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The Structure

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The Structure Powered By Docstoc
					RZB‘s Trade Finance business
            activities
 with a focus on CEE and CIS
           March 2008
 The Structure
                                                    Raiffeisen Banking
                                                          Group
                                 566 Raiffeisen banks, operating 2,300 branches in
                                                      Austria
                                                           100%

                                                8 Raiffeisen Landesbanks
                                                                 87.7%*


                                                             RZB

       TOTAL ASSETS:          EUR 205,361mn                                 Tier 1:
       PROFIT BEFORE TAX:   EUR     1,697mn              RZB     Group      7.4%
                                                                            Regulatory Own Funds:   10.1%




      Interests in Austrian   Central and Eastern Foreign Branches, Offices
                                                                             Specialist Companies
      Financial Institutions European Network Banksand Equity Participations

                                      Raiffeisen International

OPEC-Fund Trade Finance Workshop                                                                            Slide 2
Long term regional experience and
well positioned in CEE and CIS
markets
      Asi
       a
  Beijing     Ho Chi Minh City       Hong Kong   Mumbai   Seoul   Singapore   Zhuhai   Teheran



     North America

    Chicago   Houston New York   Los Angeles




            Banks
            Representative Offices
            Branches




OPEC-Fund Trade Finance Workshop                                                                 Slide 3
RZB Group – Key financial data
    Rating Data
                      Bank Financial     Long-Term      Short-Term
         Agency                                                                              Credit Strengths
                         Strength      Credit Rating   Credit Rating


                                                                       - Central position within the strongly cohesive
                                                                  Austrian
                                                            P-1     co-operative banking sector
                            C              Aa2                    - Stable funding base
                                                        (stable) - Stable domestic market position in corporate banking
                       (stable)         (stable)                    alongside well developed franchise in several CEE
                                                                  countries
                                                                  - Profitable wholesale banking franchise in CEE
                                                                    Stable funding base
                                                                - Solidarity among Raiffeisen banks underpinned by a
                                                                  comprehensive protection scheme
                                                                - Strong market position and well diversified operations
                           N/A                                  in Central & Eastern Europe
                                           A+            A-1
                                        (stable)       (stable) - Sound financial and risk profile of RZB
                                                                - Sound financial profile and defensible domestic
                                                                franchise
                                                                  of the Austrian Raiffeisen banks




OPEC-Fund Trade Finance Workshop                                                                                         Slide 4
  RZB Group – Key financial data

        Key figures overview
                                    in EURmn        2006*          2006          H1 2006       H1 2007       Change H1
07/06


           Balance-sheet total                      115,629        115,629       103,189       126,057            22.2%
           Profit before tax                            1,882          1,286            643            846        46.1%
           RoE before tax                               39.1%          26.7%        24.2%           25.5%         1.3 PP
           Tier 1 ratio (banking book)                      9.0%          9.0%        7.2%            8.1%        0.9 PP
           Total capital ratio                          10.8%          10.8%          9.1%          10.1%         1.0 PP
           Cost/Income ratio                            56.7%          56.7%        53.9%           55.3%         1.4 PP

                                      * including one-off effects such as the sale of Raiffeisen Bank Ukraine and 10% of
                                    Bank TuranAlem




 OPEC-Fund Trade Finance Workshop                                                                                          Slide 5
Award winning Service Quality




          Best Treasury and Cash Management Provider – Global Finance
          Best Bank in Central and Eastern Europe – Euromoney, Global Finance
          Best Bank / Risk Management in CEE – Treasury Management International
          Bank of the Year in Austria – The Banker
          Best Bank in Austria – Global Finance


    In addition, the following Network Banks of the RZB Group have been awarded "Best
    Bank" in their respective countries by international publications:

