Річний звіт annual report 2011 - aval.ua · pdf filenon-interest income 9,440...

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Річнийзвіт AnnualReport

2011

Вітаємо зі святом футболу в Україні! Football fest welcome to Ukraine!

Core Performance Results of the Bankas of year-end 2011*

in UAH thousand

2011 Change 2010

Balance Sheet

Assets 54,255,897 (4.46)% 56,791,612

Amounts due from credit institutions 453,510 17.82% 384,903

Loans to customers 33,702,676 (0.50)% 33,870,374

Amounts due to credit institutions 16,020,052 (17.46)% 19,409,987

Amounts due to customers 27,243,773 (0.09)% 27,268,833

Subordinated debt 2,380,476 0.49% 2,368,864

Share capital 3,083,241 (0.01)% 3,083,650

Total equity 7,773,897 8.60% 7,158,029

Income Statement

Net interest income after allowance for loan impairment 2,678,041 85.87% 1,440,785

Fees and commissions, net 1,230,857 8.29% 1,136,659

Non-interest income 9,440 (98.32)% 562,627

Non-interest expense (3,090,662) 4.80% (2,949,039)

Profit before income tax expenses 827,676 333.27% 191,032

Profit for the year 595,878 607.1% 84,270

General information about the Bank

Total capital ratio 23.11% 2.32 PP 20.79%

Capital adequacy ratio 16.16% (0.76) PP 16.92%

Number of business outlets (group level) 909 (2.40)% 931

Number of staff (group level) 15,267 (1.10)% 15,432

*According to the International Financial Reporting Standards (IFRS)

Public Joint Stock Company Raiffeisen Bank Aval80

ContentsAddress by the Chairman of the Managing Board 84

Report of the Supervisory Board 86

Bank Profile

Success story 90

Ratings 92

Corporate governance report 92

Organizational structure 100

Awards and acknowledgements 100

Corporate responsibility 102

Membership in professional organizations 105

Market environment

Macroeconomic indicators 108

Ukraine’s banking sector developments in 2011 113

Bank performance

Performance highlights 120

Risk management 121

Network 124

Personnel. Training and development 125

Operations and IT 126

Corporate business 127

Micro business 130

Retail business 132

Treasury services 137

Consolidated financial statements 140

Subsidiaries

Raiffeisen Leasing Aval 146

Raiffeisen Aval Asset Management Company 147

Raiffeisen Bank International 149

Addresses of Raiffeisen Bank International 151

Addresses of Raiffeisen Bank Aval 153

Public Joint Stock Company Raiffeisen Bank Aval 81

NSC Olimpiyskiy, Kyiv


Address by the Chairman of the Managing Board 84

Report of the Supervisory Board 86


Address by the Chairman of the Managing Board

Ladies and Gentlemen,

2011 was one of the most successful years for Raiffeisen Bank Aval. Despite the volatility on the global financial markets, our bank com-pletely recovered from the consequences of the crisis of 2008/2009, confidently returned to profit making, and kept the trust of its clients. In the year under review, we continued optimizing our processes and procedures, which entailed a significant efficiency improvement in our busi-ness and the achievement of an excellent finan-cial result: UAH 596 million in profit after tax (according to International Financial Reporting Standards).

The last year was all but steady in every aspect; more often than not, the developments came in leaps and bounds. In this extremely volatile environment, our employees managed to meet our clients' expectations of what a reliable and

transparent European bank should be. According to the survey performed by GfK at the end of 2011, clients of Raiffeisen Bank Aval feel most satisfied among clients of all Ukrainian banks. This is the key to success today and in the future.

Our Corporate Client Services business line made a traditionally significant contribution in our positive overall results. This year, despite the challenging economic environment, the bank's experts continued cooperating with our best corporate clients. This is evidenced by a 30 per cent (or UAH 3.2 billion.) year-to-year loan portfolio growth in this client segment. Agribusinesses (both agricultural product pro-cessors and commodity producers) continue to be our priority in this area of financial services.

In the year under review, the bank's small and micro-business focused on implementing a variety of in-novative products that made those financial services even more convenient for entrepreneurs. Special attention was paid to the development of packaged services that makes it possible to find an optimal balance between the number of banking services required and their cost. New products in this business line include the Companion credit card, as well as Business Person and Alternative Solutions service packages.

In the first half of the year, the Private Clients business managed to considerably expand the loan port-folio via the successful promotion campaign of our Cash Loan product. This led to a 16 per cent (UAH 662 million) growth in our private loan portfolio. At the end of the year, we focused more on attracting deposits. Also as of the end of 2011, the bank started to offer its private clients the innovative Internet Raiffeisen Online system that makes banking services much easier to use.

Just as in the previous years, our bank is the industry leader in monetary, financial, and securities markets.


Further improvement in operation efficiency was made possible by notable accomplishments of our information technology and operational support units. Their services provided to external and internal customers are standardized in compliance with the requirements of our banking Group.

A notable success of our bank’s risk management in relevant procedure updates assured the excellent quality of our new loan portfolio. As before, considerable attention was given to overdue debt collec-tion. So, we reduce our loan loss provisions by 7 per cent for the year. That being said, we not only work directly with our borrowers, we also initiated Ukraine-wide discussions on legislative optimization in that area. Specialists at Raiffeisen Bank Aval are active in the relevant committees of banking associations and communicate to that effect on an ongoing basis with officials from the National Bank of Ukraine and other government authorities.

The current situation in global financial markets is far from stable and affects the Ukrai-nian banking mar-ket that is open and integrated into the international financial community. This means that the intensive process of institutional change in compliance with the requirements of the present times will continue in Raiffeisen Bank Aval. What will remain unchanged, however, is our sincere commitment to cooperation with clients, regulatory authorities and the society in general. This is the fundamental value of Raiffeisen Bank Aval that defines the logic behind our operations at all times.

On behalf of the Managing Board

Volodymyr Lavrenchuk,Chairman


Reportof the Supervisory Board

Ladies and Gentlemen,

2011 was once again a fairly eventful year. The developments in Europe, and particularly in the pe-ripheral states of the eurozone, left their mark on the group headed by Raiffeisen Bank International (RBI), the parent company of Raiffeisen Bank Aval. While our exposure to these states was traditionally low and we were not directly affected, we too were un-able to escape the effects of the market environment following the sovereign debt crisis.

RBI and banks in general are facing a lot of new rules. From our point of view, however, they are introduced at an unfortunate time and in too much haste. The regulations published by the European Banking Authority (EBA) at the end of October which call for a core tier 1 capital ratio of 9 per cent by the end of June 2012 put pressure on many banks in Europe. However, we – to be more exact, the RZB Group – are well-equipped to handle this. We have put together a comprehensive bundle of measures,

consisting of numerous individual measures. We are also in the fortunate position of making profits which are strengthening our equity. As a result, we can meet the new requirements from our own resources.

By meeting the EBA ratio, RBI is also reaching the Basel III ratio of 7 per cent, which the Austrian regula-tors have set as mandatory earlier than previously planned, namely from the start of 2013. Moreover, the Austrian regulators implemented a ratio system for banks operating in Central and Eastern Europe to bring funding from other sources than the shareholder and loans into balance. We do not regard the guideline that only EUR 110 should be lent for every EUR 100 of deposits (including certain other forms of funding) as a major restriction. As growth in lending is tied to economic growth, it is likely to be mode-rate in the next few years. Looking at growth rates, we have to distinguish between markets. While in the eurozone we are facing a real systemic and political crisis, in Central and Eastern Europe the economic uptrend is largely continuing. This region is and will continue to be the growth driver for Europe. Even if economic growth in the CEE region slows from 3.7 per cent in 2011 to 2.6 per cent in 2012, this is still higher than in the eurozone. This is not a bad outlook for us.

In this difficult environment, the RBI Group generated a profit before tax of EUR 1.4 billion, which is a solid result we can rightly be proud of. One thing that made this possible is that the markets in Central and Eastern Europe continued to show comparatively high economic growth, which also resulted in a significant improvement in our risk situation. Our result confirms our sustainable business model, which will continue to keep us very competitive!


Raiffeisen Bank Aval contributed with its performance to RBI’s good results in 2011. Amid challenging macroeconomic conditions and weaker demand for financial products and services in the Ukrainian market, the bank’s management focused its attention on improving business processes and risk manage-ment methods, as well as the activities aimed at increasing internal efficiency and creating higher added value. And I am happy to state that Raiffeisen Bank Aval, as evidenced by its financial statements for 2011, confirmed again the correctness of its strategy and the prudence of its management in a chal-lenging year.

Raiffeisen Bank Aval recorded a year-over-year growth in all key indicators. It maintained its number four position in terms of total assets among Ukraine’s commercial banks.

During fiscal year 2011, the bank consistently focused on developing state-of-the-art and innovative services and products. The bank’s management also made important adjustments to its cost structure, continuing programs of optimization of the staff and the branch network.

In 2011, the bank's Supervisory Board performed all its duties as defined by the Ukrainian legislation and the bank’s Articles of Association. It supervised the legality and efficiency of the bank's management at its regular sessions, informal discussions and via the Managing Board's reports. It also rendered its full support to the Managing Board in achieving the results expected by the shareholders.

The composition of the bank’s Managing Board underwent changes in the year under review. By the decision of the Supervisory Board, taken at the end of 2011, Natalia Gurina was appointed as Deputy Chairman of the Board, responsible for risk management, with effect from 3 January, 2012. Deputy Chairman of the Board Cornelius Granig, Deputy Chairman of the Board Grigory Sheludko and Deputy Chairman of the Board Alexander Witte left the bank on 15 May, 1 August and 31 December, 2011, respectively.

The 2011 consolidated financial statements were audited by Ernst & Young Audit Services LLC for con-sistency with the International Financial Reporting Standards (IFRS). The audit did not give rise to any objections, and the legal requirements were fully complied with. The Supervisory Board agrees with the Managing Board’s reports on the audited results for the 2011 financial year and with the Managing Board’s proposal regarding the appropriation of the profit.

In 2012, the bank celebrates its 20th anniversary. During these years, the bank and its clients have ex-perienced a huge variety of challenges, but every time they found an effective solution.

On behalf of the Supervisory Board, I thank all the bank’s employees for their professionalism and dedication, and also express my gratitude to all our clients and business associates for their trust and continued partnership. I am confident that many years of productive cooperation lie ahead and I look forward to the addressing the issues of 2012.

For the Supervisory Board

HerbertStepic,Chairman


NSC Olimpiyskiy, Kyiv


Bank ProfileSuccess story 90Ratings 92Corporate governance report 92Organizational structure 100Awards and acknowledgements 100Corporate responsibility 102Membership in professional organizations 105


Bank profileSuccess story1992NBU registered Aval JSCB.

199312 regional units of the bank started operations.

1994NBU registered the bank as Aval JSPPB.

1995The bank was accredited as the project implementer with the European Bank for Reconstruction and Deve-lopment.

1996The in-house processing facility (Ukrainian Processing Center) started operation. The bank joined internation-al payment systems Visa and Europay as a member.

1997Western Union recognized Aval as the Best Partner in Eastern Europe.

1999The bank has become the member of the Retail Depo-sits Guarantee Fund.

2000Western Union recognized bank Aval as the most in-novative agent of the system.

2001The bank was Ukraine's first to implement payment of pensions based on Onyx plastic cards and imple-mented the in-house Aval-Express system for express money transfer in Ukraine.

2002The authorized capital set the record for the Ukrainian banking system at UAH 500 million. The bank was ranked by Standard & Poor's among the TOP-100 Banks in Central and Eastern Europe.

2003Euromoney magazine recognized Aval as Ukraine's best bank. The bank placed bonds worth UAH 80 million.

2004The authorized capital of the bank set another record at UAH 1 billion. EBRD recognized Aval as one of the largest and most dynamic banks in Central and East-ern Europe.

2005EBRD recognized Aval as one of the most active banks in Southern and Eastern Europe and the former Soviet Union countries. Raiffeisen International group pur-chased 93.5% stake in the bank.

2006JSPPB Aval changed its name to Raiffeisen Bank Aval PJSC. Euromoney magazine recognized the bank as Ukraine's Best Bank, EBRD awarded the bank as Ukraine's Most Active Bank in Trade Finance (2006) under the Trade Finance Program (TFP).

2007The bank's assets exceeded UAH 40 billion. The shareholders' equity of the bank grew by UAH 1.5 billion with placement of the 23rd issue of shares. The Banker magazine recognized Raiffeisen Bank Aval as Ukrainian Bank of the Year. The bank's brand was re-cognized as the most valuable of all Ukrainian banks by Ukraine-wide Rating Program Brand Guard.

2008The shareholders' equity grew by UAH 1.4 billion with placement of the 24th issue of shares.

2009The bank changed its legal name to Raiffeisen Bank Aval Public Joint Stock Company (abbreviated as "Raiffeisen Bank Aval JSC"). The bank was again awarded as the Most Valuable Ukrainian Banking Brand by BrandFinance Global Banking 500 rating published by the Banker magazine and Ukraine's Best Bank according to Euromoney magazine.

2010With the 25th issue of shares, the bank's capital grew by UAH 932.54 million including UAH 582.84 mil-lion growth in the authorized capital to over UAH 3 billion. Euromoney magazine yet again recognized Raiffeisen Bank Aval as Ukraine's Best Bank.

2011Retail deposits were recognized as the best in catego-ry by Choice of the Year 2011 International Festival Contest for the fifth time in a row. Another Choice of the Year award was in the Bank of the Year with High-est Quality of Service category. Euromoney Magazine again awarded Ukraine's Best Bank rank to Raiffeisen Bank Aval.


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Corporate governance reportthe membership, responsibility, and functionsof the Supervisory Board, the Managing Board, and the executive CommitteesRaiffeisen Bank Aval is a public joint stock company with the following management bodies:— the General Meeting of Shareholders;— the Supervisory Board; and— the Managing Board.

the bank's operations are controlled by the Auditing Committee and the Internal Audit Service.

The bank's operations are controlled by the Auditing Committee and the Internal Audit Service.

The General Meeting of Shareholders, the highest management body of the bank, approved by their resolution (Minutes No. ZB-47 dd. 28 April 2010) the Principles of Corporate Governance of Raiffeisen Bank Aval Public Joint Stock Company. The Principles are oriented towards formation of a transparent and efficient corporate governance model that provides balance of the interests for the bank's share-holders, officials, employees, business partners and the society at large.

the Core Principles of our Corporate Governance are as follows:• TherightsandlegitimateinterestsoftheShareholdersshallbeprotected;• TheManagingBoardandtheSupervisoryBoardshallperformtheirfunctionsinawell-balanced,diligent, and efficient manner;• Ourofficialsshallactinloyaltyandresponsibility,anyconflictofinterestsshallbeprevented;

RatingsCurrent ratings, assigned by Moody’s agency to the Raiffeisen Bank Aval

Long-term Deposits — Fgn Curr B3

Outlook negative

Short-term Deposits — Fgn Curr NP

Long-term Deposits — Dom Curr Ba1

Bank Financial Strength D-

Outlook stable

Senior Unsecured — Dom Curr Ba1

National Scale Rating Aa1.ua


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• OurInformationPolicyshallbetransparent;• TheRiskManagementandcontroloffinancialandbusinessoperationsshallbeprovided;and• Thesocialroleofthebankanditsresponsibilityforemployeesshallberealized.

The powers of the General Meeting of Shareholders as the highest management body include ad-dressing of any and all issues of the bank's operations.

The Supervisory Board shall protect the rights and represent the interests of the Shareholders, shall con-trol and govern operations of the Managing Board within the scope of powers specified by the Articles of Association and the Regulations of the Supervisory Board that shall be approved by the General Meeting.

By the decision of the General Meeting of Shareholders (Minutes No. ZB-48 dd. 26 April 2011) the new members of the Supervisory Board were approved:— Chairman of the Supervisory Board: Herbert Stepic, Chairman of the Board, Raiffeisen Bank Inter-national AG.— Deputy Chairman of the Supervisory Board: Peter Lennkh, Member of the Board, Raiffeisen Bank International AG;— Members of the Supervisory Board, Representatives of the Shareholder (Raiffeisen Bank Interna-tional AG): Karl Sevelda; Johann Strobl; Nicolaus Hagleitner; Aris Bogdaneris; Martin Gruell; Kurt Geiger; and Gennadiy Yerokhin.

