POPULAR INVESTMENST IN RUSSIA — MANUAL · • Money transfer system “Zolotaya Korona” • Money transfer system “Unistream” NS BANK IS A MEMBER: • Private clients insurance

POPULAR INVESTMENST IN RUSSIA — MANUAL

ANNUAL REPORT 2016

2016 brought change to investments. until recently, money got invested in business with to one goal – multiplying its amount. nowadays new strategy is TO SAVE MONEy.

try to save your capital, ns banK wILL hELP IN INcREASINg ITS AMOUNT!

Annual report 2016 3

POPULAR INVESTMENTS IN RUSSIA – MANUAL GUIDE

content

•Appeal of the president of the bank........................................................................4

•General information about the bank........................................................................9

•Participation in professional organizations and pay systems. License.....................................................................................................................10

•Key development index...........................................................................................14

•Bank management..................................................................................................15

•Client service network.............................................................................................16

•Corporate business.................................................................................................19

•Retail business.........................................................................................................20

•Credit policy.............................................................................................................22

•Financial markets operations.................................................................................26

•Risk management...................................................................................................27

• Information technologies ......................................................................................32

•Communication policy............................................................................................33

•Stuff management..................................................................................................35

• Independent auditor summary...............................................................................38

• ISFR standard financial report................................................................................42

•Accounting statement audition report...................................................................47

•RAS financial report................................................................................................53

•Bank Offices and additional braches addresses.................................................59

•Reference information............................................................................................60

yuri petrovPresident – NS Bank Chairman of the Board of Directors



president oF the banK appeal

Dear clients, partners and colleagues!

In 2016 NS BANK reinforced its positions on Russian market of bank services. As before, Bank payed a lot of attention to capital management and to risk coverage capital level maintenance.

Credit portfolio high quality levels were saved by credit policy realization and rigid requirements towards credit risk-management. Biggest share in credit portfolio has corporate credit part. It totally resembles Bank credit policy, which is oriented on satisfying corporate clients financial needs.

In 2016 Bank had conservative approach in regard in credit risks. It explains why borrowers with stable financial situation were preferred. It led to stable rate of credit portfolio. Bank had been developing and implementing new tools which could diagnose high risk factors. It allowed to have minimum of overdue indebtedness on granted loans in 2016.

As in previous years, Bank payed a lot of attention to servicing new customers. Corporate and private clients were provided with credit products. Close attention was payed to targeted use of granted loans.

Bank credited commercial, manufacturing, investment projects. Money was targeted on companies manufacturing processes, tax payments, salary payments and working capital funds increase.

In 2016 NS BANK was active in crediting client for the purpose of taking part in government contests and auction fields “SBERBANK-AST”, ”United electronic trading set” and others, also in open contests set by governmental and municipal customers. In 2016 Bank started realization in new field of crediting- Russian Federation subject crediting and municipal subject crediting.

In 2016, as in all previous years, corporate client service was the most important priority out all of the other NS BANK activities. NS BANK is interested in being partners with its clients, trying to offer different services, according to clients’ needs. Revising innovative decisions allows to improve corporate client service.

In 2016 NS BANK broadened private client bank services. New high-technology products and services were designed and implemented. Business process modernization and broadened list of services using information technologies, time management on putting through client operations decreased drastically.



The most important bank deposit advantages are – profitability and reliability. Forex and MIFs, shares and bonds can not guarantee the same level of profitability. Money put on bank deposits in amount up to 1,4 million is under state insurance.

Bank is a professional participant on securities market, and is also a member of Moscow trade center. Actively put through trading operations on both trading and no trading markets. Active Bank position helps to diversify income base, effectively manage liquidity and payment position, and also add new products to corporate and private client business portfolio.

Special attention is payed to liquidity and reliability of financial instruments. Traditional NS BANK securities portfolio is formed out of bonds, which are on a Bank of Russia pawnshop list. Core portfolio in 2016 formed sovereign Eurobonds of leading Russian issuers, which were underestimated due to various factors. Core share of the Bank portfolio are FBB and local bonds of big Russian companies.

Bank stuck to conservative position on the market in 2016, with the purpose of cutting down risks, increasing the amount of operations with The Bank of Russian and Moscow Trading Center.

Financial NS BANK activity in 2016, allows the Bank to remain reliable and stable credit-financial institution.

Our clients, shareholders and partners support, allowed the Bank to develop in dynamic way in 2016. We thank you for your trust and effective partnership. We are confident that we will achieve more in 2017.