      Albania, Bosnia and Herzegovina, Hungary, Kosovo, Serbia, Slovakia and Ukraine


OPEC-Fund Trade Finance Workshop                                                        Slide 6
RZB‘s Trade Finance products
overview
          Irrevocable letter of credit
          Letter of guarantee
          Standby letter of credit
          Pre-export financing
          Post-shipment financing
          Warehouse financing
          Commodity and structured trade finance
          Export finance (ECA)
          Receivables purchase
          Discounting of promissory notes
          Forfaiting


OPEC-Fund Trade Finance Workshop                    Slide 7
Commodity & Structured Trade Finance

    Mission

     Commodity and Structured Trade Finance refers to structured
     short-term lending to finance the production, the purchase, the
     storage, the transportation of exchange-traded commodities,
     where the loan will be repaid from the proceeds of the sale of
     the commodity to pre-agreed off-takers with a

                                  Close control of the commodity
                                   flow
                                  Close control of the payment
                                   flow


OPEC-Fund Trade Finance Workshop                                    Slide 8
Commodity & Structured Trade Finance

    Customers
            Commodity producers in emerging markets
             (e.g. oil, metal ores,)

            Processing plants in emerging markets
             (e.g. refineries, steel plants)

            International trading companies


           Often, balance sheet lending is not possible,
          therefore we need to structure our financings!!


OPEC-Fund Trade Finance Workshop                            Slide 9
Commodity & Structured Trade Finance

    Products/Commodities


            Crude oil & oil products (accounting for ~ 60% of
             results)
            Ferrous & non ferrous metals
            Fertilizers
            Others (e.g. chemicals, agricultural products)




OPEC-Fund Trade Finance Workshop                                 Slide 10
Commodity & Structured Trade Finance

    Countries

             Russian Federation
             Ukraine
             Belarus
             Central Asian Republics of FSU
              (e.g. Kazakhstan, Uzbekistan)
             Romania
             Bulgaria
             Countries of former Yugoslavia




OPEC-Fund Trade Finance Workshop               Slide 11
Commodity & Structured Trade Finance

    Transaction Types


            Pre-export Financing
            Production & Tolling Financing
            Storage Financing
            Transport Financing
            Post-shipment Financing




OPEC-Fund Trade Finance Workshop              Slide 12
Commodity & Structured Trade Finance

  L/C facility structure
                             3. Delivery                     3. Delivery
                                               Trader                          Supplier
    Final Offtaker            Sales        RZB‘s customer Supply
                            contract,                       contract
                          assignment to
                               RZB
                          1. Export L/C                      2. Import L/C
     Offtaker‘s                                                                Supplier‘s
                           in favour of                       in favour of
                                                 RZB                               bank
         bank                 trader                            supplier
                                                            4. Payment under
                                                             the Import L/C
                                                            Pledge of collection
           4. Payment under the              Collection     account to RZB
           Export L/C                          account
                                            of the Trader
                                               with RZB

OPEC-Fund Trade Finance Workshop                                                            Slide 13
Commodity & Structured Trade Finance

  Pre-export financing structure
                         3. Delivery                        2.
                                of                               Deliv
                                                                 ery
                                                                                 Supplier
 Final Offtaker               crude oil       Trader
                                                           Supplyofcontract,RZB‘s customer
                         Sales contract,                        crude
                         assignment to RZB                 assignment to RZB
                                                                 oil
                                                   1. Disbursement
                                                                                      6. Release
                                                                                      of cash
                                                                       5. Repay-      cover
                                               RZB                     ment
         4. Payment to the
             collection
                                                   Pledge of                  Loan agreement
              account
                                                   collection
                                                   account to RZB
                                            Collection
                                             account                     Value of loan to the
                                          of the Trader                  Supplier = max. 80%
                                             with RZB                      of the value of
                                                                         crude oil delivery !
OPEC-Fund Trade Finance Workshop                                                          Slide 14
Commodity & Structured Trade Finance

    Control of product flow, proof of existence of the goods

                                  Production plan of producer
                                  Dispatch notice
                                  Railway bills
                                  Forwarder certificate of receipt
                                  Warehouse receipt
                                  Bill of Lading
                                  DAA (documentary acceptance act) in case of crude
                                   oil financing (via pipeline)