The Supervisory Board shall carry out the following functions: 1. To approve the budget of the bank; 2. To elect and revoke members of the Managing Board; to approve the terms and conditions of civil law and employment agreements that shall be made with the Members of the Managing Board, to set the amount of their remuneration and incentive payments; 3. To control the operations of the Managing Board; to decide on dismissal of Chairman of the Board from exercise of his/her powers and election of the Acting Chairman of the Board; 4. To define the procedure of audit and control of financial and business operations; 5. To decide on and set the form and manner of loss recovery; 6. To decide on foundation, reorganization, and liquidation of legal entities with the participation of the bank (subsidiary companies), branch offices (directorates), representative offices of the bank, approval of their Articles of Association (Regulations); to decide on participation of the bank in indus-trial and financial groups and formation of banking groups; 7. To approve the Regulations of the Managing Board, the Regulations of the Credit Committee and the Regulations of the Internal Audit Service; 8. To determine the external auditor and the terms and conditions of the agreement that shall be concluded with him/her including approval of the amount of payment for his/her services; 9. To decide on appointment and dismissal of the Chief Auditor of the bank, to approve schedules of audit for the Internal Audit Service of the bank, reports, conclusions, and findings of audits per-formed by the Internal Audit Service, including, without limitation, prevention of legalization (launder-ing) of proceeds from crime; 10. To decide on choice (substitution) of the bank's registered securities holders registrar (or depos-


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itary) and approval of the terms and conditions of the agreement that shall be made with the registrar, to set the amount of payment for its services; 11. To determine a probability that the bank is found insolvent due to assumption or performance of an obligation, including, without limitation, payment of dividend or redemption of shares; 12. To decide on making of a considerable act and deed, if the market value of the property or services, which form the subject matter of such act and deed, ranges from 10 to 25 percent of the as-sets' value according to the most recent annual financial statements of the bank and acts and deeds, in respect of which an interest exists, in the cases specified by the Ukrainian legislation; 13. To decide on holding of ordinary and extraordinary Shareholders’ General Meetings, to draft the agenda, to decide on the date of their holding and inclusion of proposals into the agenda (other than convocation of an extraordinary General Meeting of Shareholders), to set the date of making the list of shareholders to be notified of the General Meeting and entitled to attend the same, to appoint the Chairman to the General Meeting and draft the proposals in relation to the matters to be submitted to the General Meeting; 14. To elect the Registration Committee except as specified by the legislation; 15. To decide on sale of shares previously redeemed by the bank; 16. To decide on placement of securities by the bank (other than shares) and redemption of the securities placed by the bank (other than shares) if this is specified in the securities issue prospectus; 17. To set the date of making the list of shareholders, entitled to receive dividends, the terms and due dates of their payment subject to the deadline set by the Articles of Association of the bank; 18. To decide on engagement of a valuation provider of the bank's property to estimate the market value of the property (including, without limitation, shares in the bank) and approval of the terms and conditions of the agreement that shall be concluded with him/her; to set the amount of payment for his/her services; to approve the market value of the property (including, without limitation, shares in the bank) in the cases stipulated by the legislation in force; 19. To send Shareholders proposals on acquisition by a party (parties acting jointly) of a material shareholding in the bank; 20. To elect members of the Credit Committee of the bank; 21. To approve organization, liquidation, re-organization, and re-subordination of independent structural units of the bank that are subordinated directly to the Managing Board, Members of the Managing Board or the Supervisory Board; to set the general principles and terms of remuneration of labor at the bank, its branch offices (directorates), outlets and representative offices; and 22. To exercise other powers delegated to resolution of the Supervisory Board by the Sharehold-ers’ General Meeting and to make decisions on other matters included in powers of the Supervisory Board by the Articles of Association of the bank, the Regulations of the Supervisory Board and the laws of Ukraine.

The Supervisory Board shall examine the matters submitted to Chairman of the Supervisory Board and its members, the Auditing Committee and the Managing Board.

The Auditing Committee provides control of the financial and business operations of the bank.

The Auditing Committee of the bank shall:— control compliance by the bank with the Ukrainian legislation including the regulatory and legal acts of the National Bank of Ukraine;— examine the reports of internal and external auditors and prepare the relevant propositions for the Shareholders’ General Meeting;— submit to the General Meeting or meetings of the Supervisory Board proposals in relation to the matters included in the powers of the Auditing Committee of the bank, which relate to the financial se-curity and stability of the bank and protection of interests of the clients.


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Chairman of the Auditing Committee of the bank – representative of the material shareholder Raif-feisen Bank International AG – Iryna Nestor, Deputy Chairman of the Board, Chief Financial Officer of Ukrainian Processing Center CJSC.

The Managing Board serves as the executive body of the bank that provides management of the bank's ongoing operations, formation of funds required to do business specified in the Articles of As-sociation. It shall bear responsibility for efficiency of its operations in compliance with the policies and procedures stipulated by the Articles of Association of the bank, the decision of the Shareholders’ Gen-eral Meeting and the Supervisory Board and the Regulations of the Board that shall be approved by the Supervisory Board.

The Managing Board shall include at least three members, who shall be appointed for a term of up to 5 years and may be revoked before the expiry of such term. Within the scope of its powers, the Board shall act on behalf of the bank, shall report to the Shareholders’ General Meeting and the Supervisory Board and organize fulfillment of their decisions.

The Managing Board is headed by Chairman Volodymyr Lavrenchuk.

As at 3 January 2012, the Board members include:— Gerhard Boesch, First Deputy Chairman of the Board;— Viktor Gorbachev, Deputy Chairman of the Board;— Arthur Iliyav, Deputy Chairman of the Board;— Robert Kossmann, Deputy Chairman of the Board;— Andreas Gschwenter, Deputy Chairman of the Board; and— Natalia Gurina, Deputy Chairman of the Board.

Chief Accountant: Lyudmyla Makarenko.

The powers of the Managing Board: 1. To manage the bank's ongoing operations by defining the rules, terms, form and manner of its financial and business operations, making banking and other transactions, accounting and reporting and by making other legal acts aimed at the achievement of the bank's objectives and implementation of the operation areas that are specified in the Articles of Association; 2. To approve the internal documents of the bank (rules, procedures, terms, regulations, stand-ards, model agreements or the like) other than those subject to approval by the General Meeting or the Supervisory Board in compliance with the Articles of Association and the internal documents of the bank; 3. To draft and submit for approval to the Supervisory Board the budget of the bank and to ensure compliance with the budget approved by the Supervisory Board; 4. To take action to organize holding of the General Meetings in compliance with the decisions of the Supervisory Board and in the form and manner specified by the Articles of Association and the Regulations of the General Meeting of Shareholders of the bank and the legislation (except for the cases when shareholders convene a General Meeting by themselves); 5. To approve and form internal organizational structure of the bank, including the structure of independent structural units, to set and define the functional duties of the structural units and bodies of the bank, to set the number of their employees or the like; 6. To manage the operations of branch offices (directorates), representative offices and outlets of the bank, to appoint and dismiss their officials, to set the requirements and targets applicable to the operations of separated structural units; 7. To decide on foundation, reorganization, and liquidation of outlets of the bank, approval of


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their regulations, to decide on participation in not-for-profit associations, institutions and organizations; 8. To implement the personnel policy of the bank, including recruitment, training, and employment of human resources, formation of spare personnel, approval of a personnel list and employee compen-sation packages in compliance with the principles approved by the Supervisory Board; 9. To make a collective agreement with the employees of the bank; 10. To use and dispose of movable and immovable property, funds, securities and other tangible and intangible assets of the bank, including their acquisition, disposal of, pledge or other encumbranc-es within the limits approved by the Supervisory Board; 11. To set and implement the policy of the bank in the area of banking secrecy, financial monitor-ing and other areas that in compliance with law shall be subject to a special normative regulation; 12. To examine the records of audits, conclusions and recommendations of external and internal auditors of the bank, to make decisions based on the findings of such audits; and 13. To decide on other matters of the bank's operations that are beyond the exclusive powers of the other bodies of the bank as may be delegated to the Managing Board by the Shareholders’ Gen-eral Meeting or the Supervisory Board or to decide on the matters that belong to the powers of the Board in compliance with the Regulations of the Board and Ukrainian legislation in force.

The Internal Audit Service serves as an operational monitoring body of the Supervisory Board that au-dits the bank's operations and structural units.

The Internal Audit Service shall carry out the following functions:• tosupervisethebank'songoingoperations;• tocontrolcompliancewiththelaws,regulatoryandlegalactsoftheNationalBankofUkraineanddecisions made by the management bodies of the bank;• toaudittheresultsofcurrentfinancialoperations;• toanalyzeinformationonthebank'soperations,professionalactivityofitsemployees,excessofpowers by officials of the bank;• toprovidetheSupervisoryBoardwiththeconclusionsandproposalsbasedonthefindingsoftheaudits; and• tocarryoutotherfunctionsrelatedtosupervisionandcontrolofthebank'soperations.

The bank’s standing committees are set up to ensure supplementary arrangements for the purposes of risk management.

Every month, the Credit Committee estimates quality of the bank's assets and draft proposals in rela-tion to formation of asset impairment provisions. The Credit Committee shall be entitled to set up Credit Committees of branch offices (directorates), outlets of the bank or Credit Committees in individual ar-eas of lending that shall be subordinated and report to the Credit Committee of the bank, to delegate them some of its powers and approve their Regulations. The Committee shall be organized and shall act in the form and manner specified by the Supervisory Board.

On a monthly basis, the Assets and Liabilities Management Committee shall examine the cost of li-abilities and return on assets and decide on the interest margin policy, examine compliance of the term of assets and liabilities and furnish the relevant units of the bank with the recommendations regarding removal of time difference. The Committee shall be organized and shall act in the form and manner specified by the Managing Board.

The Tariff Committee shall analyze the ratio between the cost of services and the market competitive ability of the current tariffs on a monthly basis and shall bear responsibility for the bank’s operating income policy. The committee shall be organized and shall act in the form and manner specified by the Managing Board.


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Shares held by the Management

The Members of the Managing Board hold one hundred (100) ordinary registered shares in the bank.

Shareholders

Raiffeisen Bank Aval is a public joint stock company; as at 31 December 2011, the shareholders include 360 legal entities and 110,157 individuals. The legal entities being the bank's shareholders hold 99.57 per cent of the authorized capital, individuals hold 0.42 per cent; the balance 0.01 per cent were bought back by the bank.

The registered authorized capital of the bank as at 31 December 2011 amounts toUAH 3,002,774,908. Since its foundation, the bank has completed 25 issues of 29,977,749,080 ordinary registered shares and one issue of 50,000,000 privileged shares with a par value ofUAH 0.10 each, of which the authorized capital of the bank is formed.

In 2011, ordinary shares in the bank were traded actively at FSTS and the Ukrainian Stock Exchange. The ordinary shares in the bank are listed as per Level 1 Quotation at the Ukrainian Stock Exchange, the average weighted market rate of the ordinary shares in the bank for 2011 was UAH 0.29 per share. The bank’s ordinary shares are also listed as per Level 2 Quotation at FSTS; the average weight-ed market rate of ordinary shares in the bank in 2011 was UAH 0.3089 per share.

In compliance with the decision of the annual General Meeting of Shareholders (Minutes No. ZB-48 dd. 26 April 2011) in 2011 the bank bought back 4,087,261 own ordinary and privileged shares (0.01 per cent of the authorized capital) from the minority shareholders (individuals) for further sale to Raiffeisen Bank International AG, the material shareholder.

Material interest in the bank

The parent bank and material shareholder of the bank is a leading Austrian financial institution – Raif-feisen Bank International AG that as at 1 January 2012 holds 96.37 per cent of the authorized capital of the bank. Raiffeisen Bank International AG holds the written permit for material interest issued by the National Bank of Ukraine on 14 October 2005 under No. 377.

Foreign investors (companies and countries) and their shares in the authorized capital

Raiffeisen Bank Aval holds the status of a bank with foreign capital.

Raiffeisen Bank International AG is the material shareholder of the bank with 96.37 per cent share in the authorized capital.

In addition, the bank's shareholders include strong foreign financial institutions: State Street Bank and Trust Company (0.8 per cent), United States of America; East Capital Asset Management Aktiebolag (0.41 per cent), Sweden; UniCredit Bank Austria AG (0.09 per cent), Austria; UniCredit Bank AG Germany (0.03 per cent), Germany, and others.

As at 1 January 2012, the foreign capital share in the bank’s authorized capital totaled 99.17 per cent.


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Managing Board of the Bank (f.l.t.r.):Robert Kossmann, Andreas Gschwenter, Arthur Iliyav, Natalia Gurina, Volodymyr Lavrenchuk, Gerhard Boesch, Victor Gorbachev


organizational structure

Internal Audit Service

Supervisory Board

Treasury and Finanсe

Gerhard Boesch

Corporate BusinessVictor Gorbachev,

Arthur Iliyav

Risk-Management

Natalia Gurina

First DeputyChirman of Board

Gerhard Boesch

CEO

Volodymyr Lavrenchuk

Operations Support and IT

Andreas Gschweter

Operations Division IT Application OperationsDivision Legal Division HR Division Collateral Management

DepartmentRegional

Corporate ClientsDivision

Treasury

CorporateBusiness Development

Department

Investment Team

Depositary Department

IT Governance Department

Cost Management Department

IT SecurityDivision

Financial Monitoringand Compliance Control

DivisionFinancial Institutions

DivisionLarge

Corporate CustomerDivision

Retai, Marketand Operational

Risks ManagementDivision

Executive SecretariatRegional SystemsDivision

Operations ServicesDivision

PR andCorporate Communications

Service

Accounting,Control and Reporting

Division

Public Sectorand Trade Finance

Division

CorporateRisk Management

DivisionIT Banking Systems

Development DivisionOrganization

and Process ManagementDivision

Labour ProtectionService

Financial ControllingDivision

Corporate Productsand Services Division

RegionalRisk Management Group

IT InfrastructureDivision

Property Developmentand Facilities Management

Division

Regional ManagementGroup

Financial Development Division

Multinational CompaniesDivision

Basel II Analytics, Reporting and

Compliance Department

IT Strategyand Architecture

Department

Procurementand Bank Services

Division

Business IntelligenceDivision

Analysisand Research Team

MortgageAsset Management

DepartmentWorkout Division

Credit Risk ControlDivision

Retail Business

Robert Kossmann

Distributionand Delivery Channels

Division

PI Products Division

SE and Micro BusinessDivision

Marketingand Customer RelationshipManagement Department

Retail CollectionDivision

DWH Development Department

Project Portfolio and Finance Management

Division

Economicand Financial Security

Division

Currency Valuables Transportation and

Cash Collection Division

Security Division

Awards and acknowledgementsRaiffeisen Bank Aval has always appreciated recognition of its achievements by major periodicals and rating companies, partners, and clients. In 2011, the leadership of the financial institution was, just as in the previous years, recognized in a number of prominent decorations and awards.

One of them is the fifth in a row yearly award Ukraine's Best Bank by the Euromoney financial magazine (UK). In addition, Raiffeisen Bank International AG was again named Best Bank in Central and Eastern Europe by the Awards for Excellence project and two more RBI subsidiary banks – Raiffeisen Bank Sh.a. (Albania) and Priorbank JSC (Belarus) – were named best banks in their countries.

In compliance with the Correspondent magazine's Friendly Banks Rating, Raiffeisen Bank Aval was recognized as the best private financial institution of the country by general satisfaction with the bank. According to Ukraine-wide rating program Brand Guard 2011, Raiffeisen Bank Aval owns the most valuable brand among all banks in Ukraine.


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The Best Agrarian Bank rating was awarded by the Ukrainian Banking Awards 2011 program initiated and held by the financial and analytical weekly Investgazeta. The experts ranked Raiffeisen Bank Aval second in Bank for Entrepreneurs nomination; Raiffeisen Bank International AG became the winner in Best Global Group nomination.

The retail deposits of Raiffeisen Bank Aval for the fifth year in a row were recognized as the best at Choice of the Year 2011 International Festival Contest. In addition, Raiffeisen Bank Aval was recognized as the winner in Bank of the Year with the Best Service Quality nomination.

The bank's experience in wealthy client services was also appreciated as Raiffeisen Bank Aval received the award Best Private Banking for the second time by Luxury Lifestyle Awards 2011 project.

Based on the results of the 6th Ukraine-wide Competition For the Best Regular Information of Joint Stock Companies and Bond Issuing Companies organized by the State Commission on Securities and Stock Market, Raiffeisen Bank Aval was ranked first in the nomination For Preparation of the Best Regular In-formation among Banking Financial Institutions.

