The State Bank for Foreign
Economic Affairs of Turkmenistan


The State Bank for Foreign Economic Affairs of Turkmenistan "Turkmenvnesheconombank" - the state commercial bank was founded in January 27, 1992 on the basis of former USSR Foreign Economic Bank by the Decree of the President of Turkmenistan Saparmurat Turkmenbashi. Turkmenvneshecombank, being contemporary of Turkmenistans independence was established for developing and strengthening foreign economic relations and for protecting monetary interest of Turkmenistan. The most important pre-condition for the banks creation was the implementation of wide scale investment program for the purpose of national economic radical reforming and ensuring economic prosperity of Turkmenistan.

For the purpose of promoting economic development of the country through all its history Turkmenvnesheconombank, acting as an Agent of the Government of Turkmenistan on the international capital markets, carried out the work of attracting foreign credits into the economy of Independent Turkmenistan. In this direction the bank has acquired unique experience of cooperation and interaction with various foreign financial institutions: commercial and investment banks, export credit agencies and development banks. Since its existence the geography of the Banks cooperation has included the countries of North America, Europe and Asia, that allows the Bank to be in touch with different types of "credit culture" and learn the wired experience in the banking business.

In virtue of peculiarity, namely, the major part of the banks assets are presented in the form of long-term credits, financed for the account of foreign borrowings, directed to the implementation of the State Program for Economic Development of the country.

During the first years of Banks becoming, having developed cooperation with foreign banks and financial companies, investment agreements with German banks AKA an KFW, Turkish Eximbank, National Merkantile LTD, have been signed. The loan agreements with European Economic Community, the Export Development Bank of Iran, with the Bank of China; Austrian Raiffaizen Central Bank, with the Government of Pakistan on financing the food product purchase and consumer goods have been signed the same year. So, first operational years have already manifested serious intentions of the Bank to support accelerated development of young states economy. Further years of the Banks development facilitated progressing growth of foreign investment flows in Turkmenistans economy the enhancement of Turkmenvnesheconombanks activity directed to the integration of Turkmenistans economy in the world economy.

For the account of foreign loans, attracted during the first years of Turkmenvnesheconombanks activity the construction of International Air terminal in Ashgabat was completed; "Ak-Altyn" hotel was put into operation; macaroni factory, vegetable storage, baby food factory; technological equipment and agricultural machinery being delivered, plant on kaolin treatment and extension and reconstruction of telephone network being started up.

Later, the bank continued increasing the attraction of foreign investments in the sectors identified by the Government of Turkmenistan as priorities. The geography of credit flows was widened considerably during these years. The loans acquired from 14 countries of the world were presented in the Banks loan portfolio.

Among the largest projects being financed at that time for the account of foreign loans there were the following ones: The reconstruction of Turkmenbashy Refinery, the Cconstruction of gas-chemical treatment complex in Saman-Tepe, the lay on of Trance-Asian European line of optic-fiber communication.

It is necessary to point out that if during the first years consumer loans prevailed in the structure of the attracted foreign investments (on food purchase, medicines & str.), so since 1995 the loans of investment type have occupied the main part.

By entry 1997 the Bank had already justified itself as a reliable partner taking strong leading position in Turkmenistans banking system. At the same time, the analysis of 5-year activity of the Bank in correlation with the requirements of Turkmenistans state and economic system becoming, demanded the necessity, having determined the results, of fixing the mechanisms of achieving new marks. In 1997 the Medium-term concept of the banks development up to 2000 was adopted, but in 1998 the Strategic Plan of the Banks Development up to 2002, in which the strategy of strengthening the Banks position regarding the main specialization, was identified.

Turkmenistans President S.Turkmenbashis program "Strategy of socio-economic transformations in Turkmenistan for the period to 2010" adopted in 1999 and the objectives of the further development of the countrys economy identified in it, also demanded from the Bank to work out the long-term which was approved in 2001.

Implementing the tasks identified by the development plans the Bank considerably consolidated its positions in the most important sectors of market and kept the leading positions on the external economic market.

Since its formation Turkmenvnesheconombank has transformed into dynamically developing institution with assets and capital the amount of which exceeds greatly assets of the rest commercial banks in the country. As on 01.01.2007 the banks assets made up 5.960.530,6 mln. manats, the balance profit came up to 79.006,5 mln. manats, the Banks loan portfolio made up 3.970.162,7 mln manats. The Banks authorized capital, declared in the amount of 50 mln. doll. USd, reached 34.819.419,6 USD, in the national currency it was completed in the amount 1 bln manats. The source of the statutory capital formation is the profit remaining at the disposal of the bank according to the results of the reporting year.