OPEC-Fund Trade Finance Workshop                                                   Slide 15
Commodity & Structured Trade Finance

    Control of payment flow



            Financing not for 100%, mitigation of price risk
             in case of pre-export financing structure
            Payment to be effected by the final off-taker to
             the collection account with RZB
            Notice of assignment and acknowledgement of
             assignment from Off-taker




OPEC-Fund Trade Finance Workshop                                Slide 16
Commodity & Structured Trade Finance

    Assessing the trader

              Product experience
              Market experience
              Track record
              Strategic partner of producer
              Any control over the producer
             Strategic partner of the final off-
             taker




OPEC-Fund Trade Finance Workshop                    Slide 17
Commodity & Structured Trade Finance

    Assessing the Off-taker

             Payment risk
                    Off-takers pre-approved by RZB in case
                     of payment on open account
                    All other off-takers have to open
                     documentary L/Cs in favour of our
                     customer
                    Notice of assignment, acknowledgement of
                     assignment
             Export off-taker vs. domestic off-taker
             Long term relationship vs. spot



OPEC-Fund Trade Finance Workshop                                Slide 18
Commodity & Structured Trade Finance

    Documents involved

           Supply contract
           Sales contract
           Performance undertaking/ Surety of
            supplier
           Purchase confirmation, documentary L/Cs
           Invoice of supplier to RZB’s customer
           Invoice of RZB’s customer to the off-
            taker
           Transportation documents




OPEC-Fund Trade Finance Workshop                      Slide 19
Commodity & Structured Trade Finance

    Risk overview
                 General risks         political risk
                                       payment risk
                                       fraud risk
                                       contractual risks


                 risks for             performance risk
                 Producer/Exporte      quantity and
                 r                      quality risk
                 Trader                handling risk
                 (Buyer/Seller)        transportation
                                        risk
                 Final Buyer
                                       market risk
OPEC-Fund Trade Finance Workshop       price and FX risks   Slide 20
Commodity & Structured Trade Finance

    Possible securities (combination!)

                Pledge on Goods
                Assignment of supply contract and sales contract
                A certain percentage of cash cover (10-30%)
                Payment instruments from off-takers issued by 1st class
                 banks (L/C´s, Standby-L/C´s, Guarantees)
                Payment undertakings or purchase confirmations from first
                 class off-takers
                Assignment of receivables (assignment of proceeds of
                 Letters of Credit, Bank Guarantees, Sales Contracts,
                 Payment Undertakings, Purchase Confirmations)



OPEC-Fund Trade Finance Workshop                                             Slide 21
Commodity & Structured Trade Finance

    Possible securities (combination!)

                 Pledge on collection accounts
                 Mortgage on borrower´s real estate (real estate
                  register!)
                 Careful selection of and close co-operation with
                    Freight forwarders
                    Insurance companies
                  Inspection and surveillance
                 companies
                 Warehouse        keepers



OPEC-Fund Trade Finance Workshop                                     Slide 22
Commodity & Structured Trade Finance

    Possible securities (combination!)



                Syndication of the loan
                Assignment of claims against insurance companies (RZB
                 being named as “loss-payee”)
                Insurance of payment risk of off-takers




OPEC-Fund Trade Finance Workshop                                         Slide 23
Commodity & Structured Trade Finance

    Trends



               “What you always wanted to know about ....
                 Commodity and Structured Trade Finance
                     ... but never dared to ask!”