A number of awards was given to the top management of the bank. In particular, Volodymyr Lavrenchuk, Chairman of the Board at Raiffeisen Bank Aval, was recognized as the most authoritative manager among the officials of Ukrainian banks by Ukraine's 10 Best Top Managers rating by the Companion magazine. Lavrenchuk was also ranked among 5 Most Authoritative Top Managers in all sectors of the Ukrainian economy according to the said rating.

In addition,Volodymyr Lavrenchuk was ranked as Best Top Manager of Ukraine's Banking System by Ukraine's TOP 100 Business Leaders Rating magazine and named best top manager in introduction of reputation marketing by the Bankir magazine.

As rated by the Correspondent magazine, Volodymyr Lavrenchuk was named one of 15 top managers, who made the most successful career in Ukraine.

Tetyana Plyusnina, Head of HR Division at Raiffeisen Bank Aval, was recognized as one of eight most efficient HR Directors in Ukrainian companies based on the results of the survey by the Forbes Ukraine magazine.


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Corporate responsibilityAlong with high operation results, awards and high ratings, employees of Raiffeisen Bank Aval also take pride in social responsibility of their employer. This social component stems from the proper quality of products and services, transparent operation, high reliability of the financial institution, good working environment of the personnel, environmental responsibility, extensive charity and sponsorship.

Raiffeisen Bank Aval timely performs all duties assigned to it by the government, such as furnishing trans-parent financial statements, payment of all taxes, official wages of employees, job generation and the like.

In its operations, the bank is guided by the high standards of socially responsible business adhered to by its Austrian parent company – Raiffeisen Bank International AG and all the banks in Raiffeisen network. These standards are oriented towards strengthening of client confidence, satisfaction of client interests and proper image of Raiffeisen Group banks in Central and Eastern Europe. The increasing significance of mutual trust between banks and their clients as the key factor of successful development of a banking institution urges the implementation of a special code of conduct of the bank's employees in relations with clients, including, without limitation, to the extent of compliance with moral and ethical norms, prevention of conflicts of interests and the like. The business relationships, business ethics are specified at the bank's in-house Code of Employee Conduct.

In 2011, Raiffeisen Bank Aval continued extensive charity and sponsorship at the level of the Head Of-fice and regional directorates. Within the year, the bank financed a significant number of charitable and sponsor projects.

The priority areas of the bank's charity continue to include support of children's establishments for or-phans and children from problematic families and children's health care establishments. The bank also actively supports projects oriented towards development of the Ukrainian culture, sciences and arts.

The financial institution traditionally holds special charitable voluntary labor events in children's homes, city parks, and children's playgrounds. The bank also saw the expanding initiative of holding charitable auctions within the framework of in-house corporate events, with donations to be spent for treatment of employees of the bank thus providing them financial benefits or aimed at other charitable purposes. In addition, such forms of philanthropy as purchase of gifts for children's homes for own funds of our employees, raising charitable donations for treatment of seriously ill children in cooperation with The Zaporuka Charitable Fund and treatment of colleagues, volunteering, blood donation and the like are under intensive implementation.

Charitable activities are initiated and supported by both the management of the bank and the trade un-ion of the bank's employees. A number of charitable special events were held in 2011. These include the next charitable meeting in Babanka boarding school of Cherkasy oblast and donation of equipment for training and recreation of children to the educational institution. In addition, employees of the Head Of-fice for their own funds purchased and transferred to the children developing games, sports equipment, desktop games, stuffed toys, sweets, personal hygiene products and the like. Employees of the bank also held an entertainment program for children by inviting circus performers.

The New Year charitable auction was held with support by both the management and the trade union; the lots included the best fancyworks of female employees of the bank. The auction helped to mobilize above UAH 21,000 for the bank employee's family with many children.


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Other important charitable projects supported by the bank in 2011 included assistance to Saint Mary International Charitable Fund in holding the Easter Charitable Event for orphans and disabled children and treatment of seriously ill children; Sviatoslav Vakarchuk's Charitable Fund People of the Future in support of the project oriented towards solving the problems of computerization of children's homes; the International Charitable Fund for the Renaissance of Kyiv Mohyla Academy; Chernigiv Oblast Philhar-monic Center of Festivals and Concert Programs to hold Siversky Musical Evenings International Festival; the International Charitable Fund for support of the Dzerkalo Tyzhnia. Ukraine newspaper for organiza-tion and implementation of a charitable project Hospitable Ukraine; the Charitable Fund Blagovist XXI for purchase of hearing aid with artificial intelligence; the International Charitable Fund Children Salva-tion Service for support of children's rehabilitation center; the Charitable Fund for Support in Develop-ment of Arts; Chernivtsi Museum of Arts municipal institution and the like.

In the reported year, Raiffeisen Bank Aval also implemented a number of sponsor projects oriented to-wards support of the national culture, literature, arts, sciences or the like.

The bank's sponsorship highlights:— the Charitable Fund for Support in Development of Arts – to assist in cultural and arts events of the National Portal of Academic Music and the Ivan Franko National Academic Drama Theater;— MBK Sealand LLC for organization and implementation of charitable concert in memory of Serhiy Kuzminsky, the renown musician, a member of Braty Gadyukiny band;— SKI LLC for organization and implementation of a mountain skiing competition Ukrainian Mountain Ski Week in Austria and the music, arts and rock festival Slavske Rock;— Kraina Mriy NGO for publishing the commemorative album set of the legendary Ukrainian rock band Vopli Vidoplyasova;— KIS LLC for publication in the Ukrainian language of Ukraine: Process of Nation Building, compen-dium of scientific works of renown scientists from Austria, Canada, Ukraine, Germany, USA ;— Capital Vision Advertising Agency LLC for holding of the 2nd Ukraine-wide Tourist Photography Competition;— International Women's Club in Kyiv for holding of the 19th Yearly Charitable Fair;— Sports and Cultural Initiatives LLC for organization and implementation of Christmas concerts;— Chess Federation of Ukraine for development of chess in Ukraine;— Institute of World Economy and International Relations of the National Academy of Sciences of Ukraine for publication of the scientific monograph Identities and Values in the Epoch of Globalization;— V. Hetman Kyiv National Economic University for granting of personal fellowships to the best stu-dents and the like.


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Membershipin professional organizationsRaiffeisen Bank Aval in 2011 actively participated in the work of a number of professional associations, unions and organizations and traditionally continued to cooperate with international associations and financial institutions, in particular, the European Bank for Reconstruction and Development (EBRD) and the International Financial Corporation (IFC).

The bank is also the founder and initiative member of the Forum of Leading International Financial Institu-tions, an organization aimed at providing the development of a stable and transparent financial system in Ukraine based on the best international practices.

Raiffeisen Bank Aval is a member of the following organizations:• ForumofLeadingInternationalFinancialInstitutions;• NationalAssociationofUkrainianBanks;• StockPartnershipAssociation;• UkrainianInterbankForeignExchangePrJSC;• UkrainianStockExchangeCJSC;• NationalDepositaryofUkraine;• Ukraine-wideDepositaryofSecuritiesPrJSC;• UkrainianNationalMortgageAssociation;• UkrainianInterbankAssociationofMembersofPaymentSystemsEMA;• FirstAll-UkrainianCreditHistoryBureau;• UkrainianAssociationofProjectManagementUKRNET;• UkrainianStockTradersAssociation;• SocietyforWorldwideInterbankFinancialTelecommunication(SWIFT);• EuropeanBusinessAssociation;• AmericanChamberofCommerce.

In pursuance of the requirements set by the Ukrainian legislation in force, the bank is a member of the Deposit Guarantee Fund founded in 1998 to protect the interests of depositors.


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Donbass Arena Stadium, Donetsk


Market environmentMacroeconomic indicators 108

Ukraine’s banking sector developments in 2011 113


Market environmentMacroeconomic indicatorsAccording to the preliminary estimate of the State Statistics Committee, Ukraine’s GDP grew 5.2 per cent yoy in 2011, thus accelerating from 4.1 per cent yoy growth in 2010. Ukraine’s growth in 2011 scores higher than neighboring Russia or Poland (both around 4 per cent yoy) and feeble economies like Hungary (1.5 per cent yoy). Thus, the recovery has made progress, however, the output still falls short of GDP level of the pre-crisis period given a 15 per cent slump of output in 2009. GDP in 2011 was only at 93 per cent of the 2008 level (Russia is already back at 99 per cent). The anemic qoq growth in Q4 signals on an economic slowdown amid the decelerating energy output growth (due to the unusually warm weather) and subdued a global demand for the Ukrainian exports (which negatively affected the manufacturing output). Consequently, industrial output growth decelerated from 8.6 per cent yoy in Jan-Sep to 7.3 per cent in Jan-Dec, posting a negative yoy growth rate in December (minus 0.6 per cent) for the first time since October 2009. On the other side, robust growth in agriculture and retail trade sustained the strong production dynamics in Q4, 2011. Agricultural output growth accelerated from 13.7 per cent yoy in Jan-Sep to 17.5 per cent in Jan-Dec owing to the rich harvest, while retail

key macroeconomic and fiscal indicators, 2007-2011

2007 2008 2009 2010 2011

GDP (UAH bn) 720.7 948.1 913.3 1082.6 1316.6

GDP (USD bn) 143.3 180.2 113.9 136.2 165.2

GDP (% yoy) 7.9 2.3 (14.8) 4.1 5.2

Industrial production (% yoy) 7.6 (5.2) (21.9) 11.2 7.6

Private consumption (% yoy) 17.2 12.0 (14.2) 6.7 15.0

Gross fixed investment (% yoy) 23.9 1.6 (46.2) 4.7 10.1

CPI (avg, % yoy) 12.8 25.2 15.9 9.4 8.0

CPI (eop, % yoy) 16.6 22.3 12.3 9.1 4.6

PPI (eop, % yoy) 23.3 23.0 14.3 18.7 14.2

Real disposable income (% yoy) 14.8 7.6 (10.0) 17.1 6.1

Unemployment rate (avg, %) 6.4 6.4 8.8 8.1 7.9

Fiscal balance (% of GDP) (1.1) (1.5) (8.7) (7.5) (4.3)

Public debt (% of GDP) 12.3 19.8 33.0 40.0 38.0

Source: State Statistics Committee, National Bank of Ukraine, Ministry of Finance, Raiffeisen RESEARCH

-15

-10

-5

0

5

10

15

20

25

9.010.5

16.6

22.3

12.3 9.1

4.6

10.0

4.02.6

7.3 7.9

2.3

-14,8

4.1 5.2 3.5

2005

GDP Inflation, eop

2006 2007 2008 2009 2010 2011 2012e 2013f

%

GDP growth and inflation

11.6


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trade turnover hiked by 13.7 per cent yoy in 2011 (after a 7.6 per cent yoy increase in 2010). Across expenditure components, the booming domestic demand was the major driving force of GDP growth last year. According to our estimates, the total domestic demand grew 9.2 per cent yoy in 2011 (after a 7.3 per cent increase in 2010) primarily driven by robust private consumption growth and strong build-up in inventories. The net export contribution to GDP growth was negative last year due to the deteriorating global economic environment.

Plunging food prices drove inflation rate to 9-year low in 2011 – eop CPI grew 4.6 per cent last year (after a 9.1 per cent increase in 2010). The average inflation rate constituted 8 per cent in 2011, falling from 9.4 per cent in 2010. The exceptionally low inflation last year is primarily explained by the plunging prices of just few food items (namely, vegetables and sugar prices nosedived by 44 per cent and 20.5 per cent yoy, respectively in 2011, generating the combined impact of 3.3 PP decline in eop CPI growth rate), while the prices for main components of the consumer basket increased. At the same time, the disinflation effect was much less pronounced in the producer prices – eop PPI grew 14.1 per cent yoy in 2011 (down from 18.7 per cent in 2010). The prices in the mining and energy industries were the fastest growers – 25 per cent and 21 per cent, respectively. The prices for the main export commodities (e.g. steel, chemicals) came under pressure late in the year following the deterioration in global economic conditions.

Ukraine’s external balance visibly deteriorated in 2011 amid surging imports, stalled debt inflows and persistently strong demand for cash foreign exchange. According to the preliminary estimate of the NBU, the current account deficit reached USD 9.3 billion (5.6 per cent of GDP) last year, jumping from USD 3 billion (2.2 per cent of GDP) in 2010. The main reason is a sharp increase in the merchandise trade balance deficit (from USD 8.4 billion in 2010 to USD 13.8 billion in 2011). Goods’ import jumped by 37.5 per cent yoy last year amid robust growth in both energy and non-energy imports. The former is explained by nearly a 20 per cent increase in average gas import price last year. The non-energy imports were boosted by the large-scale investment projects related to UEFA EURO 2012 football championship (i.e. the construction and renovation of stadiums, airports, roads, etc.) as well as by the rising household income. On the other side, the competitiveness slide (stemming from sizeable nominal hryvnia appreciation versus other currencies and wide inflation differential) and deterioration in the global economic environment in the second half of the year hampered the export growth (first of all, in the machine building and steel industries). The merchandise export grew 33.1 per cent yoy in 2011, which is much slower than the import growth.

The surplus of the financial account shrank from USD 8 billion to 6.8 billion last year. As a result, the overall balance turned into the red – the deficit of USD 2.5 billion comparing to the surplus of USD 5 billion in 2010. The blocked access to the global debt markets and hiking demand for the cash foreign exchange were at the heart of capital account deterioration last year. The external financing conditions soured in H2 2011, amidst renewed global financial turbulences, a stalemate in the IMF program and the weak fiscal position. Consequently, the surplus of foreign borrowings’ balance shrank from USD 6.8 billion in 2010 to 2.2 billion in 2011. Apart from stalled debt

9.00

9.50

10.00

10.50

11.00

11.50

12.00

7.85

7.90

7.95

8.00

8.05

8.10

8.15

USD/UAH USD/UAHofficial rate

EUR/UAH (r.h.s.)

UAH exchange rate

Jan-

10

Mar

-10

May

-10

Jul-1

0

Sep-

10

Nov

-10

Jan-

11

Mar

-11

May

-11

Jul-1

1

Sep-

11

Nov

-11

Jan-

12


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inflows, the flight to cash FX accelerated last year – the net balance rose from USD 7.8 billion in 2010 to 11.9 billion in 2011. According to the Research and Analysis Unit of Raiffeisen Bank Aval, it reflects not only the spike in the depreciation expectations in the second half of the year, but also the increase in the scale of shadow market activities. FDI inflow accelerated last year (from USD 5.8 billion to 6.6 billion), albeit it hardly reflects the improvement in the investment climate. 20 per cent of this volume (USD 1.3 billion) is attributed to the single deal (the privatization of the Ukrtelecom company). Moreover, in terms of GDP the net FDI inflow reduced from 4.2 per cent in 2010 to 4 per cent in 2011, falling much below the pre-crisis figures (in 2005-2008, the average annual FDI inflow constituted 6.5 per cent of GDP).

Not surprisingly, with deteriorating external environment and vanishing confidence in the domestic policies, hryvnia devaluation fears re-emerged in late summer, pushing the central bank into the role of a net seller of foreign currency to defend the formal currency peg at USD/UAH 8. The authorities had strong incentives not to reduce support for the currency as such a step could trigger an outburst of devaluation worries and panic selling of UAH. Vast FX interventions, the introduction of administrative restrictions on cash FX operations and a notable tightening of the monetary policy helped to generally calm down the mood by year-end 2011. As a result, the central bank lost USD 6.4 billion (17 per cent) of gross FX reserves in the last four months of 2011. However, not only FX interventions and government transactions diminished reserves, but also the revaluation of non-dollar assets – particularly due to the weakening European single currency – had a large negative effect on the volume of reserves in USD terms. The gross FX reserves stood at 31.8 billion at end-2011, while the net reserves (i.e. excluding IMF funds) were much lower – around USD 18 billion.

