

Euromoney is an international magazine focusing on the banking sector, finance and capital markets. The magazine’s audience includes senior executives of large companies, investors, and financial sector representatives. Euromoney regularly conducts surveys among markets experts and compiles ratings regarded as some of the most prestigious in the sector.


Nikolay Kosov re-elected as Chairman of IIB Board

nkosovRussian diplomat and international banker, Nikolaу Kosov, will lead the International Investment Bank (IIB) for another five years as the Chairman of the Board. The decision to extend the Chairman’s contract was approved unanimously by the Bank’s member states.
Nikolaу Kosov started his tenure as the eighth Chairman of the IIB Board in 2012. Since his appointment, he has been leading a comprehensive reform to transform the IIB into a modern, dynamic world-class multilateral development institution.
The IIB’s top executive has contributed directly to the increase of the Bank’s recognition in international financial markets, the modernization of the corporate governance and the diversification of the resource base. During the five years, the total volume of the IIB group’s assets has increased almost threefold, reaching EUR 1 billion, the loan portfolio increased tenfold and exceeded EUR 500 million.
Over this time, the list of the IIB’s achievements include: receiving high investment-grade ratings from international agencies, entering the debt capital markets, strengthening its presence at the territory of all member states and starting lending practices in the national currencies of the member states. In 2015, Hungary re-joined the Bank. During the same year, the institution for the first time in its history opened a representative office – the European Regional Office in Bratislava. In 2017, the Republic of Belarus became the first sovereign state, which was granted Observer status.
The Chairman of the IIB Board, Nikolay Kosov: “It has been a great honor, a privilege and a challenge for me to serve as a Chairman of the Board, taking into account the “relaunch” of our activities. I am very pleased that today thanks to the teamwork and an interaction between all shareholders, and the efforts of our employees we have achieved financial stability and are ready to enter a new strategic cycle.”

Major events of the Roscongress Foundation’s in Russia

The Eastern Economic Forum will take place on 6–7 September, 2017 on the campus of the Far Eastern Federal University (FEFU) on Russky Island (Vladivostok).

The Eastern Economic Forum is a unique platform for cooperation between representatives from the worlds of business and politics, as well as members of the expert and media communities from Russia and the Asia-Pacific region. Key areas of focus for the Forum’s 2017 programme will include strengthening business links in the Asia-Pacific region, an in-depth expert appraisal of the Russian Far East’s economic potential, and increasing the region’s competitiveness and financial appeal. The new conditions for investment in the region, where the entire government administrative structure is geared towards meeting the needs of business, will also be presented.

The VI Eurasian Forumin Verona will take place on October 19-20, 2017.

The Forum has brought together more than 600 delegates from Austria, Azerbaijan, Armenia, Belgium, Belarus, United Kingdom, Germany, Italy, Kazakhstan, China, Malta, Mongolia, Russia, Slovakia, France and Switzerland. Among the participants there were representatives of the business community, political and public circles, diplomats, experts and journalists.

The delegates have discussed new projects, models of interstate interaction and economic cooperation in the modern context; they deliberated over the development aspects of the innovative infrastructure of the Greater Eurasia, as well as cooperation in energy, industry, technology, transport, agriculture and agroindustry. The participants have also touched upon the development of the geopolitical environment in Eurasia and the prospects of interregional cooperation between different countries.

The ‘Russian Energy Week’ Energy Efficiency and Energy Development International Forum will take place in Moscow from October 4-7, 2017.

The goal of the event is to demonstrate the prospects of the Russian fuel and energy industry and realize the potential of international cooperation. Six main pillars have been identified for the Forum’s business programme: the development of the gas, oil, and coal industries, petrochemicals, and electricity as well as energy conservation and improving energy efficiency. The Forum will be attended by the heads of major global and Russian energy companies.

The XIX World Festival of Youth and Studentswill take place on October 14–22, 2017, the main events taking place at the Sochi Olympic Park.

World Festival of Youth and Students will be the largest event in the field of international youth cooperation and will bring together more than 20,000 of young people from 150 countries around the world. XIX Festival should be a new milestone in international cooperation, to unite the future generations around the ideas of peace and friendship, keeping the history of the festival movement!

This is a platform for dialogue, global form of communication: through discussions, cultural programs, sports, through free communication to find ways to confront the challenges that younger generation is facing today.

World Youth Festival will unite the community of young leaders in various fields – representatives of NGOs, youth, who achieved success in science, art, sports, pedagogy, IT, politics, and best representatives of the student community, compatriots and foreigners who are interested in Russian culture.

The Russian investment forumwill take place in Sochi on February 15-16, 2018

The Russian investment forum is a traditional platform for presenting Russia’s investment and economic potential. The Forum is held with the participation of the Prime Minister of the Russian Federation Dmitry Medvedev.

St. Petersburg International Economic Forum will take place in St.Petersburg on May 24-26, 2018

St. Petersburg International Economic Forum is an efficient platform for discussions and deliberations in search of solutions to global, regional, and national challenges and pressing issues in a large number of areas. SPIEF’2017 brought together a record number of participants – over 14,000 business representatives, heads of international organizations, officials, experts, scientists, and media from more than 143 countries.

Adviser to the President of the Russian Federation, Deputy Chairman of the Organizing Committee – Executive Secretary Anton Kobyakov said: “In 2018, the St. Petersburg International Economic Forum will once again demonstrate Russia’s readiness to hold a mutually beneficial dialogue with the international community on the key issues of the global agenda concerning the economy and finances”.

Udmurtia Horizons of Cooperation

1200px-Coat_of_arms_of_Udmurtia_svgThe Udmurt Republic is one of the rapidly developing and investment-attractive regions of the Russian Federation with great potential for innovation and big competitive advantage.
The republic’s enterprises, along with military equipment, produce equipment for nuclear power plants, telecommunications systems for space, sporting and hunting weapons, communications equipment, radio electronics, medical equipment, oil and gas equipment, food products and so on. All products manufactured in Udmurtia are known for being high quality, reliable, innovative, environmentally-friendly and much in demand in home and foreign markets.
The Udmurt Republic is always open to new ideas and technologies and committed to boosting foreign economic activity. We support the existing exporters and help new companies to promote their products in the world markets.

Download full presentation of the Udmurt Republic.

Contact information

Republic of Udmurtia, Izhevsk, Pushkinskaya Street, 214
Phone:+7 (3412) 497-010
Web site:

Republic of Udmurtia, Izhevsk, Pushkinskaya Street, 214
Phone: + 7 (3412) 497-015, 497-441
Web site:

Republic of Udmurtia, Lenin Street, 101
Web site:

Tel. / Fax: + 7 (3412) 733-532, 733-581, 733-585,
733-587, 733-591, 733-624, 733-664
Web Website:
Executive Director – Yevgeniya Vitaliyevna Trofimova