Corporate Banking

Year ended
31 December 2006 RUR’000
Related party
transactions
Total category
as per
financial
statements
caption
- other related parties 243,737 142,474
Key management personnel compensation 258,046 43,116
Year ended
31 December 2005 RUR’000
Related party
transactions
Total category
as per
financial
statements
caption
- short-term employee benefits 243,737 6,167,565 142,474 5,356,324
Estimate
Description of position
0% Cash and balances with the Central and National banks
0% State debt securities
20% Loans and advances to banks for up to 1 year
100% Loans to customers
100% Guarantees
50% Obligations and commitments on unused loans with initial maturity of over 1 year
100% Other assets
32. Fair Value of Financial
Instruments
Estimated fair value disclosures of financial
instruments is made in accordance with the
requirements of IAS 32 “Financial Instruments:
Disclosure and Presentation” and IAS 39 “Financial
Instruments: Recognition and Measurement”. Fair
value is defined as the amount at which the instru-
ment could be exchanged in a current transaction
between knowledgeable willing parties in an
arm’s length transaction, other than in a forced or
liquidation sale.
The fair value of financial assets and liabilities
compared with the corresponding carrying
amount in the balance sheet of the Group is
presented below:
Capital amounts
and ratios
Actual
amount in RUR’000
For capital adequacy
purposes
amount in RUR’000
As of 31 December 2006
Ratio for
capital adequacy
purposes
Minimum required
ratio
Total capital 28,163,873 31,147,138 15,00 8
Tier 1 capital 23,478,268 23,478,268 11,30 4
As of 31 December 2005
Total capital 22,820,266 22,804,843 15,60 8
Cash and balances with the Central and National
banks
31 December 2006 31 December 2005
Carrying
value,
RUR’000
Fair value,
RUR’000
Carrying
value,
RUR’000
Fair value,
RUR’000
37,271,329 37,271,329 19,455,358 19,455,358
Financial assets at fair value through profit or loss 12,820,238 12,820,238 15,677,102 15,677,102
Loans and advances to banks 64,759,001 64,759,001 53,995,068 53,995,068
Deposits from banks 19,717,654 19,717,654 11,139,028 11,139,028
Customer accounts 204,662,195 204,662,195 149,060,894 149,060,894
Financial liabilities at fair value through profit or
loss
947,172 947,172 1,840,641 1,840,641
Debt securities issued 33,963,427 34,296,945 26,044,207 26,112,669
The fair value of loans to customers, investments
available-for-sale and subordinated debt
can not be measured reliably as it is not practicable
to obtain market information or apply any
other valuation techniques on such instruments.
33. Regulatory Matters
Quantitative measures established by regulation
to ensure capital adequacy require the Group to
maintain minimum amounts and ratios (as set forth
in the table below) of total (8%) and tier 1 capital
(4%) to risk weighted assets.
The ratio was calculated according to the
principles employed by the Basle Committee by
applying the following risk estimates to the assets
and off-balance sheet commitments net of
allowances for impairment losses:
Tier 1 capital 19,827,152 19,827,152 13,60 4
As of 31 December 2006 the Group included
in the computation of Total capital for capital
adequacy purposes subordinated debt received,
limited to 50% of Tier 1 capital. In the event of
bankruptcy or liquidation of the Group, repayment
of this debt is subordinate to repayment of
the Group’s liabilities to all other creditors.
34. Segment Reporting
The Group’s primary format for reporting
segment information is business segments. Most
operations of the Group are concentrated in the
Russian Federation.
Business segments – The Group is
organised on the basis of two main business
segments:
• Retail banking – representing individuals’
customer current accounts, savings, deposits,
investment savings products, custody, credit
and debit cards, consumer loans and mortgages
and private banking.
• Corporate banking – representing direct debt
facilities, current accounts, deposits, overdrafts,
loan and other credit facilities, foreign
currency and derivative products as well as
transactions with small and medium enterprises.
In addition, ROSBANK’s headquarters, regional
centres administrative operations and certain
other business operations, including inter-bank
financial markets and financial institutions services
and custody and depositary services, are reported
separately under segment reporting as unallocated.
Segment assets and liabilities comprise
operating assets and liabilities, being the majority
of the balances sheet, but excluding items such as
taxation and borrowings. Internal charges and
transfer pricing adjustments have been reflected
in the performance of each business. Revenue
sharing agreements are used to allocate external
customer revenues to a business segment on a
reasonable basis.
Segment information about these businesses
is presented below.
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