The resurgence of devaluation expectations in September last year led to the radical changes in the monetary conditions. In the first 8 months of the year we have witnessed the strong rebound in the lending activity coupled with the deposit build-up and easing access to the foreign funding. Consequently, the liquidity situation was favorable with money market rates being highly negative in the real terms (one-month money was priced below 5 per cent level). The increased pressure on hryvnia forced the authorities to tighten the policy dramatically to sustain exchange rate peg. As a result, money market rates jumped upwards to reach 30-35 per cent on some occasions. The interest rate hike hurt the lending activity, plus most of the banks put the severe limits on the new lending to stabilize the liquidity situation. The tightening of the liquidity conditions in the second half of the year suppressed the growth of the

key balance of payments and monetary indicators, 2007-2011

2007 2008 2009 2010 2011

C/A Balance (% of GDP) (3.7) (7.1) (1.5) (2.2) (5.5)

Merchandise trade balance (USD bn) (10.6) (16.1) (4.3) (8.4) (13.8)

FDI (USD bn) 9.2 9.9 4.7 5.8 7.0

Gross external debt (% of GDP) 55.8 56.4 90.7 86.2 76.5

Base money (% yoy) 46.0 31.6 4.4 15.8 6.3

Broad money (% yoy) 52.2 29.8 (5.5) 22.7 14.2

USD/UAH (eop) 5.05 7.65 8.00 7.97 8.00

USD/UAH (avg) 5.03 5.26 8.02 7.95 7.97

EUR/UAH (avg) 6.89 7.73 11.17 10.57 10.98

Gross FX reserves (USD bn) 32.5 31.5 26.5 34.6 31.8

Source: National Bank of Ukraine, Raiffeisen RESEARCH


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monetary aggregates. The growth rate of base money fell from 15.8 per cent in 2010 to 6.3 per cent in 2011. Broad money surged increased by 14.2 per cent in 2011 (down from 22.7 per cent in 2010). This figure is slightly below the estimated nominal GDP change in 2011, which means that monetization level (i.e. the ratio of broad money to GDP) leveled off last year.

The total fiscal deficit (including central and local budgets, social funds and Naftogas, but excluding bank recapitalization costs) constituted UAH 54.7 billion in 2011, shrinking from UAH 80 billion in 2010. The central budget performance was the most impressive – its deficit was cut by more than half last year – from UAH 47.8 billion to UAH 22 billion. Apart from the robust increase in the budget revenues (which grew 22.4 per cent yoy in 2011 and exceeded the target by 3.5 per cent), the sharp decline in the central budget deficit is explained by the expenditure sequestration at the year-end (as the government faced substantial financing difficulties). The central budget expenditures (on the cash basis) constituted 97.1 per cent of the planned amount in 2012, which implies the gap of nearly UAH 10 billion. The transfer to the Pension Fund increased by 50 per cent yoy (from UAH 7.9 billion in 2010 to UAH 12.1 billion), despite the launch of a pension reform aimed at ensuring the sustainability of the Pension Fund finances. Naftogas financial deficit increased from UAH 18.2 billion (1.7 per cent of GDP) in 2010 to UAH 20.6 billion (1.6 per cent of GDP) last year on the back of higher gas import prices and unchanged domestic tariffs. Thus, the total fiscal deficit reached 4.3 per cent of GDP in 2011, which is much better than in the previous year, although the government clearly missed fiscal consolidation targets set by the IMF (it envisaged a general government deficit at the level of 3.5 per cent of GDP, including 0.7 per cent deficit in Naftogas accounts). Raiffeisen Bank Aval’s analysts estimate that, given government’s financing squeeze in the second half of the year, the public debt to the GDP ratio slightly abated last year – from 40 per cent in 2010 to 36 per cent.

In 2012, the bank’s analysts expect economic growth to decelerate to 3-3.5 per cent on the back of global economic woes, a lower harvest and the tapering off EURO-2012 effect on the domestic demand. The inflation rate is likely to increase (to around 10 per cent) driven by resurging food prices, the PPI pass-through effect and increasing tariffs for utilities. Even under relatively benign assumptions (i.e. successful completion of gas negotiations with Russia, stable global steel prices, the return to global financial markets in the second half of

Public Debt (r.h.s.)Fiscal deficit

0.20.7 1.5

8.7

7.5

4.3

1.11.8

3.2

29.0

17.715.0

12.3

19.9

33.1

40.0 38.0

24.7

-2

0

2

4

6

8

10

2011e2003 2004 2005 2006 2007 2008 2009 2010

% of GDP

0

10

20

30

40

50% of GDP

Fiscal Indicators

-6

-8

-10

-4

-2

0

2

4

6

8

Capital account Current account Balance of Payments

USD billion

Balance of payments

Q1

08

Q2

08

Q3

08

Q4

08

Q1

09

Q2

09

Q3

09

Q4

09

Q1

10

Q2

10

Q3

10

Q4

10

Q1

11

Q2

11

Q3

11

Q4

11

3.5

3

5.7

2

6.0

6

-5.6

1

-4.5

9

-1.8

8

-4.8

5

4.5

9

3.0

5

-3.6

6

-3.3

1

-2.0

7

-3.7

1

-0.6

4

-0.1

7

-0.0

5

-0.8

8

-0.0

4

0.5

1

-0.9

8

-2.5

1

-0.6

8

-0.6

3

1.0

4

-1.1

72

.29

-1.5

52

.23

-2.5

20

.8

-4.0

41

.52

2.413.98

-5.23

-9.32

-2.05

-4.90

-1.55 -0.67

5.10

2.07

-1.47

1.11 0.68

-1.72-2.53

-0.14


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the year, near full rollover of corporate external debts and alleviation of depreciation expectations), the overall balance of payments is likely to stay in red over next twelve months. According to the Research and Analysis Unit, the C/A deficit will shrank to USD 7.8 billion (4.1 per cent of GDP) on the back of stable export prices, a decrease in gas import price and leveling off in demand for imports. The financial account surplus will fall to USD 5 billion mostly due to the deceleration in debt inflows. Accordingly, in line with these projections we expect a mild hryvnia depreciation (up to 10 per cent) this year.

ukraine’s banking sector developments in 2011The Ukrainian banking system continued to emerge out of the woods in 2011 as the lending started to recover, NPL levels reached the peak and most of the banks returned to the profitability. After the stagnating loan growth and strong recovery in the deposit base in 2010, the banking system was poised for the dynamic development in 2011. These expectations were largely met in the first three quarters of the year amid a robust inflow of the deposits and restart of the lending activity (both in the corporate and retail (local currency) segments). However, the sharp deterioration in economic sentiment (i.e. the resurgence of devaluation expectations) and the consequent tightening of the monetary policy (as the National Bank tried to sustain currency peg) dampened the growth of loans and deposits of the banking system in the last quarter.

Specifically, facing the severe liquidity squeeze, banks have massively raised the interest rates on loans and put the limits on the new lending volumes. As a result, the total loan portfolio of the banking system stagnated in the last quarter of 2011 after increasing by 2.9 per cent and 3.7 per cent qoq in Q2 and Q3, respectively. The total loan portfolio grew 9.6 per cent yoy in 2011, which is much better than in the previous two years (in 2009 and 2010 the loan growth rate constituted 2.2 per cent and 0.8 per cent, respectively), but it is still lower than the nominal GDP change. Thus, the deleveraging process in the domestic economy continues – the loan-to-GDP ratio descended from 77.4 per cent at end-2008 to 60.4 per cent at the moment. Across the segments, PI hryvnia lending was the fastest grower last year (34 per cent yoy increase), as the banks massively poured in the high-margin consumer lending business (the mortgage lending is still frozen amid high interest rates, unaffordable housing prices and much tighter loan conditions). CO loans grew 15 per cent last year driven by 19 per cent increase in the local currency loan volume. The FX loan business was largely stopped, except for lending to exporters. Consequently, the share of FX loans in the total loans fell from 46.6 per cent to 40.7 per cent in 2011, returning to the level of early 2006.

The total deposit growth rate constituted 17.6 per cent in 2011, decelerating from 26.3 per cent in

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40

60

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40

60

80

100 %

Total assets Assets' yoy growth rate (r.h.s.)

% GDP

Total assets

38.9

48.4

62.5

83.2

97.7 96.4

87.080.6

34

59 59

76

55

-4.9

2004 2005 2006 2007 2008 2009 2010 2011

7.012.4


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2010. In contrast to 2010, CO deposits were growing faster than PI deposits last year – the corporate deposit growth accelerated from 22 per cent in 2010 to 26.3 per cent in 2011, while the private deposit growth rate more than halved (from 28.5 per cent to 13 per cent). According to analysts of the bank, it could be explained, on the one side, by the robust recovery in the corporate earnings last year. Also, strong PI deposit growth in 2010 should be partially attributed to the return of the deposits (lured by the attractive interest rates), withdrawn from the system during the crisis phase in 2008-2009. Thus, the retail deposit growth slowdown in 2011 looked natural. The currency composition of PI deposits did not change last year - until August hryvnia deposits grew faster amidst a large interest rate differential, while the resurgence of depreciation expectations later in the year made FX deposits much more popular.

The banking system posted the aggregate loss third year in a row in 2011 - it constituted UAH 7.7 billion, falling by 40 per cent in yoy terms, while the aggregate ROE improved from minus 10.2 per cent to minus 5.3 per cent. The overall negative result masks the wide divergence in the financial indicators of individual banks. In fact, the aggregate losses are explained by the disastrous financial performance of just a few banks (which, most likely, did not yet fully emerge from the provisioning cycle) – the combined loss of top 5 loss-makers constituted UAH 10.2 billion in 2011 (132 per cent of the total loss), while in 2010 this figure was UAH 8 billion (60 per cent of total). On the other side, several large banks returned to the profitability last year and posted healthy profits (i.e. with the ROE in double digits). The number of loss-making banks reduced from 35 to 31 in 2011. The stabilization in the loan quality was apparently the main reason for improved financial performance last year. According to the NBU estimate, the total volume of problem loans fell by 7 per cent in 2011. Consequently, the loan loss provisions reduced by 20 per cent in yoy terms, while its ratio to total loans fell from 5.3 per cent at end-2010 to 4 per cent as of end-2011. At the same time, bank interest margins were squeezed from both sides last year – the funding costs went up in H2, 2011 as the banks raised deposit rates substantially (first of all, the short-term ones) to ensure the adequate liquidity levels, while the tightening competition on the lending side exerted downward pressure on the loan interest rates (unless banks largely stopped new lending in Q4, 2011). Banks’ net interest income grew just 3.7 per cent yoy in 2011 (after 13.5 per cent growth in 2010) and the net interest margin reduced from 5.8 per cent to 5.3 per cent. In the environment of shrinking interest margins, banks put more and more focus on the commission income. The net commission income of the banking

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2004

107.5 106.3

134.1

152.4

205.1

219.0

87

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2.2 2

45

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42

6.9

77

3.9

71

7.5

UAH billion

2005 2006 2007 2008 2009 2010 2011

%

Bank loans and deposits

Total loans Total deposits Loan to deposit ratio (r.h.s.)

72

4.0 7

93

.2

81

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13

3.8 18

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.1 35

7.8

32

7.7 4

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6.8174.9

162.9

Profitability indicators, %

Total profit, UAH billionROE (net), (r.h.s.)

8.4%10.4%

13.5% 12.7%8.5%

-32.5%

-10.2%

1.26

UAH billion

2.174.15

6.62 7.30

-31.49

-13.03

-7.71

-5.3%

%

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system grew 22 per cent yoy in 2011 (after 4.5 per cent fall in 2010), the net non-interest margin went up from 1.4 per cent to 1.5 per cent.

As of end-2011, there were 176 banks operating in Ukraine (unchanged from end-2010). One bank is currently under receivership, while 22 banks are in the liquidation phase. The Ukrainian banking system is still characterized by low degrees of consolidation and concentration. Despite numerous bank failures in the recent few years, the number of banks reduced only slightly comparing to the pre-crisis levels (there were 184 banks operating as of end-December 2008). The concentration levels did not change much either during the last three years – the market share of top 10 banks in the total assets is just slightly above 50 per cent, while in the neighboring CEE countries top 10 banks typically control 70-80 per cent of the market. The highest concentration is observed in the PI loan segment – here, 10 leading banks have combined a market share of 61 per cent, which is, however, lower than a year ago (63.4 per cent). Apparently, the smaller banks were much more aggressive in consumer lending last year, thus eating up the share of the largest banks.

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170

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190 % of total assets

Competitive landscape

Market share of foreign banksMarket share of state-owned banks# of operating banks (r.h.s.)

176

160

165

175 175

184182

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37

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16

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17

.0

Performance of the Banking Sector, 2007–2011

2007 2008 2009 2010 2011

Number of operating banks 175 184 182 176 176

Number of banks with foreign capital 47 53 51 55 53

Share of foreign banks in capital, % 35.0 36.7 35.8 40.6 41.9

Total assets, UAH bn 599.4 926.1 880.3 942.1 1054.3

Total assets, % of GDP 83.2 97.7 96.2 87.0 80.6

Total assets growth, % 76.2 54.5 (4.9) 7.0 12.4

Financial depth (deposits to GDP), % 38.9 37.7 35.8 38.3 37.0

Loans, % of GDP 59.2 77.4 78.4 66.9 60.4

Loans to deposits ratio, % 152 205 219 175 163

Equity, UAH bn 69.6 119.2 115.2 140.0 161.0

Capital adequacy ratio 13.9 14.0 18.1 20.8 18.9

Return on assets 1.50 1.03 (4.38) (1.45) (0.76)

Return on equity 12.7 8.5 (32.5) (10.2) (5.3)

Net interest margin 5.0 5.3 6.2 5.8 5.3

Cost to income ratio, % 58.6 50.1 50.4 54.6 62.6

Source: National Bank of Ukraine, Raiffeisen RESEARCH


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The share of foreign capital in the Ukrainian banking system slightly increased last year – from 40.6 per cent to 41.9 per cent. On the other side, foreign-owned banks lost a market share in all segments in 2011. Specifically, the share of foreign-owned banks in the total assets reduced from 43 per cent to 37 per cent (thus falling further off the peak of 48 per cent reached at end-2008). Following the latest crisis, foreign-owned banks switched to a more cautious approach, based on a moderate loan growth and conservative pricing policy. Interestingly, Russian-owned banks, which were aggressively expanding at the loan market in 2009-2010, went slower in 2011, as their market shares in the CO and PI lending segments stay unchanged. The market position of state-owned banks was stable last year – they control 17 per cent of the total assets and nearly 20 per cent of the CO loan market. Several private domestic banks were the major winners in terms of market share in 2011.

Raiffeisen Bank Aval has rather cautious outlook for the Ukrainian banking system. On the one side, the sector is likely to fully recover from the financial disaster of 2008-2009 soon. In particular, the bank’s analysts expect an aggregate financial result to be positive this year, while the volume of problem loans is likely to decrease further. At the same time, we do not expect dynamic development either. The main obstacles to this include the unstable macroeconomic environment, a lack of long-term domestic funding and a weak legal framework. Therefore, the bank’s baseline scenario foresees a loan growth at the level lower than the nominal GDP change, which means that the banking system will continue to deleverage in GDP terms.


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Donbass Arena Stadium, Donetsk


Bank performancePerformance highlights 120Risk management 121Network 124Personnel. Training and development 125Operations and IT 126Corporate business 127Micro business 130Retail business 132Treasury services 137


Bank performancePerformance highlights*Raiffeisen Bank Aval’s performance results in 2011 demonstrated its adherence to the business model of a moderate growth during the crisis period in the national and global economy. The bank not only maintained its leadership at the market among main peers and contin-ued providing quality services to customers, but also in-creased its lending activity in the environment of a tough competition for solvent and conscientious borrowers. The institution continued to operate as a universal bank that serves clients of all categories: legal entities and private individuals throughout Ukraine.

In terms of net assets, the bank maintained the fourth po-sition on the banking market; the amount of the bank’s net assets was UAH 54.3 billion at the end of 2011 (a slight reduction by 4.5 per cent yoy, mostly because of a decreased share of highly liquid assets).

The bank’s loan portfolio remained virtually unchanged during the year with view to the fact that the growth vol-ume of new loans was within the frames of the amount of repayment of the existing indebtedness. As of the year-end, the loans to customers amounted to UAH 33.7 bil-lion. Lending in 2011 was characterized by the substitu-tion of foreign currency loans with national currency loans in the bank’s portfolio. In conditions of limited lending and adequate liquidity, the bank continued to maintain the volume of its investments into government debt securi-ties at the previous year level. The total securities portfolio of the bank at the end of the reported year amounted to UAH 8.7 billion, and this was the largest volume among competitors, disregarding the state-owned banks Ukrex-imbank and Oschadbank.

Among the positive effects of the last year is the bank’s preserved resource base volumes on the domestic market in conditions of a strengthened competition and turbu-lence of cash flows during the reported year. The total amount of the bank’s capital as of the year-end was UAH 27.2 billion. The bank maintained its leadership and cli-ent confidence both in the corporate and retail business segments.

