Sberbank - Annual Report 2010 - 35 Related Party Transactions

Home Financial Report Financial Statements Notes 35 Related Party Transactions

# 35 Related Party Transactions

For the purposes of these consolidated financial statements, parties are considered to be related if one party has the ability to control the other party, is under common control, or can exercise significant influence over the other party in making financial or operational decisions. In considering each possible related party relationship, attention is directed to the substance of the relationship, not merely the legal form.

The Group's principal shareholder is the Bank of Russia (refer to Note 1). Other related parties in the tables below comprise key management personal and their close family members andassociated companies of the Group.

Disclosures are also made in Note 36 for transactions with state-controlled entities and government bodies.

As at 31 December 2010 and 31 December 2009, the outstanding balances with the Bank of Russia and other related parties were as follows:

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|  | 2010 | 2009
--- | --- | --- | ---
In millions of Russian Roubles | Note | the Bank of Russia | Other related parties | the Bank of Russia | Other related parties
Assets |  |  |  |  |
Cash and cash equivalents (contractual interest rate: 3.0%) |  | 212,451 | - | 345,035 | -
Mandatory cash balances with the Bank of Russia |  | 50,532 | - | 40,572 | -
Bonds of the Bank of Russia (yield to maturity: 4.0%) | 12 | 433,585 | - | 221,080 | -
Gross amount of loans and advances to customers (contractual interest rates: 9.5%-20.0%) |  | - | 528 | - | -
Impairment provision for loans and advances to customers |  | - | (7) | - | -
Other assets |  | - | - | 45 | -
Liabilities |  |  |  |  |
Due to corporate customers (contractual interest rate: 0.01%-3.44%) |  | - | 1,163 | - | -
Subordinated debt (effective interest rate: 6.5%) | 21 | 303,299 | - | 504,346 | -

|  | 2010 | 2009
--- | --- | --- | ---
In millions of Russian Roubles | Note | the Bank of Russia | Other related parties | the Bank of Russia | Other related parties
Assets |  |  |  |  |
Cash and cash equivalents (contractual interest rate: 3.0%) |  | 212,451 | - | 345,035 | -
Mandatory cash balances with the Bank of Russia |  | 50,532 | - | 40,572 | -
Bonds of the Bank of Russia (yield to maturity: 4.0%) | 12 | 433,585 | - | 221,080 | -
Gross amount of loans and advances to customers (contractual interest rates: 9.5%-20.0%) |  | - | 528 | - | -
Impairment provision for loans and advances to customers |  | - | (7) | - | -
Other assets |  | - | - | 45 | -
Liabilities |  |  |  |  |
Due to corporate customers (contractual interest rate: 0.01%-3.44%) |  | - | 1,163 | - | -
Subordinated debt (effective interest rate: 6.5%) | 21 | 303,299 | - | 504,346 | -

As at 31 December 2010 the Group has pledged federal loan bonds (OFZ bonds) and Eurobonds of the Russian Federation on the special accounts with the Bank of Russia as collateral against overnight interbank borrowings that the Group attracts on a regular basis from the Bank of Russia. Refer to Notes 8, 9, 12, 13 and 32. The carrying value of assets pledged is as follows:

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In millions of Russian Roubles | Notes | 2010 | 2009
--- | --- | --- | ---
Trading securities | 8 |  |
- Federal loan bonds (OFZ bonds) |  | 14,715 | 18,105
- Russian Federation Eurobonds |  | - | 6,348
Securities designated at fair value through profit or loss | 9 |  |
- Federal loan bonds (OFZ bonds) |  | 31,520 | 39,658
Investment securities available for sale | 12 |  |
- Federal loan bonds (OFZ bonds) |  | 42,498 | 65,299
- Russian Federation Eurobonds |  | 5 | 13,768
Investment securities held to maturity | 13 |  |
- Federal loan bonds (OFZ bonds) |  | 37,044 | -
Total |  | 125,782 | 136,830

In millions of Russian Roubles | Notes | 2010 | 2009
--- | --- | --- | ---
Trading securities | 8 |  |
- Federal loan bonds (OFZ bonds) |  | 14,715 | 18,105
- Russian Federation Eurobonds |  | - | 6,348
Securities designated at fair value through profit or loss | 9 |  |
- Federal loan bonds (OFZ bonds) |  | 31,520 | 39,658
Investment securities available for sale | 12 |  |
- Federal loan bonds (OFZ bonds) |  | 42,498 | 65,299
- Russian Federation Eurobonds |  | 5 | 13,768
Investment securities held to maturity | 13 |  |
- Federal loan bonds (OFZ bonds) |  | 37,044 | -
Total |  | 125,782 | 136,830

The income and expense items with the Bank of Russia and other related parties for the year ended 31 December 2010 and 31 December 2009 were as follows:

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| 2010 | 2009
--- | --- | ---
In millions of Russian Roubles | the Bank of Russia | Other related parties | the Bank of Russia | Other related parties
Interest income | 32,158 | 59 | 2,640 | -
Interest expense on subordinated debt | (27,851) | - | (39,989) | -
Interest expense other than on subordinated debt | (343) | (8) | (8,292) | -
Net provision charge for loan impairment | - | (7) | - | -
Net gains arising from trading securities | 8 | - | - | -
Net gains arising from investment securities available for sale | 570 | - | - | -
Other operating income | - | 6 | - | -
Operating expenses | (1,005) | (12) | (848) | -

| 2010 | 2009
--- | --- | ---
In millions of Russian Roubles | the Bank of Russia | Other related parties | the Bank of Russia | Other related parties
Interest income | 32,158 | 59 | 2,640 | -
Interest expense on subordinated debt | (27,851) | - | (39,989) | -
Interest expense other than on subordinated debt | (343) | (8) | (8,292) | -
Net provision charge for loan impairment | - | (7) | - | -
Net gains arising from trading securities | 8 | - | - | -
Net gains arising from investment securities available for sale | 570 | - | - | -
Other operating income | - | 6 | - | -
Operating expenses | (1,005) | (12) | (848) | -

For the year ended 31 December 2010, remuneration of the members of the key management personnel comprised salaries, bonuses and other staff related expenses totalling RR1 043 million (the year ended31 December 2009: RR 506 million).

## History

- 34 Fair Value of Financial Instruments
- 33 Derivative Financial Instruments
- 32 Contingencies and Commitments
- 31 Financial Risk Management
- 30 Segment Analysis

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