The development strategy of Vnesheconombank is oriented, first of all, on the active work at attracting of foreign capital and its allocation in the priority sectors of the countrys economy, such as: oil and gas complex, agroindustrial complex, industrial and social infrastructure. All these industrial branches enter the number of the main sectoral users of the Banks credits. This sectoral structure precisely reflects the states investment priorities and testifies to their successful implementation. Following the Turkmenistan Presidents recommendations the import of capital goods and services is financed for the account of foreign loans, that serves the targets of strengthening the potential of national economy and the creation of preconditions for its stable development. The fact that for the last years there has been a stable growth of real GDP of the country, once again confirms a positive effect achieved due to the implementation of investment projects in economy including the attraction of foreign loans in the economy of Turkmenistan.

The Banks participation in financing the state investment programs resulted in the fact that the following large projects were put into operation:

In oil and gas industrythe projects totaled about 2,25 billion USD, were financed for the account of own and attracted funds. The largest projects: lubricant oil plant, catalic cracking and catalic reforming plants, polypropylene plant, a new plant for hydrofining of diesel fuel at Turkmenbashy refinery, work over and development of oil wells.

In agroindustrial complex within the implementation of the Turkmenistan Presidents programs "Grain" and "New Village", the delivery of modern agricultural machinery, the construction of flour-milling complexes, the soap plant in Turkmenabad and the reconstruction of Ashgabat dairy integrated plant, the construction of meat-dairy plant and hothouse production were financed for the account of the attracted foreign investments.

In transport and communication sphere an aerostation complex, a running way and traffic control system were built in Ashgabat airport named after Saparmurat Turkmenbashy, the fibre-optical communication line was laid on, the delivery of telephone stations were implemented, the construction of oil tanker and the modernization of locomotive depo in Ashgabat were carried out, the telephone network was widened in Ashgabat.

In power generation and chemical industry the reconstruction of Byuzmein CDES, the reconstruction of raw material base at Monjuklinskom iodine-bromine water field iodine plant in Balkanabad, the construction of the first stage of food salt plant in Karabogaz; the construction of sea-water distillation plant and drank water plant in Karabogaz were financed.

In textile industry - a new basis sector of Turkmenistan national economy - the construction the largest, in Turkmenistan textile complex in Ashgabat, the delivery of equipment for two silk factories in Ashgabat and Turkmenabat were financed.

In population social security sector the purchase of medicaments and medicines, ambulances, medical equipment, the construction of plants producing infusion solutions and ampoules and the construction of nephrological centre in Ashgabat, the reconstruction of "Archman" resort, the construction of three diagnostic centre in Ashgabat, Dashoguz and Mary were financed. At present the Bank participates in implementation of such large investment projects as the reconstruction of the sea port in Turkmenbashy, the delivery of rigs and hoist aggregates for oil sector, the further modernization and development of telecommunication infrastructure in Turkmenistan, the construction of hydrotherapeutic centre in Archman and in Yily Suv, the production of peachskin fabric in Ruhabat etrap, New Glass Complex construction, construction of new and rehabilitating the existing installations at the “Maryazot” industrial unit.

The Bank, when realizing its objectives and tasks, has relied upon the mutual beneficial strategic cooperation with the corporative customers, the basis of which makes up the partners from oil and gas sector, agriculture complex, energy complex, transportation and communication sector, production and social infrastructure. Besides, the Banks services are used by enterprises and firms with various terms of ownership represented large and medium business, joint ventures and foreign companies.The Banks policy in the sphere of corporative business development has been built considering the customers interests and directed to full and quality satisfaction of their needs.

The development of corporative business based on the interaction with large companies, allowed not only to increase the total scope of business but to diversify credit risks in different segments of economy.The Bank, striving for being an active partner of large enterprises and corporations, renders a wide range of consulting services regarding settlements under planning export/import transactions, profitable allocation of free funds and other financial issues for the purpose to worn them against possible miscalculation and in order to optimize financial transactions.

Together with the corporate client service, Turkmenvnesheconombank took active part in the development of the bank service market for natural persons. At present the Bank offers a wide range of retail financial services to natural persons, including complex settlement - cash service, deposit transactions, international remittances, plastic card service VISA and MILLICART, conversional transactions.

One of the priorities in the retail service expansion, is the transactions with plastic cards. The Bank, one of the first in the country, started up the works on introducing and developing the plastic cards. Having been since 1994 a member of VISA International the Bank started maintaining credit cards of foreign issuing banks. Going on the development of card business, Turkmenvnesheconombank made the issuance of plastic card MILLICART in 1996, allowing to carry on settlements in the national currency. In 1998 the Bank issued own plastic cards "VISA" (“Business”, “Classic”, “Electron”). In 2008 Banks started issue of “Visa Gold” plastic card.