In 2011, the bank confirmed the power of its operational business and the potential of its successful development

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2010 2011

9.3%

3.3%0.9%

9.1%

33.9%

0.4%

7.2%

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8.7%

33.7%

0.5%

Other assets

Trading and investment securitiesTangible and intangibl assets

Loans to customersAmounts due from credit institutonCash and cash equivalents

Assets structure

7.2%

0.02%0.56% 0.8%

19.4%

27.3%

2.4%

7.8%

0.04%

16.0%

27.2%

2.4%

Other liabilities

Amounts due to credit institutionLiabilities evidenced by paper

Deposits from customersSubordinated debtEquity

UAH billion Liabilities structure

2010 2011

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20

30

40

50

60

3.54%

0.50%0.2%

1.14%

0.2%

1.23%

-0.2%

3.88%

Other operating profit/lossTraiding/Investments incomeNet Non-interest Income from fees and commissionsNet interest income

UAH billion

Operating Income Profile

2010 2011 -1

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*According to the International Financial Reporting Standards (IFRS)


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against the background of the worsening economic environment. Raiffeisen Bank Aval increased earnings in terms of key meas-urements of the operating income: the net interest income grew by 10 per cent yoy, and the net commission income increased by 8 per cent yoy. The effect of bad loans absorbed for the previous years allowed to reduce the loan loss provisions of the bank – in 2011 the allocations into loan loss pro-visions amounted to UAH 1.2 billion, what is by 42.5 per cent less than in the previous business year. All this allowed to improve the financial result of the bank: its net profit for 2011 was UAH 596 million, that is 7 times as much as in the past year.

Risk managementCredit risk

The credit risk is managed and controlled by setting risk limits that the bank is ready to undertake in rela-tion to individual counterparties and geographic and industry concentration and by following up risks related to such limits.

The credit quality audit procedure at Raiffeisen Bank Aval has been designed with a view of ensuring early detection of possible changes in the creditworthiness of counterparties, including regular revision of the amount of security. In compliance with its policy, the bank sets ratings within the framework of the loan portfolio. All internal risk categories shall be determined in compliance with the rating guidelines of the bank. The ratings by risk sizes shall be revised and updated regularly.

In the reported year, we complied with the credit risk requirements: •Maximumcreditriskpercounterparty(H7):12.09percent(therequirement:notmorethan25 per cent); •Largecreditrisk(H):23.04percent(themaximumvalue:notmorethan800percent); •Maximumamountofloans,guaranteesandsuretiesissuedtooneinsider(H):0.16percent(themaximum value: not more than 5 per cent); •Maximumtotalamountofloans,guaranteesandsuretiesissuedto insiders (H ): 2.93 per cent (the maximum value: not more than 30 per cent).

Market risk

The market risk is estimated based on the principles, guidelines and models implemented at Raiffeisen Bank International AG; in particular, sensitivity analysis used to estimate interest rate risk in the bank’s portfolios, monitoring of position and method for possible losses measurement and monitoring of ac-crued losses on foreign exchange transactions in the trading portfolio of the bank.

The market risk is assessed individually for trading and non-trading (banking) portfolios. The bank con-trols the level of acceptable market risk on open positions by setting the respective limits based on the

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Financial resultsUAH billion

Operating IncomeGeneral administrative ExpensesAllowance for impairment lossesNet Profit

5.2

2.9

0.084

-2.1

-1.2

0.596

3.1

5.1

2010 2011


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proposal of the bank and approval of the Market Risk Committee (MRC) at RBI. At their every meeting, the Assets and Liabilities Management Committee (ALCO) of the bank examines the current situation re-port in relation to market risk and its components, the use of the respective limits, investigation of market variables' impact.

Foreign exchange risk

The Market & Operation Risk Department on a daily basis monitors and analyzes open positions of the bank on foreign currencies and precious metals. In addition, in order to prevent excessive losses in consequence of revaluation of open foreign currency position of the bank, the profit/loss accrued on foreign exchange transactions are controlled every day. The Market & Operation Risk Department of the financial institution also provides stress testing and estimates potential losses in consequence of unfavo-rable and extreme fluctuations of currency rates.

In order to manage the bank’s open foreign currency position, there were set limits for every open for-eign currency position individually and for the general open foreign currency position. In addition, limits of accrued profit/loss on foreign exchange transactions and revaluation of an open foreign currency position were set.

In estimation of the likely change in foreign exchange rates, the bank’s experts take into account his-torical fluctuation in market exchange rates for every currency in the reported year and determine the likely change in the exchange rate with 99 per cent probability. That being the case, they independently determine a possible increase and drop in the rate of every currency.

Interest risk

For interest risk assessment in the bank's portfolios, sensitivity analysis is used; that being the case, experts measure the sensitivity of the yield curves on foreign currencies to parallel drifting by one basis point. Such analysis of the bank’s trading portfolio is made on a daily basis; for the non-trading portfolio – on a monthly basis. The bank’s experts also assess the impact of market rate fluctuations on the interest earnings of the bank.

The limits of the portfolio value sensitivity to change in rates of return are set individually for the national currency, US dollar, EUR, Russian ruble and Japanese yen. In addition, a limit on the general sensitivity to fluctuation of interest rates is set.

An interest on debit and credit transactions in UAH is accrued at a fixed rate. On lending operations with other banks, fixed-term client funds in a foreign currency are subject to a fixed rate. On lending opera-tions with clients and borrowed funds, including, without limitation, those on the terms of subordinated debt, the bank uses a combined approach when making agreements by using both fixed and floating rates and taking into account the specific market conditions.

Price risk

The price risk has a potential impact on profit/loss and capital of the bank. In order to prevent the price risk, the bank’s experts regularly trace changes in quotations of debt securities (bonds) in the trading portfolio of the bank and at every reporting date they change the value of such instruments to their mar-ket value. The experts also trace fluctuations of market interest rates and their compliance with quotation of securities.


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In addition, they estimate on a daily basis the sensitivity of trading positions to changes in market quota-tions (rates). The bank’s risk experts set the acceptable level of sensitivity to changes in market quotations (sensitivity limits) and regularly monitor the use of such limits. In addition, they set a limit to accumulated losses on trading transactions to limit the acceptable price risk.

Sensitivity to change in market quotations for a trading portfolio is calculated as a change in the portfolio value discounted to the reporting date on change in interest rate by 1 basis point (0.01 per cent).

Sensitivity to change in market quotations was UAH 39.744 thousand as at 1 January of 2011 and UAH 30.972 thousand as at 1 January 2010.

Liquidity risk

Raiffeisen Bank Aval’s experts estimate liquidity risk using the methods and approaches set by the re-quirements of the National Bank of Ukraine and Raiffeisen Group. In particular, they regularly generate a report on assets/liabilities mismatch in time to maturity and investigate the relevant gaps for the period. As such, the report only partially displays the real revenue and cash outflow, in order to determine an impact on liquidity we also trace behavior of products having no pre-set maturity date (current accounts of clients, correspondent accounts of banks) and fixed-term products that can be prolonged.

The bank also investigates stress scenarios that can affect liquidity, separating the financial and reputa-tion crisis scenarios. Besides, the experts of the bank investigate additional sources of liquidity that can be used in an emergency, including domestic government loan bonds of Ukraine.

The limits of cumulative liquidity gaps are set separately for each period.

Raiffeisen Bank Aval complies with the liquidity ratios stipulated by the National Bank of Ukraine. In order to improve control of liquidity ratios, risk managers set internal liquidity ratios traceable on a daily basis and presented at every meeting of the ALCO. If necessary, the bank performs stress testing for liquidity ratios and investigates possible impact of the changes in certain internal and external factors.

When analyzing the financial assets and liabilities for the time to maturity, the bank’s experts use as-sumptions in relation to the possibility of premature sale of securities in portfolios of the bank and in rela-tion to stability of balances on current and fixed-term accounts of the bank's clients.

networkThe bank's network had 907 outlets as at the end of 2011 including: — full-function outlets that provide the full list of standard banking services to individuals and micro, small, medium and corporate business clients (796); — commission outlets serving private clients making cash transactions (107); — outlets that serve premium and VIP clients (4).

In the reported year, the bank implemented the Network Reorganization project that resulted in the following changes: •newtypesofoutletsandfunctionaldutiesofoutlets'employees; •unifiedinformationresourcesaccesstemplatesbasedonfunctionalroles; •improvementinemployeeaccesscontrolinstrumentsoftheoutlets;


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•efficientallocationofstaffattheoutlets; •finalizedorganizationalstructureoftheoutlets.

In 2011, the bank continued working on Branch Network Optimization and Branch Network Efficiency Improvement projects.

Self-service network

The self-service network of the bank as at the end of 2011 consisted of: — ATMs with cash disbursement service (2,465); — self-service centers, in the network of which 488 information kiosks and 450 ATMs (cash in/ cash out) operate to make payments, repay loans, replenish deposits and provide other services to clients; — POS-terminals to make transfer of funds at points of sale (10,918).

In 2011, there were also implemented the following projects in the bank: — ATM Network Efficiency Improvement: implementation of P&L Statement, a new instrument ena-bling estimate return on every ATM; — PIN Change: a new service in the ATM network.

Personnel.training & developmentThe employee count of Raiffeisen Bank Aval was 15,007 as at 31 December 2011.

The bank's network optimization, revision of processes and change in the workload in the reported year stipulated a reduction in the number of employees compared to 2010. The processes of functional op-timization and centralization will play the key role in determining the number of employees in the bank for the future.

The consistent and strategically weighed policy of recruitment, motivation, training and development of employees serves as an objective prerequisite to employee loyalty and a high appreciation of the bank as the employer on the labor market. Raiffeisen Bank Aval was nominated for HR-Brand Ukraine 2011 award organized by Head Hunter Ukraine (hh.ua).

The human resources policy as part of the overall social responsibility of the bank gains continuous pub-lic recognition. In 2011, Forbes Ukraine named the Head of the bank's HR Service as one of the best human resources managers.

The personnel management policy of Raiffeisen Bank Aval is oriented towards assurance that the em-ployees have the required powers and competence at all levels and in all functional areas.

The Staff Training & Development Department of the HR Division serves as the base for training centers, where training seminars are held for the specific projects on an ongoing basis. Any and all approaches and programs of training and development are designed and implemented in compliance with the Raif-feisen Group standards.

Among the new initiatives of 2011 with strong emphasis on a training component are as follows: train-


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ing of newly appointed regional managers of outlet groups, implementation of new instruments of sales coaching, the Services to Sales initiative at the Information Center, and the Sales Force Efficiency project.

The modularized professional training programs for employees of outlets: cashiers/tellers, base product sale experts, client relationship managers for the premium-segment operate on an ongoing basis.

The total period of employee training in the bank in 2011 was 25,037 days within the framework of in-house training seminars and 2,613 days of external training.

In 2011, the bank's experts drafted 25 new electronic training courses. The bank's employees took a total of 88,246 electronic courses and passed 89,863 electronic tests.

In the reported year, over 700 more mid-level officials of regional directorates and experts of the Head Office (totaling 1,281 people) were engaged in the performance management process. Every partici-pant of the process always designed and approved with the supervisor the key competencies develop-ment plan.

A particular emphasis was made on the development of heads of outlets for Raiffeisen Bank Aval net-work: 875 heads of outlets and their potential successors participated in the project of integrated analy-sis and development of banking employees named SKARB. Based on the results of interviews for the purpose of comprehensive evaluation of knowledge and skills, there were designed individual develop-ment plans for the competencies required for the operation efficiency improvement. In the process of the project implementation, employees of personnel units, regional managers of outlet groups and heads of directorates mastered new methods of personnel evaluation, implemented new instruments of HR man-agement in their current operation.

operations & ItRaiffeisen Bank Aval continues to work on centralization and optimization of the operations. To this end, in November 2011 it completed implementation of the unique STP solution for electronic pay-ments processing in the national currency that enabled acceleration of client services and considerably reduced costs.

The operations are made by the employees of the Operations Division who provide high level of client services. The said results were achieved by designing and implementing the comprehensive model of personnel development that makes it possible to reduce the degree of impact of the transformations made in the organization on the process quality during the time of functions' migration from regions.

2011 was the year of innovation and implementation of strategic projects for operational support. The optimization processes touched upon absolutely anything in the operations of Raiffeisen Bank Aval. The bank successfully started the first phase of centralization of the card transaction services, and now the centralized processing of paper payments is being deployed.

The use of the efficient forecast and load management guidelines, strictly complying with the procedures, makes it possible to considerably reduce the number of typical errors faced by employees of outlets in the process of client service.

One of the important accomplishments is the implementation of electronic document workflow and elec-tronic archive system that will enable the bank to migrate to paperless operation in the due course.


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Further development of centralized back office will become an integral part of the large-scale transfor-mation program of the bank's operations that was named Opera Nova. Completion of the program's first phase is planned for the beginning of 2013.

The improved processes, advanced technologies, ongoing quality improvement of transactions confirm the reputation of the bank as a leader on the Ukrainian banking market.

Raiffeisen Bank Aval also continues working on the ongoing upgrade of the IT platform with special emphasis on the in-house IT processes of consolidation, centralization of data storage and optimization of the total number of IT programs.

One of the recent accomplishments of the bank in IT was the implementation of the 25 to 1 project intended to ensure successful migration of the regional payment system servers to the single powerful platform provided by the Data Center based in Kyiv. The project was implemented in summer 2010. As a result, the bank managed to fully centralize the ISAOD servers; 500 servers and over 5,000 worksta-tions were successfully installed on a single reliable Golden Telecom Data Center platform.

Golden Telecom Data Center is a state-of-the-art data processing center with the best power supply and cooling infrastructure equipment. The Data Center is compliant with Tier 3 + DC requirements, has a large spare capacity, and conforms to high security standards of Raiffeisen Group and, most impor-tantly, the NBU requirements applicable to data processing centers.

The 25 to 1 project was finalized in December 2011 as planned that became an important event for all IT units of Raiffeisen Bank Aval.

The benefits of the implemented project are: •consolidationandstandardizationofserverresourcesbyservervirtualization; •improvementofservers'resourcesutilization; •singlepointofDC-management; •decommissioningofRDserverhardware.

Raiffeisen Bank Aval is currently implementing a centralization program that provides for migration of all non-payment systems to data processing centers in Kyiv by the end of April 2012.

Successful implementation of the 25 to 1 project allowed raising the IT at Raiffeisen Bank Aval to a new level of high efficiency.

Corporate businessCorporate business continues to be one of the largest and most profitable client segments of the bank. In 2011, the net earnings from client service in the corporate segment were UAH 776 million. This is the best corporate business performance since the bank's becoming a member of Raiffeisen Group. Such earnings were facilitated by positive trends of the key business indicators and smoothly operating system of sales and partnership with clients.

The assets of the bank’s corporate business in the reported year grew by 8.7 per cent; the liabilities grew by 22.9 per cent that is in line with the strategy of well-balanced development of the bank. Under uncertainty and new risks in the global and Ukrainian economies, expansion of our loan portfolio would


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be unacceptable. The loan portfolio trends shall be in line with the growth rate and positive changes in macro- and microeconomy. Based on the results of 2011, the loan portfolio of the bank grew by 8.7 per cent; the quality loan service improved.

Considerable attention in the sale system was given to growth in liabilities of the corporate business. Today, it is the stable own resource base of banks that serves as the key to successful business. 22.9 per cent growth in liabilities confirms the positive trend that dates back as far as to 2007: throughout the said period, the liabilities of this business grew nearly four times. Corporate clients increasingly entrust their working capital and idle cash to Raiffeisen Bank Aval testifying to high confidence and good reputation of the bank in business circles.

In 2011, the bank took on service 1,907 new corporate clients or 11.5 per cent of the total client base of this business. Large multinational corporations also select Raiffeisen Bank Aval as their main financial partner. Therefore, based on the results of the year, 227 large international businesses became the new clients of the bank.

No considerable change occurred to the bank's loan portfolio structure in the reported year. As before, the corporate loan portfolio also remained well diversified by industries and client segments. Special emphasis was given to service of agribusinesses that form a strategically important segment for Raif-feisen Bank Aval, where the bank continues to be a leader. Therefore, the bank’s corpo-rate business extends every fifth loan to an agribusiness.

The bank actively participates (also as a sponsor) in the largest agro-industrial exhibitions and confer-ences, implements innovations and develops the market. In the end of 2011, Raiffeisen Bank Aval was recognized as Best Agrarian Bank by the Ukrainian Banker Awards 2011 contest held by the financial and analytical weekly Investgazeta.

