Chairman's Page

Victor Babariko
Chairman of the Management Board of Belgazprombank

Mr. Babariko was born on November 9, 1963 in Minsk.

In 1988, he graduated from the Belarusian State University, in 1995 – from the Academy of Public Administration under the aegis of the Cabinet of Ministers of the Republic of Belarus. Five years later, he finished a postgraduate school at the Belarusian State Economic University.

Mr. Babariko has been working in the country's banking system since July 1995. In July 2000, he was appointed Chairman of the Management Board of Belgazprombank.

In January 2002, the President of the Republic of Belarus A. Lukashenko officially thanked Mr. Babariko for his long and loyal service and significant contribution in the development of Belarus' banking system.

In June 2007, Mr. Babariko became a member of Belarus' Council for Entrepreneurial Development. The new membership of the Council was approved by the Decree of the President of the Republic of Belarus as of June 1, 2007. It was the first time when the representative of the Belarusian banking sector was appointed member of this competent body.

The development of private business in Belarus is essential for the country's social and economic growth: private enterprises contribute to job creation, encourage competition, and stimulate public activity. Belgazprombank's activities are aimed at supporting business, including small and medium-sized enterprises. It was the first Belarusian bank to offer its SME customers sophisticated lending products as part of the EBRD MSME program. In recent years, Belgazprombank was honored for providing services to entrepreneurs with a number of national awards (for detailed information please refer to: http://www.belgazprombank.by/diploms.html )

Mr. Babariko's membership in the Council evidences the bank's credibility among financial institutions of Belarus and its high contribution to the Belarusian economy.

Dear shareholders, customers, partners and employees!

The year 2009 has been the time of large-scale transformations for our bank. In a large part, the changes have been related to the injection of another 75 million US dollars by our Russian stakeholders, Gazprom and Gazprombank, in the authorized fund. The investment was made despite the global economic crisis and negative changes in the Belarusian and Russian economies. Thus, Belgazprombank’s authorized fund has increased by $150 million over the two past years. Notably, it was not a bailout measure, but an investment into the bank’s development.

The decision to increase the authorized fund was taken in early 2008. It was very important to us and in a way unique for the Belarusian banking system. We received the first tranche of $75 million back in 2008. The other part that we received when the global economic crisis peaked was much more significant for our bank and Belarus. What is of paramount importance is that this is real money that will be working for the Belarusian economy.

Other important events in 2009 include:
• A $30 million loan from the European Bank for Reconstruction and Development for SME financing was issued in the framework of a $40 million credit line approved by the EBRD Board in October 2008;
• International Finance Corporation issued a $10 trade finance guarantee and increased it to $30 million by the end of the year;
• EBRD credit line opened for trade finance was increased to $10 million;
• Fitch Ratings confirmed Belgazprombank long-term foreign currency Issuer Default Rating at ‘B’;
• Belgazprombank won the ‘Best Entrepreneur of the Year’ contest in the ‘Best Bank Providing Services to Entrepreneurs’ nomination for the third time;
• Belgazprombank entered VISA International payment system as a principal member and started issuing Visa cards and has become the first Belarusian bank to issue Visa Platinum cards.

Founded in September 1990, our bank is approaching its 20th anniversary as a backbone financial institution for the middle class, our main client segment and the most active part of the society.

Belgazprombank’s position in the bank system of Belarus has improved by a number of parameters. Currently, it ranks fourth in the banking system by authorized fund, fifth – by profit, and seventh – by assets and equity. In 2009 the bank’s profit totaled 67.8 billion Belarusian rubles (almost $25 million). Profit per employee (in dollars) increased 1.5-fold. The bank occupies a leading position by profit growth rate among its competitors.

Capital investments as well as growth of resources caused the bank’s assets to grow – they increased in 2009 almost 1.5-fold to reach 2 trillion 133 billion rubles (773 million US dollars) as of 1 January 2010. The regulatory capital exceeded 0.5 trillion rubles (200 million US dollars) – having doubled over a year.

We have almost completed the reengineering of our core processes. I am often asked about the reengineering results. The answer, I believe, can be given from two points of view. The first one is economic: the bank’s profit in 2006, when we just started reengineering, was much lower than the profit we generated in 2009. But in this economic answer there is an element of slyness as we do not know exactly how strongly reengineering influenced the volume of our profit. The most important outcome of reengineering is a great change in the employees’ psychology. Now we use a different approach to conducting business, we have come to in-depth and holistic way of thinking, and we know that we are able to do whatever we want. Confidence in ourselves and the bank as well as a strategic vision enable us to reach high results. However, the price we paid for reengineering is high and we are still paying it, but the effect is colossal. Nevertheless, it does not mean that the bank has already approached its ideal. Many aspects of our activities still need improving. One of these is risk management and control over all operations. Economic events of the past two years showed that a company can suffer great losses if it does not have a profound system of risk management. It is difficult to earn when risks are high. Therefore, those who will be involved in improvement of this system must understand that the principle ‘not to lose’ is also quite efficient.

Another aspect to be improved is our strategic development. Figuratively speaking, we need a sort of ‘electronic model’ of forecasting the future including our vision of prospects and trends of economic development at the macro-level and foreseeing customer needs.

Yet another issue to tackle is security. The structure of our loan portfolio has seriously changed, risks have grown – the bank has reached a level when building a smart and well-thought concept of internal and external security is a must.

Also, we will be moving towards further automation of banking processes, raise efficiency of the branch network and transform our branches into full-fledged minibanks.

We have established an expansive branch network: Belgazprombank is present in all regional centres of Belarus. Further network development will be carried out through establishing new centres of banking services in towns with population of over 50,000 people.

I would like to thank our esteemed clients, partners, stakeholders and employees for choosing Belgazprombank. You have made a right choice by joining the bank whose underlying principle is ‘tomorrow will be better than today’.

Evolutionary development is even more important than preserving the results that have been already achieved. Stability without progress has never been our ideal. It means that we will be improving our activities and making new great achievements together!

Victor Babariko,
Chairman of the Management Board

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