Message from the Chairman

Last year was a real “strength test” for the national banking system, and it was passed successfully. A complex of anti-crisis measures implemented by the federal Government and the Bank of Russia was effectively supported by the State Corporation “Deposit Insurance Agency’s” actions. The progress and results of their implementation are in detail described in the Annual report of the Agency that is now in your hands.

As an important financial safety net participant the Agency not only ensured smooth functioning of the deposit insurance system and managed receiverships of failed banks but also was engaged in prevention of failures of a number of socially and economically important depository institutions.

In 2009 as compared to previous years the number of insured events increased. However, well-organized massive deposit insurance payouts to depositors allowed not only to stabilize situation on the market of households’ savings, but also had a substantial stimulating impact on it. Thus, the total volume of household deposits in Russian banks increased in the reporting year almost by 1.6 trillion rubles – a record growth in recent years.

Receivership and liquidation procedures that were carried out by the Agency were complicated by poor financial position of failed banks and sharp increase – almost five times – of the volume of creditors’ claims. In this situation effective work in the area of asset collection and maintaining the value of assets had a special significance. Identification and challenging dubious transactions of failed banks as well as bringing to account of those responsible for bank failures had a substantial impact on the size of receivership estates and on market discipline in the banking sector.

An important component of the Agency’s operation during the financial crisis is its participation in measures aimed at prevention of bank failures. The practice demonstrated effectiveness of implemented measures and their positive impact on the overall situation in the banking sector. Majority of banks in relation to which implementation of financial rehabilitation measures started in 2008, during the reporting year showed positive dynamics of growth and development, while fulfilling their planned financial rehabilitation measures and increasing credit to businesses.

What is attracting special attention is that the Agency constantly follows the principle of transparency and information openness, consistently enhances its corporate governance practices. This allows its management and staff not to rest on their laurels and accomplish new objectives established by the Board of directors.

Deputy Prime Minister of the Russian Federation — Minister of Finance of the Russian Federation, Chairman of the Board of Directors of the Deposit Insurance Agency

A.L. Kudrin