Raiffeisen Bank Aval continues to be one of Ukraine's leading banks in the area of trading finance and documentary business. For 7 years in a row, the European Bank for Reconstruction and Development has been recognizing the bank as the winner in various nominations. Therefore, based on the operation performance in the reported year, the bank was awarded by EBRD as the most active issuing bank in Ukraine.

In 2011, the corporate segment of the bank continued active development of factoring services. Over the year, clients' accounts receivable was redeemed under factoring agreements for the total amount of UAH 2.3 billion. In terms of its current volumes of internal factoring, Raiffeisen Bank Aval is one of the largest factors in Ukraine.

The bank is further focused on meeting the needs of exporters and importers in high quality banking services. In addition to trade finance, comprehensive cash management and other service offerings, such companies can also count on an efficient support of business needs by the Treasury of the bank, as in terms of currency sale and purchase transaction volumes Raiffeisen Bank Aval is a leader in the Ukrainian banking market.

Dynamics of Deposits (Corporate Clients)

2006 2007 2008 2009 2010 2011

2,435

3,445

5,6966,038

7,270

8,945

8,000

9,000

UAH million

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

+41%

+65%+6%

+21%

+23%


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The cross sales of products offered by the leasing company, the treasury and the retail business (cards, payments) was one of the highest priorities at our corporate business in the area of sales in the reported year. Personal managers made it possible to intensively offer the full range of products and services to our clients, independently of their supporting business vertical.

Corporate businesscore services

•CASH MANAGEMENT: — opening and maintenance of current accounts; — real-time Client Bank system (Internet banking) and standalone computerized banking; — account statements by mobile phone and email; — collection, payment, transportation, and counting of cash; — payment services (collection of cash payments from individuals and cash revenues from author-ized agents to the account of the company); — consolidated accounts for client's own network; — central management of payments for all regional and structural units of the company; — statements on transactions in the SWIFT system (MT940, MT942); — cash pooling (automatic distribution of corporate resources across structural units); — zero balance (consolidation of cash balances of systemic clients); — money transfer, payment documents in national and foreign currencies; — purchase, sales and exchange of foreign currency; — salary projects; — corporate cards; — acquiring and Internet acquiring.

• BUSINESS FINANCE:(capital investment, fixed assets replacement, working capital finance) — investment lending; — project finance; — working capital finance; — car loans; — agricultural loans; — factoring; — corporate overdraft (to legal entities); — overdrafts with differentiated interest rates; — trade finance and documentary transactions (bank guarantees, export and import letters of credit, standby letters of credit, documentary collection); — lease services; — arrangement and participation in syndicated loan projects; — long-term financing guaranteed by foreign export credit agencies.

• DEPOSIT PRODUCTS: — deposits with interest paid on maturity; — deposits with interest paid on a monthly basis; — add-on deposits; — deposits with full or partial withdrawal of funds before maturity; — short-time placement of temporarily unemployed funds (3 days or longer).

• SECURITIES: — purchase and sales of securities on behalf of clients;


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— organization of bonds issue for placement in domestic and external markets; — underwriting (purchase of newly issued securities for their further placement or sales); — custodian services (custody and accounting of securities, information and consulting support, other services of securities depositary and custodian); — purchase, sales, discounting, and guarantee of notes.

• LEGAL AND FINANCIAL ADVICE. SEARCH OF FOREIGN PARTNERS FOR PURCHASE OR SALES OF EXISTING COMPANIES AND CORPORATIONS

Micro businessIn 2011, Raiffeisen Bank Aval actively worked with microbusinesses as demonstrated by positive indica-tors for the reported year. The net earnings from the cooperation with microbusinesses exceeded UAH 100 million. The bank earned UAH 240 million in commission income and UAH 170 million in interest earnings.

The said results were achieved mostly due to the update of the product line, promotion and special of-ferings for clients of the bank.

In particular, at the end of 2011 Raiffeisen Bank Aval offered entrepreneurs a new lending product: the market's first banking service Companion credit card.

The Companion credit card allows taking a loan without security/surety and use the loan funds free of charge in the sales network within the grace period (up to 47 days).

At the beginning of 2011, the bank implemented another lending product Easy Overdraft, the main benefits of which include a loyal approach towards estimation of limits, a simplified package of docu-ments, an opportunity to receive overdraft without pledge and also a reduction in the commission fee for overdraft based on the tariff of the current account service package. With the implementation of Easy Overdraft, the portfolio of such loans grew nearly 3 times compared to 2010.

In the reported year, the bank implemented a new card package Entrepreneur, which is an up-to-date package of banking services and value added services in a single offering based on a corporate pay-ment card (card account). Users of this service package can take advantage of special offerings from Raiffeisen Bank Aval and VISA international payment system and MTS Bonus loyalty program.

Especially for clients that operate in trade and service sectors, the bank designed the Alternative Solu-tions service package for them to manage current accounts and enjoy special terms of POS-terminal installation and operation.

In 2011, Raiffeisen Bank Aval focused on improvement of its product line that made it possible to create more client-oriented service packages for microbusinesses.

For the purpose of business client service improvement, the bank upgraded the process; in particular, it implemented deposit product use via the Client-Bank system. Raiffeisen Bank Aval constantly improves security of banking services and information protection when using the Client-Bank system with addi-tional security services and special protection instruments, in particular, tokens.


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Microbusiness services:

• CURRENT ACCOUNT (TARIFF PACKAGES)Packaged banking services for current account management.

• CLIENT-BANK SYSTEMThe remote banking services system for current accounts that allows managing accounts without visit to the bank.

• ENTREPRENEUR SERVICE PACKAGEThe service package to manage corporate finance based on a corporate payment card.

• ALTERNATIVE SOLUTIONS SERVICE PACKAGEService package to manage current accounts including acquiring service.

• DEPOSIT PROGRAMS — Deposit lineThis deposit allows partial withdrawing of funds within the specified limit at a fixed interest rate without termination of an agreement. — LeaderThis deposit allows clients to select an interest payment method: on a monthly basis or on maturity. — PartnerThis deposit can be used to secure loan obligations. — CapitalThe deposit provides for capitalization of interest, which will be added to the principal on a monthly basis for higher revenues.

• CREDIT TRANSACTIONS — Companion credit cardLoans for entrepreneurs without pledge and surety. — Finance of working capitalOverdraft, non-revolving loan facility. — Investment lendingLoans to purchase cars, agricultural machinery and equipment.

• AGRIBUSINESS LENDING PROGRAMS — Revolving and non-revolving loan facility Loans for working capital replenishment. — Agricultural investment loansLoans to purchase agricultural machinery and equipment. — Partner programs for agribusinesses Special offerings from partners of the bank.

• TRADE FINANCE — Irrevocable covered letter of credit in UAH — Tender guarantee(to be issued to clients for participation in tender bidding). — Travel guarantee (to be issued to travel agents).


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Retail businessIn the retail business, Raiffeisen Bank Aval in 2011 aimed at improvement of its product and service of-ferings.

With a market share of 5 per cent, the bank continues to be a leader in individuals' funds. Updated at the end of 2010, the deposit product line confirmed its compliance with the bank's client demands in 2011. The favorable deposit product terms for the fifth time in a row were recognized as Ukraine's best within the framework of Choice of the Year-2011 International Contest.

Savings of our clients may be placed to on-demand accounts and deposit accounts with the latter pro-viding a number of supplementary benefits: •paymentofinterestonmaturityoronamonthlybasisorcapitalizationofinterest; •addingon(including,withoutlimitation,viaself-servicebankingterminalsorbyusingastandingorder to replenish the deposit with no visit to an outlet); •addingonorpartialwithdrawaloffundsinthegraceperiod(7daysafterprolongationofthedeposit) without termination of an agreement; •on-demanddepositwithhigherinterestrateandfreeaccesstothedepositwithoutlimitationsandloss of interest; •depositswithinterestrateincreasingonamonthlybasis.

At Raiffeisen Bank Aval, depositors are able to find out their account status via the Information Center by using their client identification card or the retail Internet banking system Raiffeisen Online.

A deposit may be placed for 1, 2, 3, 6 or 12 months. The rates under deposit agreements will remain unchanged within the entire term of their validity.

The beginning of 2011 saw a recovery of active retail cash lending for various purposes that was sus-pended two last years. Therefore, in spring the bank started selling the Cash Loan product offered to pri-vate and salary project clients of the bank, in particular, within the framework of the cross sales program. In order to support the product sales, there was implemented a Ukraine-wide advertising campaign Easy Loans from Raiffeisen Bank Aval in May whereby clients started showing much higher interest in cash lending programs of the bank.

In order to reduce the workload of the bank’s outlets throughout the campaign, there was also imple-mented an online request service at the bank's website that was used by nearly 4,000 clients.

In addition, two campaigns within the framework of the Cash Loan for the Best Clients of the Bank product and promotion event for employees of the bank were successfully implemented. In the process of cash lending product sales, all channels to communicate with clients were used, including personal letters, telephone calls and SMS.

The bank extended a total of more than 46,000 loans in this area for the amount of over UAH 705 mil-lion in 2011.

In June 2011, within the pilot project framework, Raiffeisen Bank Aval resumed mortgage lending for individuals under the programs named Secondary Market Residence Loans and Mortgage Loans in Kyiv, Donetsk, Dnipropetrovsk, Kryvy Rig, Mykolaiv, Sevastopol, Simferopol, Poltava, Kremenchuk, Za-porizhia, Lugansk, and Kharkiv.


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Mortgage lending was resumed throughout the bank's network in September. The main innovation in the resumed mortgage lending was the complete centralization of such processes as verification, valuation of pledges, credit decision and extension. The bank also accredited notaries.

In 2011, an active work with the existing loans extended to individuals under the restructuring program continued. In order to accelerate the process of reduction in the foreign exchange portfolio, there was implemented a new mortgage loans refinance plan in October 2011 that allowed minimizing the terms and cost in the loan currency conversion for clients of the bank as no new mortgage agreement and issue of certificates from in the Technical Inventory Office and Housing Offices were required.

In 2011, the Credit Card product became one of the highest demanded lending products of the bank for individuals: for the year the bank sold 81,500 credit cards with a total credit limit of UAH 598 million. For the existing and new holders of credit cards the bank implemented two large-scale campaigns: an automatic increase in the credit limit and promotion of client cashless payments named Get Twice More from MasterCard® Credit Card from Raiffeisen Bank Aval.

Within the scope of the credit limit increase campaign, 80,500 clients (25 per cent of the total number of credit card holders) increased their credit limits for the total amount of UAH 232 million (15 per cent of the full amount stipulated by the credit limit).

The Get Twice More with MasterCard® Credit Card from Raiffeisen Bank Aval campaign lasted for three months (July-October, 2011). Under the program, clients who paid more than UAH 250 using a Mas-terCard credit card automatically took part in the drawing of UAH 500 that were placed on their credit accounts. Based on the results of the campaign, the volume of fund transfers with the use of MasterCard cards grew by 63 per cent and volume of fund transfers on all credit cards grew by 40 per cent.

For the purpose of higher activation of credit cards from June until the end of 2011, the bank, jointly with the MasterCard payment system, implemented a motivation campaign for credit card sellers Sell, Activate, and Win! This helped to increase the level of active credit card in the MasterCard payment system by 4 per cent to 61 per cent; 29,000 new cards were issued by the MasterCard payment system.

In April 2011, the bank resumed overdraft lending for clients of the bank having salary or pension ac-counts. For the year, we set 8,700 overdraft facilities worth UAH 6 million.

Raiffeisen Bank Aval achieved considerable results in development of packaged products for individu-als. In 2011, the number of the bank's clients who used the benefits of services and packages grew by 13 per cent; the number of active accounts on packaged service terms was more than 1.1 million that proves the leadership of the bank in serving card accounts of its clients.

The clients, who receive pensions and monetary assistance or use the service packages Pension Optimal and Pension Light, are now able to open for their accounts an international payment card that makes it possible to pay in retail networks in Ukraine and abroad, make payments in self-service kiosks, receive additional mobile bonuses under the My MTS loyalty program.

Raiffeisen Bank Aval was Ukraine's first bank to offer premium clients free of charge account mainte-nance with four premium cards in the Premium package. The product was appreciated by premium clients as it takes into account their specific needs. The number of active accounts using this package totals 98 per cent.

Using packaged services, clients use state-of-the-art banking services at a single beneficial tariff in com-pliance with their needs. In addition, the bank improved the quality of client service due to packaged


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services, expanded the range of the services provided to clients on special terms. By way of example, the PIN change service in ATMs makes it possible for a client to independently change the PIN issued with the payment card, to any other convenient combination of digits selectable by the client.

In the reported year, Raiffeisen Bank Aval offered its clients to use the benefits of Raiffeisen Online, a new state-of-the-art system designed in compliance with any and all security requirements, which allows the bank’s clients to access their accounts on the Internet. Clients are able (at any time) to check card and other personal accounts (current, deposit and credit accounts) and receive the detailed account state-ments without visiting an outlet of the bank. In addition to the actual balance of accounts and the history of transactions on them, clients can browse detailed information on products and cards.

For the first time in the reported year, the bank implemented a new approach towards development of customized client offerings. Understanding the needs of the existing retail clients, the bank provided them with customized offerings of cash loan, credit card or overdraft. Such approach was implemented so that to meet the needs of the existing clients of the bank and minimize the time of credit decision making. A decision shall be pre-approved, and the client only needs to visit an outlet to address the required formalities. Nearly 100,000 clients have used the said offerings so far.

The bank also continued to expand the list of services in self-service centers (SSC). Self-service centers operate as mini-outlets with installed self-service banking terminals that allow the bank's clients holding Visa or MasterCard payment cards issued by Raiffeisen Bank Aval to make a broad range of banking transactions independently, not contacting any employees of the bank’s outlets, in particular: replenish deposits, repay loans, pay invoices, transfer funds between cards, enter cash on account or the like.

In 2011, the bank implemented instant payments at SSC. Now clients can choose a convenient time to pay for products and services in favor of other companies via the bank’s self-service center network. That being the case, such payments will be credited as intended in a matter of minutes. A specific feature of instant payments is that self-service centers provide automatic online verification of personal accounts or a client order number that assures error-free crediting of the payment.

Raiffeisen Bank Aval is one of the recognized market leaders in bullion sales volumes. The bank offers clients a broad product range of investment and collection coins produced by major mints of the world, most of which are distributed by the bank acting as the exclusive distributor. In addition, two exclusive coins were imported in 2011 under personal sales orders, and sales of coins to other banks of Ukraine in the interbank foreign exchange market of Ukraine were resumed.

The bank’s retail business pays special attention to development of money transfer services and loyalty programs for regular clients of the bank. In the reported year, the bank offered money transfers using the Aval Express system without filling any paper forms by clients and implemented a discount system within the framework of the loyalty program. In addition, Raiffeisen Bank Aval continued expanding the bank partner network for money transfers via the Aval Express and Western Union payment systems.

Retail services

•DEPOSIT PRODUCTS — deposits with interest paid on maturity; — deposits with monthly payment of interest; — add-on deposits with capitalization and compound interest rate; — deposits with full or partial early withdrawal of funds; — deposits for pensioners with monthly payment of interest and replenishment.


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•CURRENT ACCOUNTS — current accounts for individuals (non-card); — current pension accounts (non-card) to receive pensions and social benefits; — Onix Pension payment cards.

•CARD PRODUCTS — card accounts based on the Optimal and Premium packages for private and salary clients; — packaged services for private clients, whose card accounts are opened in USD or EUR; — card accounts based on the Optimal Light package for salary clients; — card accounts based on the Pension Basic, Pension Light, Pension Optimal packages for clients receiving pension/social assistance; — credit cards (Profitable, Standard, and Premium packaged rates); — Mobile Bonus MTS: a joint program of Raiffeisen Bank Aval and MTS Ukraine.

•LOANS — Cash loans for the best clients; — Cash loans in cross sales; — Cash loans in standard sales.

•MORTGAGE LENDING — secondary market residence loans; — mortgage loans.

•ATM SERVICES TO CARDHOLDERS — release of cash; — replenishment of accounts; — review of an account balance and mini statements; — ATM-Express money transfer (funds transfer between cards); — payments; — PIN change; — subscription to M-banking service.

•SERVICES TO CARDHOLDERS VIA SELF-SERVICE TERMINALS — account balance and mini statements; — ATM-Express money transfer (funds transfer between cards); — loan repayment and credit account statements; — replenishment of deposits and deposit account statements; — funds transfer and payments to any accounts; — subscription to the automatic invoice payment service.