In 2004 having worked out the medium term program of plastic card system development, the Bank started a new stage in the development of its card business the main targets of which are the quality increase and the expansion of services for cards users, the increase of non-cash settlements by means of plastic cards and also the achievement of compatibility of Turkmenvnesheconombanks plastic card system with the systems of other Banks in Turkmenistan.

Starting from 2006 the Bank commenced issuing the new card lines of Millicart – Altyn (Gold) and Kumush (Silver) with different services rendering depending on type of card. Simultaneously, the Bank developed and implemented a new service for cardholders such as opportunity to make overdraft on account.

In the area of cooperation with national export-import and export insurance agencies, the Bank, for a long period, has established business partnership relations with the Bank of International Cooperation of Japan, Eximbanks of China, Czechia, the USA, Turkey, Malaysia, such export insurance agencies as Hermes in Germany, Kofas in France and OND in Belgium. These relations allow Turkmenvnesheconombank to keep his leading position on the market of foreign investments being one of the main sources of funding its active transactions, especially financing of the projects in strategic important sectors of Turkmenistan economy.

In the field of cooperation with international banks and funds of development, the Bank pays great attention to IDB, OPEK Fund and others.

A long-term cooperation with IDB, at the same time being the Governors Office of IDB from Turkmenistan, with OPEK Fund and Saudi Development Fund, resulted in the completion of several socially significant projects. Besides, the agreement on financing some other social and infrastructural projects has been made, the assessment of credit extension to Turkmenvnesheconombank for financing the projects of medium and small business, is being carried on.

At present the Bank, enjoying the most extensive correspondent network and supporting international relations with more than 50 overseas banks from 20 countries, has the opportunity to effect various types of settlement transactions with any part of the world within the shortest period of time. The Bank constantly works on the optimization of the correspondent account system and on the search of new foreign partners rendering quality reliable and operative service. The established limits and credit lines allow the Bank and its customers to carry on the active transactions on the international markets.

One more important event in the Banks activity is its participation as a coordinating centre in the Interinstitutional Group, created by the decree of President Saparmurat Turkmenbashy for conferring a sovereign rating on Turkmenistan.

From the first days of its existence the Bank pays great attention to its informational and technical equipment, automation of banking services, to introduction of the latest banking technologies.

At the initial stage of the Banks establishment, the main directions in this sphere are the insurance of each working place with necessary computer technics, stage by stage automation of banking operations by acquiring the system applied programs and the installation of modern communication media.

Resolving the task of informational ensurance, in 1993 the Bank signed the agreement on the installation of the informational system, with the informational agency REUTERS, the system produced by the same company. So, the Bank obtained the access to a wide information about international markets which is very necessary for performing banking transactions on the external markets. Developing its fruitful cooperation with REUTERS, in 1994 the Bank installed the trade system DEALING that allowed to speed up the process of dealing, increase their safety and confidentiality. Through all following years the Bank constantly carried out the modernization of informational trade system in cooperation with REUTERS that allows the Bank to expand the range of the information received. Up to now Turkmenvnesheconombank is the only commercial bank of Turkmenistan, a user of this system that gives it a great advantage as the other banks of Turkmenistan.

Since 1994 all working places in the Head office, and since 1995 all the branches of the Bank were connected in a local computer network that allowed to hasten the service of customers and to handle documents, to create the Interbank bases of storage and collection of information, to facilitate the access to information for the workers.

In 1997 the Bank became a member of SWIFT and a user of Internet. The connection to the system of Interbank financial telecommunication allowed to speed up the implementation of international settlements, ensured better control and confidentiality.

The Bank considers the introduction of the most modern equipment and technology for the automation of banking transactions to be one of the priorities, in view of which during all the period of the Banks activity, the technique and computer software hake constantly been renewed and new program outputs have been introduced.

Within the implementation of the Banks informational-technological policy in 1998 the introduction of the new automation banking system was started that allowed to lead the Bank to a quality new level of banking technology development up to the world standard on the basis of "Korvus" companys working out. ABC "Altyn Uglamy" is designed on the principles of distributing the data processing and the architecture "client-server" and presents a user wide opportunities to conduct banking transactions, accounting, customer service, reporting, delivery of information to the Banks management. The software has been worked out within the framework of the unified technology and covers all the Banks transactions. Peculiarities of the system - a complex approach to the implementation of banking operations in automation regime, module structure, possibility of carrying on a transaction in real time regime, flexibility, ability to integrate with other financial enclosures, safety in operation. At present the Bank actively participates in introducing the unified automation banking system in the banks of Turkmenistan.

