21 February, 2006, Kyiv

1
Financing of Leases
21 February, 2006, Kyiv
International Conference Banking Sector and
Leasing Market Business and State Regulation
2
Basic Facts about VABank

• Full name Open Joint stock Company
  Vseukrainsky Aktsionerny
  Bank
• Short name JSC VABank
• Founding date July 2, 1992
• License ?35 of 03.12.2001
• Auditor DeloitteTouche
• Rating among Ukrainian banks 18 largest (by
  assets)
• 14 largest (by capital)
• 15 largest (credit portfolio)
• Moodys Rating ? (financial strength rating)
• B2/NP (foreign currency deposits)
• Stable outlooks

Shareholders December 23, 2005 the Bank
registered with the NBU its 18th issue of stock,
as a result of which its equity grew to 110.6
mln. UAH. Company TBIF
Financial Services BV purchased 9.55 stake in
VABank
According to Ukrainian Banking Association as of
31/12/2005
3
Dynamics of Financial Performance Indicators

• Assets and capital of VABank were growing in 2005
  much faster than the banking system overall

Growth of Assets, mln. UAH
Growth of Capital, mln. UAH.
82
191
mln. UAH. 2003 2004 2005
Assets 961,7 1 293,7 3 000,9
Loans 584,2 617,6 1 226,3
Customers accounts 519,3 857,3 1 306,3
Capital 52,5 52,5 110,2
Profit 4,636 8,016 15,1
4
Regional Network of VABank

• HQ in Kyiv
• 65 offices and branches
• 1180 staff
• Representation office in Budapest (Hungary)
• 129 ATMs

• Plan for 2006
• 150 offices and branches
• subsidiaries in all oblast capitals of
  Ukraine
• 210 ATMs

5
LEASING
6
Financing of Leases

• JSC VABank has vast experience of financing
  leasing programs.

• Within the framework of cooperation with one of
  the largest leasing companies, in 2005, VABank
  financed purchase for subsequent leasing of over
  100 cars worth of 11,572,700 UAH.

7
Decision Making Process
Decision made Analysis of
borrower-lessors creditworthiness

• Main components
• Assessment of borrowers (leasing companys)
  financial standing.
• Appraisal of the management team.
• Leasing companys market position vis-à-vis
  competition.
• Security (collateral).
• Sources of loan repayment.

8
Interaction Pattern
Interaction of JSC VABank with leasing
company-borrower
1
After opening of a credit line, the leasing
company approaches lessees in order to find most
suitable clients for the implementation of the
project.

• Selection of clients
• - financial analysis of operations
• - due diligence of legal documents and
  authorities of management team
• - clients reputation appraisal with help of
  internal security service.

2
3
Funds on credit line are disbursed in the form of
tranches after lessor presents to the bank
leasing agreements with lessees and leased assets
purchase contracts. Credit line is repaid
according to the repayment schedule at the cost
of leasing payments receipt under financial
leasing agreements.
4
9
Lease Enforcement Flow Chart
10
Lease Enforcement Outline
STEP 1 Closing of lease agreement
STEP 2 Signing of leased asset supply contract
STEP 3 Filing with the Bank of a loan
application disbursal of funds by the Bank to
the lessors account
STEP 4 Payment for leased asset, shipment and
registration, accepting to the balance sheet
execution of insurance policy for the leased asset
STEP 5 Provision of collateral
STEP 6 Transfer of the leased asset to the lessee
11
Structure of Financing through Leasing
Assets Prepayment Loan Maturity
1 Automobiles 15-30 Maximum 5 years
2 Highly depreciable special equipment 20-30 3-4 years
3 Locomotives 20 5 years
4 Farming equipment 20-30 5 years

• Decisions on financing assets referred to in
  lines 2-4 are made on a case-by-case basis due to
  their special purpose nature and limited
  liquidity.
• Financing of cars by JSC VABank

Pricing category of car Prepayment
lt 25 000 USD 15
gt 25 000 USD 20
A separate category is made up for cars
manufactured in CIS countries, with preferable
amount of prepayment equal to 25-30 of the asset
value (due to rapid loss of liquidity).
12
Insurance
In addition to finacing, leasing companies are
provided with the full range of insurance
services from Insurance company Leader.
13
Thank you!
CONTACTS
JSC VABank First Kyiv Branch, Kyiv, 36,
Degtyarevska street. Aleksandr Nezola, Credit and
Factoring Department. Tel./fax (044)
490-06-94 www.vabank.ua