•ADDITIONAL SERVICES FOR CARDHOLDERS — mobile banking; — payment card to an account in the name of an attorney-in-fact; — insurance policy for the time of travelling abroad; — concierge services; — setting of individual limits on cards; — e-mail statement; — online statement; — funding of deposits from a card account by a standing order; — loan repayment from a card account by a standing order;


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— payments to companies from a card account by a standing order; — automatic payment of invoices and regular payments (Direct Debit); — payment portal services at the bank's website (Internet-based payments for utilities, mobile pay-ments, purchase of electronic vouchers, etc.); — PIN change.

•MONEY TRANSFER — funds transfer via Western Union (within Ukraine and abroad); — funds transfer between individuals in Ukraine by using the Aval-Express system; — personal transfers from Russia via Gazprombank JSB outlets; — funds transfer from CIS countries via the Quick Mail money transfer system; — funds transfer from legal entities to individuals via the Aval-Express system; — funds transfer between card accounts via ATMs or self-service banking terminals (ATM-Express); — funds transfer via the bank's cash departments to any payee account.

•CHECKS — sales of American Express traveler check forms; — collection of personal and traveler checks and their encashment; — encashment of traveler checks.

•BULLION TRANSACTIONS — sale of investment coins produced by major mints of the world as the exclusive distributor in Ukraine; — sales of bullion made by renowned producers.

•LEASE OF PERSONAL DEPOSIT BOXES BY INDIVIDUALS

treasury servicesRaiffeisen Bank Aval is recognized as an active participant in the Ukrainian interbank market, a leader in virtually every segment of the Ukrainian financial market, including, without limitation, money, foreign currency, and securities markets.

Long years of experience in treasury operations and high operation standards ensure successful man-agement of the liquidity and cash flows of the bank. This results in strict compliance with the NBU’s pay-ment schedules, economic requirements and, most importantly, provides an optimal balance of the risks, profits and liquidity that is a priority area in treasury operation.

As a highly qualified and sophisticated financial agent, Raiffeisen Bank Aval maintains regular trading relations with more than 200 banks, including, without limitation, many foreign institutions having perfect reputation and considerable experience in making treasury transactions, international and banking set-tlement.


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Metalist Stadium, Kharkiv


Consolidated financial statementsConsolidated statement of financial position 140

Consolidated income statement 141

Consolidated statement of comprehensive income 142

Consolidated statement of changes in equity 142

Consolidated statement of cash flows 143


Consolidated statement of financial position

notes 2011 2010

Assets

Cash and cash equivalents 6 7,166,781 9,270,920

Trading securities 7 309,580 740,045

Amounts due from credit institutions 8 453,510 384,903

Loans to customers 9 33,702,676 33,870,374

Assets held for sale 10 323,396 92,724

Investment securities: 11

- designated at fair value through profit or loss 6,017,572 5,467,381

- available-for-sale 73,904 54,670

- held-to-maturity 2,289,902 2,806,633

Investment property 12 117,982 56,281

Property and equipment 13 2,513,848 2,692,209

Intangible assets 14 693,788 589,032

Current income tax assets 7,927 5,256

Deferred income tax assets 15 178,414 396,037

Other assets 17 406,617 365,147

total assets 54,255,897 56,791,612

Liabilities

Amounts due to the National Bank of Ukraine 200,153 —

Amounts due to credit institutions 18 16,020,052 19,409,987

Amounts due to customers 19 27,243,773 27,268,833

Debt securities issued 20 43,150 21,167

Current income tax liabilities 9,732 566

Subordinated debt 21 2,380,476 2,368,864

Provisions 16 42,033 131,257

Other liabilities 17 542,631 432,909

total liabilities 46,482,000 49,633,583

equity

Share capital 22 3,083,241 3,083,650

Additional paid-in capital 3,032,156 3,033,376

Other reserves 1,155,285 1,161,626

Retained earnings/(deficit) 537,856 (72,246)

total equity attributable to shareholders of the Bank 7,808,538 7,206,406

Non-controlling interests (34,641) (48,377)

total equity 7,773,897 7,158,029

total equity and liabilities 54,255,897 56,791,612

Signed and authorised for release on behalf of the Management Board of the BankVolodymyr Lavrenchuk Chairman of the Board

Gerhard Boesch First Deputy Chairman of the Board

15 May 2012


For the year ended 31 December 2011 (thousands of Ukrainian hryvnia)

The full version of Consolidated IFRS Financial Statements is available on http://www.aval.ua/en/about/bank_reports/?CSRT=2249529141916008945

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Consolidated income statementnotes 2011 2010

Interest income

Loans to customers 5,008,014 5,920,265

Amounts due from credit institutions 89,555 191,880

Investment securities 1,073,158 554,906

6,170,727 6,667,051

Interest expense

Amounts due to customers (1,062,168) (1,858,092)

Amounts due to credit institutions (992,296) (1,062,212)

Subordinated debt (219,179) (207,258)

Amounts due to the National Bank of Ukraine (12,555) —

(2,286,198) (3,127,562)

net interest income 3,884,529 3,539,489

Allowance for loan impairment 8, 9 (1,206,488) (2,098,704)

net interest income after allowance for loan impair-ment

2,678,041 1,440,785

Fee and commission income 1,428,566 1,327,995

Fee and commission expense (197,709) (191,336)

Fees and commissions, net 24 1,230,857 1,136,659

Net gains/(losses) from foreign currencies:

- dealing 132,726 130,456

- translation differences (26,010) 8,138

Net gains/(losses) from securities

Trading (3,486) 76,417

Investment securities designated at fair value through profit or loss

- dealing (1,429) 40,151

- revaluation (167,915) 246,332

Other income 25 75,554 61,133

non-interest income 9,440 562,627

Personnel expense 26 (1,573,810) (1,437,559)

Depreciation and amortisation 13, 14 (422,103) (339,393)

Other administrative and operating expenses 26 (1,112,308) (1,134,297)

Release/(charge) of allowances for impairment of other assets and provisions

16 17,559 (37,790)

non-interest expense (3,090,662) (2,949,039)

Profit before income tax expenses 827,676 191,032

Income tax expense 15 (231,798) (106,762)

Profit for the year 595,878 84,270

Attributable to:

- shareholders of the Bank 582,142 83,676

- non-controlling interests 13,736 594

595,878 84,270




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Consolidated statement of changes in equity

Consolidated statement of comprehensive income

Attributable shareholders of the Bank

non-controlling

intereststotal

equityShare

capital

Additional paid-in capital

other reserves

(note 22)

Retained earnings/ (Accumu-

lated deficit) total

31 december 2009 3,083,649 3,033,375 907,603 (173,948) 6,850,679 (48,971) 6,801,708Total comprehensive income for the year 272,049 83,676 355,725 594 356,319

Depreciation of revaluation reserve (Note 22) (17,923) 17,923 — — —

Transfer of revaluation upon disposal of property (Note 22) (103) 103 — — —

Issue of share capital (Note 22) 1 1 — — 2 — 2

31 december 2010 3,083,650 3,033,376 1,161,626 (72,246) 7,206,406 (48,377) 7,158,029Total comprehensive income for the year 22,319 582,142 604,461 13,736 618,197

Depreciation of revaluation reserve (Note 22) (23,783) 23,783 — — —

Transfer of revaluation upon disposal of property (Note 22) (4,877) 4,877 — — —

Dividends declared to shareholders of the Bank — (700) (700) — (700)

Purchase of treasury shares (409) (1,220) — — (1,629) — (1,629)

31 december 2011 3,083,241 3,032,156 1,155,285 537,856 7,808,538 (34,641) 7,773,897

note 2011 2010

Profit for the year 595,878 84,270

other comprehensive income

Revaluation of property 13, 22 (69) (638)

Unrealised gains/(losses) on investment securities available-for-sale

22 21,521 (11,865)

Income tax relating to components of other comprehensive income

15, 22 867 3,125

Reversal of income tax relating to property revaluations consequent upon enactment of new Tax Code

22 — 281,427

other comprehensive income for the year, net of tax 22,319 272,049

total comprehensive income for the year 618,197 356,319

Attributable to:

- shareholders of the Bank 604,461 355,725

- non-controlling interests 13,736 594

618,197 356,319





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Consolidated statement of cash flows

Year ended 31 december

notes 2011 2010

Cash flows from operating activities

Interest, fees and commissions received 7,262,347 7,109,566

Interest, fees and commissions paid (2,488,046) (2,412,953)

Gains less losses from dealing in foreign currencies and securities 163,744 167,086

Other operating income received 75,554 61,132

Personnel expenses (1,494,193) (1,409,624)

Other operating and administrative expenses (1,076,402) (1,168,766)

Cash flow from operating activities before changes in operating assets and liabilities

2,443,004 2,346,441

Net (increase)/decrease in operating assets

Amounts due from credit institutions (69,020) 120,647

Loans to customers (846,642) 6,204,553

Proceeds from sale of loans 52,204 910

Trading securities 395,961 (298,064)

Other assets (46,753) 27,247

Net increase/(decrease) in operating liabilities

Amounts due to credit institutions (1,962,400) (123,818)

Amounts due to customers 59,510 1,010,649

Other liabilities (27,123) (8,443)

net cash flows from operating activities before income tax (1,259) 9,280,122

Income tax paid (4,141) (19,860)

net cash flows from operating activities (5,400) 9,260,262

Cash flows used in investing activities

Purchase of investment securities (10,183,804) (15,793,101)

Proceeds from sale of investment securities 10,070,037 8,961,517

Purchase of property and equipment (500,167) (359,265)

Purchase of intangible assets (189,513) (237,167)

Purchase of investment property (25,053) —

Proceeds from sale of property and equipment 51,506 16,869

net cash flows used in investing activities (776,994) (7,411,147)

Cash flows from financing activities

Repayment of borrowings from credit institutions (1,553,789) (807,691)

Proceeds from borrowings from the National Bank of Ukraine 200,000 —

(Purchase of treasury shares)/proceeds from share capital issue (1,565) 2

Dividends paid (690) (50)

Proceeds from debt securities issued 59,270 40,484

Redemption of debt securities issued (37,288) (195,547)

net cash flows used in financing activities (1,334,062) (962,802)

Effect of exchange rate changes on cash and cash equivalents 12,317 (194,501)

net change in cash and cash equivalents (2,104,139) 691,812

Cash and cash equivalents, 1 January 6 9,270,920 8,579,108

Cash and cash equivalents, 31 december 6 7,166,781 9,270,920




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Arena Lviv Stadium, Lviv


SubsidiariesRaiffeisen Leasing Aval 146

Raiffeisen Aval Asset Management Company 147

Raiffeisen Bank International 149

Addresses of Raiffeisen Bank International 151

Addresses of Raiffeisen Bank Aval 153


SubsidiariesRaiffeisen Leasing Aval

Raiffeisen Leasing Aval LLC is a universal leasing company, which provides a full range of leasing serv-ices in any area of client operations. Raiffeisen Leasing Aval LLC was incorporated in June 2006 as a subsidiary company of Raiffeisen Bank Aval (87 per cent of the authorized capital) and Raiffeisen Leas-ing International Holding Company (13 per cent of the authorized capital).

2011 was a successful year for Raiffeisen Leasing Aval. This is confirmed by statistical data: the assets grew 14 times compared to 2010, the portfolio quality improved based on the market demands, mostly in the agricultural machinery (46 per cent) and transport (40 per cent) segments.

In the second half of 2011, the company successfully implemented two new projects: Leasing Drive – provision of lease services to individuals. Jointly with Raiffeisen Bank Aval, the company also imple-mented a project of lease services provision via banking outlets network with an added benefit of open and accessible services across Ukraine.

Based on the results of 2011, Raiffeisen Leasing Aval continues to be among the three market leaders by demonstrating such advantages as availability of qualified personnel and a positive image, an in-dividual approach towards every client based on their needs, access to international financial markets.

According to the TOP 100. Business Solutions survey, Raiffeisen Leasing Aval was named Reliable Busi-ness Partner based on the comprehensive estimation of financial, qualitative and quantitative perform-ance.

Since 2008, Raiffeisen Leasing Aval has been actively participating in the work of the Ukrainian Union of Lessors and initiated many propositions in relation to development of the lease market, specifically in the area of protection of leasing companies' interests, legislative amendments, market monitoring and analysis and statistical data collection.

In the reported year, the company successfully implemented a number of joint programs with partners that enabled meeting considerable client demands and setting close mutually beneficial partner rela-tions. The company will implement and improve joint programs in future.

The main objectives of Raiffeisen Leasing Aval for 2012 include improvement of service quality, imple-mentation of new projects and products, improvement of the portfolio quality, development and strength-ening of beneficial partnership.


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Raiffeisen Aval Asset Management Company

In 2011, Raiffeisen Aval Asset Management Company (AMC) saw innovations in the client services and product line.

Raiffeisen Bank Aval in the reported year offered services for the premium segment and opened seven new premium outlets, where clients, in addition to banking products are able to purchase certificates of share investment funds of Raiffeisen Aval AMC. The premium sector is the priority in the client services of Raiffeisen Bank Aval; therefore, 23 more outlets are to be opened in 2012 to operate in this client seg-ment in Kyiv and other large cities of Ukraine.

Premium clients account for 70 per cent of the target segment of Raiffeisen Aval as demonstrated by a steep growth in demand for the products of the company among such clients. In six months of their op-eration, premium managers mobilized over UAH 2 million in Raiffeisen Aval Investment Fund, and the number of clients grew by 50.

One of the core principles of Raiffeisen Aval AMC continues to be the creation of new alternatives for saving and increasing the investor capital. Therefore, in September 2011 the company's product line was supplemented with a new share investment fund First Gold that opened the Ukrainian investors an opportunity to invest in gold. The fund was organized due to the relevance of this investment asset in the volatile world market, rally in Ukrainian stock markets and concerns of investors in relation to devalua-tion of the national currency.

Even in the first month of operation, the Fund was in high demand especially among premium clients; more than UAH 2 million was mobilized. An important advantage of the Fund is its nearly 100 per cent correlation with the value of gold as the company buys assets at the most fair global prices of London Fixing with a minimal commission fee.

For the purpose of risk hedging of economically volatile 2011, the portfolios of the two funds Raiffeisen Shares and Raiffeisen Balanced also included gold that helped to reduce the negative impact of the market trend.

In 2011, the company again proved to be the market leader in asset management by achieving the top rank in mobilization of investor funds based on the results of the year. The Investment Fund Raiffeisen Money Market several times showed the highest yield among conservative products and became a successful alternative for investors that needed to keep capital and receive higher yield compared to banking deposits.

As at the beginning of 2012, Raiffeisen Aval AMC managed assets worth more than UAH 100 million.

2012 will become for Raiffeisen Aval AMC the year of continued dynamic development, expanded cli-ent service opportunities via new premium outlets of the bank and opening of new investment offerings for the existing and prospective investors.


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Raiffeisen BankInternationalA leading bank in Central and eastern europe, including Aus-tria

Raiffeisen Bank Aval is a subsidiary of Raiffeisen Bank International AG (RBI), which regards Central and Eastern Europe (including Austria), as its home market. For nearly 25 years, RBI has been operating in the Central and Eastern Europe (CEE) region, where today it maintains a closely knit network of subsidi-ary banks, leasing companies and numerous specialized financial service providers in 17 markets. As a universal bank, RBI ranks among the leading banks in the region. The powerful role played by the bank is supported by the Raiffeisen brand, which is one of the most widely recognized brands in the region. Following its strategic realignment in 2010, RBI has positioned itself as a fully integrated corporate and retail banking group in CEE. The bank not only has good access to retail and corporate customers, but also a comprehensive product offering. At the end of 2011 around 56,000 staff served approximately 13.8 million customers in around 2,915 business outlets in CEE.

In Austria, RBI is one of the top corporate and investment banks. It primarily serves Austrian customers but also international as well as major multinational clients operating in CEE. Moreover, RBI is represented in the world's financial centers and operates branches and representative offices in Asia. All in all, RBI employs about 59,000 staff and has total assets of approximately EUR 147 billion.

RBI operates subsidiary banks in the following CEE markets:

Albania Raiffeisen Bank Sh.a.

Belarus Priorbank, OAO

Bosnia and Herzegovina Raiffeisen Bank d.d. Bosna i Hercegovina

Bulgaria Raiffeisenbank (Bulgaria) EAD

Croatia Raiffeisenbank Austria d.d.

Czech Republic Raiffeisenbank a.s.

Hungary Raiffeisen Bank Zrt.

Kosovo Raiffeisen Bank Kosovo J.S.C.