OPEC-Fund Trade Finance Workshop                            Slide 24
Export Finance

    Mission

          Competence and know-how:
           Competence of top level and decades of experience
          Tailor-made export finance services:
          The key to successful cross-border business is a reliable
       associate
          who thinks globally but acts locally
          Comprehensive support:
          Consulting and supporting RZB‘s customers concerning all issues
       in respect
          of export insurance and export finance

OPEC-Fund Trade Finance Workshop                                       Slide 25
 Multi-Sourcing Transaction with ECA
                                                                  15% Down payment financing
 Sample multi-                           Raiffeisen Bank Aval        Local cost financing
                                                                        Self retention
 sourcing                                            Loan agreement
                                                                       L/C opening bank

 transaction with                                  “Commercial Loan”

 ECA                                       Corporate Ukraine

                                                      Loan agreement
                                                      85% of contract value + up to 100% of
    Delivery                                          ECA costs “ECA Facility”                       Delivery
100% of contract                                                                                 100% of contract
      value                                                                                            value


                                               Vienna
                                             Guarantee
                                        Finance credit cover

                   Exporter   *       OeKB                     COFACE       *        Exporter
                    Austria          Austria                   France                 France

               Sub-supplier
                                   Euler Hermes
                 Germany                                                        * Manufacturing risk
                                   Re-insurance        Parallel insurance              cover

OPEC-Fund Trade Finance Workshop                                                                             Slide 26
Examples for Successful
Export Financing
  Long-term financings for clients of our
Romanian      Network bank in cooperation
with/based on        guarantees issued by the
Norwegian ECA (GIEK)        and    by the Canadian
ECA (EDC) and COFACE        (France).*

     EUR 8,4 mio. Renault TK Axis Deal – Leasing
      Transaction, Russia

  EUR 108 mio. Export Project Financing of a
cellulose      factory in Estonia.
_________________

*) due to bank secrecy we are not permitted to publish the name of
the companies without prior written approval
OPEC-Fund Trade Finance Workshop                                     Slide 27
Cooperation with
International ECAs
Finalized Transactions with international ECAs within




We are currently also in contact with Sinosure (China), EKF
(Denmark), IFTRIC (Israel), NEXI (Japan), KEIC (Korea), IGA
(Serbia), CESCE (Spain) , SERV (Switzerland), ECGD (U.K.)
OPEC-Fund Trade Finance Workshop                              Slide 28
Export Finance

The Global Export Finance Department,
Vienna
       has an outstanding Export Credit
        Portfolio totalling approx. EUR 6
        billion
        as of December 2007

       has finalized export financing
        transactions in the volume of
        EUR 3 billion in the year 2007

       with various ECAs

OPEC-Fund Trade Finance Workshop            Slide 29
Our Responsibilities

       Export insurance
                                   under the Austrian Export
       Export finance             Promotion Scheme


      ECA-Multisourcing Center of Competence for

       International ECAs with the exception of US-Exim
       which is handled directly by    RZB Finance LLC, New York,
       USA.

       Network Banks Export Finance for deliveries and services
       originating (NWB) from the CEE countries is offered directly by
       our experts in the respective Network banks (= NWB), e.g.
       Raiffeisen banks in Poland, Hungary, Czech Republic, Croatia,
       Romania and Tatra banka in Slovakia.
OPEC-Fund Trade Finance Workshop                                    Slide 30
    RISK SHARING EXPERIENCE/SYNDICATIONS



      RISK SHARING EXPERIENCE / SYNDICATIONS




 OPEC-Fund Trade Finance Workshop           Seite 31
OPEC-Fund Trade Finance Workshop           Slide 31
Trade Finance Products
Kind of Participations used in RZB


   L/Cs, bank guarantees and payment undertakings issued by banks



     Negotiable instruments guaranteed by a bank as avalised bills of
       exchange and promissory notes


     Trade related pre- or post-financings to banks




OPEC-Fund Trade Finance Workshop                                  Slide 32
Syndication Techniques

          Risk Participations

              Searching for Participants in short-mid term trade
           related primary transactions offered to other institutions
           on an undisclosed and usually unfunded basis

          Forfaiting

              100% without recourse selling of trade related short and
           middle term transactions to other institutions or primary
           markets on a disclosed and funded basis