With purpose of increasing a quality of help-desk services Bank opened a web site within Internet. The site started its work in 2007 that considerably facilitated the access to the information about the Bank and services rendered for all stakeholders.

The Bank also actively participates in the formation of architecture appearance of the capital of independent neutral Turkmenistan c. Ashgabat. Within this program in 2004 the Bank put into operation the house with comfortable flats of improved lay-out, which were merchandized to the Banks employees under soft conditions. In 2005, by the celebration of the 14-year Independence of Turkmenistan the Bank put into operation a new administrative building constructed and equipped up to the modern standards of the banking business. At the present the Bank carries on the construction of more five houses with improved lay-out. Within the framework of Turkmenistan President’s urban planning program and on occasion of 16-th Turkmenistan Independence Anniversary Bank has constructed a park spreads on the bordering territory of 19.5 thousand square meters located on Garashsyzlyk shayoly near the Bank’s premises. The Bank also has a share in constructing the children garden for 160 places and Rest Center along the sea-shore Caspian Sea. On the eve of Turkmenistan National Flag Holiday Bank built a house of comfortable and modern apartments for its staff and capital residents.

The Banks successes - the successes of its employees. A true bank can not exist without strong and coordinated team. As of the first year of work the number of staff made up 18 persons. Along with the growth of transaction scope, new types of services, extension of branch network, its number has also grown. So, in five years the number of the Banks personnel exceeded 300 men.

When forming the staff potential the Banks leaders considered the necessity of attracting qualified specialists, having necessary knowledge and, moreover, having a complete command of foreign languages.

In 2000 the Bank carried on the significant work on optimizing the structure, the personnel number and the increase of its quality composition. It resulted in the approval of the Banks new structure and staff reduction. As of late 2004, for the purpose of increase of the Banks efficiency and reduction of operational costs, the Banks management decided to close regional branches of Turkmenvnesheconombank in 2005. At present the Banks staff number makes up 213 persons. The staff policy, being one of the components of the Banks successful activity, is based on the principles of professionalism, enthusiasm and high sense of responsibility of its employees. Well skilled professionals work in all units of the Bank.

The Banks staff policy counts on the young employees. The Bank has constant relations with the higher education institutions of Turkmenistan and sends its specialists to be trained within the country and abroad as well. The Banks leaders encourage the employees desire for professional growth. Everybody can realizes his potential and works creatively. Long and distinguished service of a number of the Banks employees has been rewarded with government decorations and honorary titles.

The Banks success testify, first of all, to the correctness of the general economic course of Turkmenistan Government, the essence of which consists in the implementation of verified and smooth reforms in Turkmenistan economy. At present Turkmenvnesheconombank continues occupying the leading positions in Turkmenistan, practically in all directions of its activity which is confirmed by the fact of conferring Vnesheconombank on the title "Best Bank of the Year in Turkmenistan" by the Banker, for the 11 time since 2001.. The Banks total financial indicators for the last fiscal year have demonstrated positive dynamics that allows to look ahead with optimism.

In prospective future the Bank’s activity will continue as per investment policy of state. Thus, in the nearest future the Bank will take an active participation in Program establishing the “Avaza” tourist zone near Caspian Sea initiated by Gurbanguly Berdymuhamedov President of Turkmenistan. The Bank’s participation in this project includes opening in beginning of 2008 the branch in region to present wide spectrum of bank services and financing the investment projects being realized in framework of maritime region’s development program. The Bank also considers measures on financing Turkmenistan Government’s program to develop country’s rural social infrastructure as well as new transport ways’ establishment and modernization.

As early, the Bank activity in future will realize according the approved strategic plans. In beginning of 2008 Bank accepted a new medium-term conception of its development based on principles of the President of Turkmenistan Gurbanguly Berdymuhamedov’s policy "New Revival Epoch". In 2011 "The development programme for the banking system in Turkmenistan for the period up to 2030", was adopted by the President of Turkmenistan. the programme specified the following concrete steps: to provide new types of banking operations, improve the management structure and business processes, further expand cooperation with major financial institutions, introduce new technology into the banking system, increase the capitalisation of banks of Turkmenistan, and further privatise banks, which will lead to the improvement and further integration of the banking system of Turkmenistan into the international financial system.

The Banks most important tasks in prospect will also be the strengthening of the Banks rating, its position among the most respectable financial institutions, the achievement of balance optimal structure, increase of its capital base, the consolidation of influence on the market of these or those services, the management structure improvement and technical support.