Poland Raiffeisen Bank Polska S.A.

Romania Raiffeisen Bank S.A.

Russia ZAO Raiffeisenbank

Serbia Raiffeisen banka a.d.

Slovakia Tatra banka, a.s.

Slovenia Raiffeisen Banka d.d.

Ukraine AT Raiffeisen Bank Aval

As the parent company of these banks, RBI's shareholding in them is at or near to 100 per cent in most cases.


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RBI's development

RBI was established in October 2010 through the merger of Raiffeisen International with the principal business areas of Raiffeisen Zentralbank Österreich AG (RZB). RBI's position as one of the leading banks in CEE (including Austria) was further reinforced by the merger. RBI has been listed on the Vienna stock exchange since 25 April 2005 (until 12 October 2010 as Raiffeisen International). It is represented in several leading national and international indices, including the ATX and EURO STOXX Banks. RZB remained the majority shareholder following the merger, holding approximately 78.5 per cent of the shares. The remaining 21.5 per cent of RBI's shares are in free float.

RZB was formed in 1927 as “Genossenschaftliche Zentralbank” (GZB). Raiffeisen gained its first foot-hold in Central and Eastern Europe back in 1987, when it established its first subsidiary bank in Hun-gary. Other own subsidiaries have since been established; from 2000 onwards, Raiffeisen's expansion in the CEE countries has mainly been achieved by acquiring existing banks, which were combined into a holding company that from 2003 until October 2010 operated under the name Raiffeisen International. Raiffeisen International was listed on the stock exchange in April 2005 in order to finance its future growth as efficiently as possible. RBI was subsequently established in 2010 through the merger of Raif-feisen International with the principal business areas of RZB.

125 years of Raiffeisen in Austria

Raiffeisen's strong roots in Austria date back more than 125 years. Raiffeisen's first Austrian credit coop-erative was founded in Mühldorf, a village in Lower Austria, in 1886. Local cooperatives soon started working together and, in turn, founded regional cooperatives marking the beginning of the multi-tiered structure of the Raiffeisen organization. This not only helped to strengthen their position in the market, but also enabled better management and risk control. Numerous product and service cooperatives were founded on the back of increasing specialization and market integration. In mid-2011, the Raiffeisen Banking Group Austria (RBG), the country's largest banking group, managed EUR 83.8 billion in Aus-trian customer deposits (excluding building society savings), of which around EUR 50.3 billion was held in savings deposits; with a market share of 32.2 per cent, RBG has continued to expand its role as market leader among Austria's banks. RBG has achieved its strong market position through healthy organic growth.


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Addresses of Raiffeisen Bank InternationalRaiffeisen Bank Inter-national AG

AustriaAm Stadtpark 91030 ViennaPhone: +43-1-71707 0Fax: +43-1-71707 [email protected]@rbinternational.com

Banking network

AlbaniaRaiffeisen Bank Sh.a. European Trade CenterBulevardi "Bajram Curri"TiranaPhone: +355-4-238 1000Fax: +355-4-2275 599SWIFT/BIC: SGSBALTX www.raiffeisen.al

BelarusPriorbank JSC31-A, V. Khoruzhey Str.220002 MinskPhone: +375-17-289 9090Fax: +375-17-289 9191SWIFT/BIC: PJCBBY2Xwww.priorbank.by

Bosnia and Herzegovina Raiffeisen Bank d.d. Bosna i HercegovinaZmaja od Bosne bb71000 SarajevoPhone: +387-33-287 101Fax: +387-33-213 851SWIFT/BIC: RZBABA2Swww.raiffeisenbank.ba

BulgariaRaiffeisenbank (Bulgaria) EAD 18/20 Gogol Str.1504 SofiaPhone: +359-2-9198 5101 Fax: +359-2-943 4528SWIFT/BIC: RZBBBGSFwww.rbb.bg

CroatiaRaiffeisenbank Austria d.d. Petrinjska 5910000 ZagrebPhone: +385-1-456 6466Fax: +385-1-481 1624SWIFT/BIC: RZBHHR2Xwww.rba.hr

Czech RepublicRaiffeisenbank a.s.Hvezdova 1716/2b14078 Prague 4Phone: + 420-221-141 111Fax: +420-221-142 111SWIFT/BIC: RZBCCZPPwww.rb.cz

HungaryRaiffeisen Bank Zrt.Akadémia utca 61054 BudapestPhone: +36-1-484 4400Fax: +36-1-484 4444SWIFT/BIC: UBRTHUHBwww.raiffeisen.hu

KosovoRaiffeisen Bank Kosovo J.S.C.UÇK Str. No. 5110000 PrištinaТел.: +381-38-222 222Факс: +381-38-2030 1130SWIFT/BIC: RBKORS22www.raiffeisen-kosovo.com

PolandRaiffeisen Bank Polska S.A. Ul. Piękna 2000549 Warsaw Phone: +48-22-585 2001 Fax: +48-22-585 2585 SWIFT/BIC: RCBWPLPW www.raiffeisen.pl

RomaniaRaiffeisen Bank S.A. 15 Charles de Gaulle Square011857 Bucureşti 1Phone: +40-21-306 1000Fax: +40-21-230 0700SWIFT/BIC: RZBRROBUwww.raiffeisen.ro

RussiaZAO RaiffeisenbankSmolenskaya-Sennaya Sq. 28119020 MoscowPhone: +7-495-721 9900Fax: +7-495-721 9901SWIFT/BIC: RZBMRUMMwww.raiffeisen.ru

SerbiaRaiffeisen banka a.d.Bulevar Zorana Djindjića 64a11070 Novi BeogradPhone: +381-11-320 2100Fax: +381-11-220 7080SWIFT/BIC: RZBSRSBGwww.raiffeisenbank.rs

SlovakiaTatra banka, a.s.Hodžovo námestie 381106 BratislavaPhone: +421-2-5919 1111Fax: +421-2-5919 1110SWIFT/BIC: TATRSKBXwww.tatrabanka.sk

SloveniaRaiffeisen Banka d.d.Zagrebeška cesta 762000 MariborPhone: +386-2-229 3100Fax: +386-2-303 442SWIFT/BIC: KREKSI22www.raiffeisen.si

UkraineRaiffeisen Bank Aval JSC9, Leskova Street01011 KievPhone: +38-044-490 8888Fax: +38-044-285 3231SWIFT/BIC: AVALUAUKwww.aval.ua

Leasing companies

AustriaRaiffeisen-Leasing Interna-tional GmbHAm Stadtpark 31030 ViennaPhone: +43-1-71707 2966Fax: +43-1-71707 762966www.rli.co.at

AlbaniaRaiffeisen Leasing Sh.a.European Trade CenterBulevardi “Bajram Curri”TiranaPhone: +355-4-2274 920Fax: +355-4-2232 524www.raiffeisen.al

BelarusJLLC “Raiffeisen-leasing”31-A, V. Khoruzhey Str.220002 MinskPhone: +375-17-289 9394Fax: +375-17-289 9394www.priorbank.by

Bosnia and HerzegovinaRaiffeisen Leasing d.o.o. Sa-rajevoZmaja od Bosne 1171000 SarajevoPhone: +387-33-254 354Fax: +387-33-212 273www.rlbh.ba

BulgariaRaiffeisen Leasing Bulgaria OODMladost 4,Business Park SofiaBuilding 7B, 4th floor1504 SofiaPhone: +359-2-491 9191Fax: +359-2-974 2057www.rlbg.bg

CroatiaRaiffeisen Leasing d.o.o.Radnicka cesta 4310000 ZagrebPhone: +385-1-6595 000Fax: +385-1-6595 050www.rl-hr.hr

Czech RepublicRaiffeisen-Leasing s.r.o.Hvezdova 1716/2b14078 Prague 4Phone: +420-221-5116 11Fax: +420-221-5116 66www.rl.cz

HungaryRaiffeisen Lízing Zrt.Hungária krt. 40-441087 BudapestPhone: +36-1-298 8000Fax: +36-1-298 8010www.raiffeisenlizing.hu

KazakhstanRaiffeisen Leasing Kazakhstan LLP146, Shevchenko Str., № 12050008 AlmatyТел.: +7-727-3785 430Факс: +7-727-3785 447www.rlkz.kz

KosovoRaiffeisen Leasing KosovoGazmend Zajmi n.n., Sunny Hill10000 PrištinaPhone: +381-38-222 222Fax: +381-38-203 03011www.raiffeisen-leasing-ks.com

MoldovaI.C.S. Raiffeisen Leasing S.R.L.51 Alexandru cel Bun2012 ChişinăuPhone: +373-22-2793 13Fax: +373-22-2283 81www.raiffeisen-leasing.md


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PolandRaiffeisen-Leasing Polska S.A.Ul. Prosta 5100838 WarsawPhone: +48-22-326 36 66Fax: +48-22-3263 601www.rl.com.pl

RomaniaRaiffeisen Leasing IFN S.A.Nusco TowerSos Pipera Nr. 42Etaj 1A020112 BucureştiPhone: +40-21-306 9696Fax: +40-37-287 9998www.raiffeisen-leasing.ro

RussiaOOO Raiffeisen LeasingStanislavskogo St. 21/1109004 MoscowPhone: +7-495-721 9980Fax: +7-495-721 9901www.raiffeisen-leasing.ru

SerbiaRaiffeisen Leasing d.o.o. Milutina Milankovića 134a11000 Novi BeogradPhone: +381-11-20177 00Fax: +381-11-31300 81www.raiffeisen-leasing.rs

SlovakiaTatra Leasing s.r.o.Hodžovo námestie 381106 BratislavaPhone: +421-2-5919 3168Fax: +421-2-5919 3048www.tatraleasing.sk

SloveniaRaiffeisen Leasing d.o.o.Bleweisova cesta 301000 LjubljanaPhone: +386-1-241 6250Fax: +386-1-241 6268www.rl-sl.si

UkraineLLC Raiffeisen Leasing Aval9, Moskovskiy Av.Corp. 5 Office 10104073 KievPhone: +38-044-590 2490Fax: + 38-044-200 0408www.rla.com.ua

Real estate leasing companies

Czech RepublicRaiffeisen Leasing Real Estate s.r.o.Hvezdova 1716/2b14078 Prague 4Phone: +420-221-5116 10Fax: +420-221-5116 41www.rlre.cz

Branches and repre-sentative offices –Europe

FranceRBI Representative Office Paris9-11 AvenueFranklin D. Roosevelt75008 ParisPhone: +33-1-4561 2700Fax: +33-1-4561 1606

GermanyRBI Representative Office FrankfurtMainzer Landstraße 5160329 FrankfurtPhone: +49-69-2992 1918Fax: +49-69-2992 1922

MaltaRaiffeisen Malta Bank plc52 “Il Piazzetta” Tower RoadSliema SLM 1607Phone: +356-2260 0000Fax: +356-2132 0954

SwedenRBI Representative Office Nordic CountriesDrottninggatan 89P.O. Box 329410365 StockholmPhone: +46-8-440 5086Fax: +46-8-440 5089

UKRBI London Branch10, King William StreetLondon EC4N 7TWPhone: +44-20-7929 2288Fax: +44-20-7933 8099

Branches and repre-sentative offices – Asia and America

ChinaRBI Beijing BranchBeijing International Club 2002nd floorJianguomenwai Dajie 21100020 BeijingPhone: +86-10-653 23388Fax: +86-10-653 25926

RBI Representative Office Hong KongUnit 2106-08, 21st Floor,Tower One, Lippo Centre89 QueenswayHong KongPhone: +85-2-2730 2112Fax: +85-2-2730 6028

RBI Representative Office XiamenUnit 01-02, 32/FZhongmin Building No 72Hubin North RoadFujian Province301012 XiamenPhone: +86-592-2623 988Fax: +86-592-2623 998

IndiaRBI Representative Office Mumbai803, Peninsula HeightsC.D. Barfiwala RoadAndhere (W)400 058 MumbaiPhone: +91-22-2623 0657Fax: +91-22-2624 4529

KoreaRBI Representative Office KoreaLeema Building, 8th floor146-1 Soosong-dongChongro-kuSeoul 110-755Phone: +82-2-398 5840Fax: +82-2-398 5807

MalaysiaRBI Labuan BranchSuite No. 28.02, Level 28Johor Bahru City SquareOffice Tower 106-108Jalan Wong Ah Fook80000 Johor BahruPhone: +607-291 3800Fax: +607-291 3801

SingaporeRBI Singapore BranchOne Raffles Quay#38-01 North TowerSingapore 048583Phone: +65-6305 6000Fax: +65-6305 6001

USARB International Finance (USA) LLC1133 Avenue of the Americas16th Floor10036 New YorkPhone: +01-212-845 4100Fax: +01-212-944 2093

RBI Representative Office New York1133 Avenue of the Americas, 16th Floor10036 New YorkPhone: +01-212-593 7593Fax: +01-212-593 9870

VietnamRBI Representative Office Ho Chi Minh City6 Phung Khac Khoan StreetRoom G6District 1Ho Chi Minh CityPhone: +84-8-3829 7934Fax: +84-8-3822 1318

Raiffeisen Zentralbank AG

AustriaAm Stadtpark 91030 ViennaPhone: +43-1-71707 0Fax: +43-1-71707 1715www.rzb.at

Selected Raiffeisen Specialist Companies

F.J. Elsner Trading GmbHAm Heumarkt 101030 ViennaPhone: +43-1-797 36 0Fax: +43-1-797 36 230www.elsner.at

Kathrein PrivatbankAktiengesellschaftWipplingerstraße 251010 ViennaPhone: +43-1-53 451 239Fax: +43-1-53 451 233www.kathrein.at

Raiffeisen Centro Bank AGTegetthoffstraße 11050 ViennaPhone: +43-1-515 20 0Fax: +43-1-513 43 96www.rcb.at

Raiffeisen InvestmentAktiengesellschaftKrugerstraße 131015 ViennaPhone: +43-1-710 5400 0Fax: +43-1-710 5400 169www.raiffeisen-investment.com

ZUNO BANK AGAm Stadtpark 31030 ViennaPhone: +43-1-71707 2691Fax: +43-1-71707 762691www.zuno.eu


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Head Office9 Leskova St., 01011, KyivPhone: 0-800-500-500,+38 044 490-88-88E-mail: [email protected]

Cherkasy Regional Directorate224 Gogolya St.,18000, Cherkasy

Chernigiv Regional Directorate21 Peremohy Ave,14017, Chernigiv

Chernivtsi Regional Directorate143 Golovna St.,58022, Chernivtsi

Crimean Republic Directorate32 Naberezhna St.,95000, Simferopol

Dnipropetrovsk Regional Directorate4d Artema St.,49044, Dnipropetrovsk

Donetsk Regional Directorate46v F.Zaitseva St.,83086, Donetsk

Ivano-Frankivsk Regional Directorate19 Nezalezhnosti St.,76000, Ivano-Frankivsk

Kharkiv Regional Directorate11 Novgorodska St.,61166, Kharkiv

Kherson Regional Directorate17 Chervonoflotska St.,73000, Kherson

Khmelnytsky Regional Directorate54 Hrushevskoho St.,29000, Khmelnytsky

Kirovograd Regional Directorate2/14 Dekabristiv St.,25006, Kirovograd

Kyiv Regional Directorate7-7b Pyrogova St.,01030, Kyiv

Lugansk Regional Directorate61 Radyanska St.,91016, Lugansk

Lviv Regional Directorate8 Mateyka St.,79000, Lviv

Mykolaiv Regional Directorate19a Artyleriyska St.,54030, Mykolaiv

Odesa Regional Directorate20 Velyka Arnautska St.,65125, Odesa

Poltava Regional Directorate5a Monastyrska St.,36014, Poltava

Rivne Regional Directorate35 S. Petlyury St.,33027, Rivne

Sumy Regional Directorate1 Nezalezhnosti Square,40030, Sumy

Ternopil Regional Directorate8 Kardynala Yosypa Slipogo St.,46001, Ternopil

Vinnytsya Regional Directorate35 50-richya Peremohy St.,21001, Vinnytsya

Volyn Regional Directorate26 Vynnychenka St.,43021, Lutsk

Zakarpattya Regional Directorate19 Teatralna Square,88000, Uzhgorod

Zaporizhya Regional Directorate29 Turgeneva St.,69063, Zaporizhya

Zhytomyr Regional Directorate10a Peremogy Square,10014, Zhytomyr

Addresses of RaiffeisenBank Aval


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Річний звіт annual report 2011 - aval.ua · pdf filenon-interest income 9,440...

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