OPEC-Fund Trade Finance Workshop                                   Slide 33
Participation under L/C
Kind of Participations used in RZB
          Funded Risk Participations (not very common under L/C‘S)
                Settlement Limit
                KYC check
          Unfunded Risk Participations
                Settlement limit
                Counter Party Limit
                KYC check

    Agreements used with:
    External Banks:
                Master Risk Participation
                Participation according to Austrian Law
                IFA (International Forfaiting Association) Guide lines
                Frankfurter Agreement
OPEC-Fund Trade Finance Workshop                                          Slide 34
Participation under
Trade Finance Products

    Pre-conditions for risk participations under L/C‘s

          L/C has to be confirmed by RZB
          Following terms and conditions to be met:
             L/C available by sight payment or deferred payment
             with or without post financing
             valid for presentation of documents at the counters of
               RZB
             payable at the counters of RZB
             include order for confirmation
             acceptable L/C wording



OPEC-Fund Trade Finance Workshop                                   Slide 35
Participation under
Trade Finance

    Confidentiality of data:       especially with L/C’s

          Written consent from issuing bank that RZB Vienna is allowed
           to pass on data to third parties regarding the L/C under the
           risk participation. (Due to Austrian Banking Law)

          In case it is not possible to get this agreement from
           issuing bank, FI management has to authorize syndication
           department to proceed without such letter under full
           responsibility of FI.




OPEC-Fund Trade Finance Workshop                                      Slide 36
“Main Drivers for Risk
Participations“
  Advantages:

          Reduction of exposure to particular names, sectors or
           countries
          presents new reciprocity opportunities
          Increase in capacity to lend to particular
           entities/countries
          Diversification of risk and acquisition of target exposures
           where appropriate
          Additional income generation
          A market oriented capital allocation
          Building up international market expertise
          Optimising equity allocation within the group
           Broadening of
OPEC-Fund Trade Finance Workshop the investor base
                                                                   Slide 37
Syndicated Trade Finance
Volumes in CEE-CIS (2003-2007)
         35.000,00                                                                250
                                                          31.575,79
         30.000,00
                                                181                               200
                                                            207
         25.000,00

                                                                                  150
         20.000,00                   123
                                              16.380,54                                 Volume
                                                                                        No of Deals
         15.000,00                                                    12.832,75
                       87                                                         100

         10.000,00   7.653,46      7.827,47                              87
                                                                                  50
          5.000,00


              0,00                                                                0
                       2003          2004       2005        2006        2007



  Source: Dealogic

OPEC-Fund Trade Finance Workshop                                                                 Slide 38
Trade Finance Investors
Geographical Distribution
Trade Finance Investors:
                                                 Russia/CIS-CEE region
                                                attracting
       EUROPE
                                                   Trade Finance investors

                                                 Many small investors getting
                                                   limits for trade related
                                                risks
                                                   to invest

                                         ASIA
                                                   Borrowers keen to diversify
                                                     lending group
                                   GCC




OPEC-Fund Trade Finance Workshop                                          Slide 39
Trade Finance Market Trends

   Market Trends:

           Although Trade Finance volumes diminished in 2007, we expect
            volumes to increase in 2008 upwards due to market conditions
            (liquidity);
            Exporters- Importers will use:
                 Less open accounts
                 Less Documentary collections
                 Less cash payments

           CEE-CIS Banks will use Trade finance products for their own
            funding needs,
            (Sight L/C‘s with Post Financing)

           Strong competition among Banks, Insurance companies and ECA‘s

            Due to the complexity of the Structured Trade Finance Products,
             corporates used to borrow through projects finance or corporate
             finance syndicated markets. 2008 and upwards, we expect this
OPEC-Fund    trend to be changed.
            Trade Finance Workshop                                           Slide 40
RZB expects from potential Partners



         Regional Expertise
         Risk taking Capacity
         Product knowledge
         Master Risk Participation in place
         Funding




OPEC-Fund Trade Finance Workshop               Slide 41
Thank you for your attention!




OPEC-Fund Trade Finance Workshop   Slide 42

				
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