President – NS Bank Chairman of the Board of Directors

Yuri Petrov



RUSSIAN RUBLE BANK DEPOSIT is the most popular way oF saving money.

the most important banK deposit advantages are – proFitability and reliability. Forex and miFs, shares and bonds can not guarantee the same level oF proFitability. money put on banK deposits in amount up to 1,4 MILLION is under state insurance.



general inFormation

JSC “NS BANK” was founded in 1994. The Bank of Russian general license №3124.NSBANKauditionisperformedaccordingtoRussianandinternationalfinancial standards report. Banks’ auditors are “ST-Audit” Ltd., Jsc “BDO Unicon”. NS BANK is a professional participant of stocks and bonds market, OJSC “Moscow trading center MICE-RTS” member.

NS BANK offers complete complex of modern bank services. Bank has 19 offices: 11 offices in Moscow and also offices in other cities: Saint-Petersburg, Velikiy Novgorod, Ivanovo, Tula, Dmitrov, Krasnogorsk, Kotelniki.

Among priorities of bank activities are: credit operations, bank guaranties, loans and guaranties for the participants of governmental auctions and tenders, currency exchange and securities operations.

In 2016 NS BANK reinforced its positions in national bank sector, maintained its reputation as of a reliable credit organization.

NS BANK is on the list of credit organizations which are allowed to provide bank guarantiestoFCS,FTSandIATAaccordingtoFederallaw№44-FL.NSBANKisthepartner of small business of Moscow crediting fund, also is the partner of Moscow area guarantee crediting small and middle business fund.

NS BANK is the member of “Russia” Association and RBA, also is a member of public organizations.

01.01.2017 Data



participation in proFessional organizations and pay systems. license

NS BANK IS THE MEMBER OF FOLLOWING PROFESSIONAL ORGANIZATIONS, ASSOCIATIONS AND PAY SYSTEMS:

•Russian Banks Association

•Russian regional banks association

•Moscow interbank currency exchange

•Moscow international currency exchange

•Financial managers guild

•The Kremlin suppliers guild

•Russian national association SWIFT

• International pay system VISA International

• International pay system MasterCard Worldwide

• International money transfer system Western Union

•Money transfer system “Zolotaya Korona”

•Money transfer system “Unistream”

NS BANK IS A MEMBER:

•Private clients insurance deposit system in Russian Federation banks

•Electronic bidding system (EBS)



NS BANK LICENCES

•TheBankofRussiangenerallicense№3124issued20.08.2003allowingbankoperations in Russian and international currency with the right of dealing with private clients’ deposits.

•PreciousmetalsBankoperationslicense(№3124issued20thofAugust2003)

•FinancialmarketsFederalservicelicenseallowingdealeractivities№045-07409-010000 issued 27th of January 2004

•FinancialmarketsFederalservicelicenseallowingbrokerageactivity№045-07407-100000 issued 27th of January 2004

•FinancialmarketsFederalserviceallowingsecuritiesmanagement№045-07413-001000 issued 27th of January 2004

•FinancialmarketsFederalserviceallowingdepositaryactivity№045-07421-000100 issued 30th of January 2004



cURRENcy is the second most popular investing way in russia.

people Keep their money in diFFerent currencys. it is possible to play on it but not always due to the Fact that cURRENcy DEPOSIT rates change all the time. it is crucial to monitor proFessional analytical Forecasts which would lead to understanding oF what is the next RIghT TAcTIc MOVE.



Key development index

In 01.01.2017 NS BANK assets evaluation is 32,6 billion rubles, overall credit bank portfolio was 11,4 billion rubles.

Credit bank portfolio has 10,3 billion rubles corporate clients credit share (90,6%) and 1,1, billion rubles private clients credit share. It totally resembles conservative bank policy which is focused on satisfying corporate client needs.

As a result of credit policy, as well as strict risk management demands, it was possible to save high credit portfolio quality of the Bank. Overdue indebtedness share is on a moderate level of 6,3 % according to 01.01.2017, in a meantime The Bank ensures that credit portfolio is on high levels.

Bonds have one of the most important places in the assets structure; it helps to optimize resource management, rate of return and liquidity of the Bank. Significant portfolio part compiles securities, which have high rates and on the pawnshop list of The Bank of Russia. NS BANK securities portfolio compiles moderate return rate while there is a high liquidity level, and stands for a security point for attracting new resources when there is liquidity deficit.

Diversified funding plays big role in reinforcing of The Bank positions. 0n the 01.01.2017 49% of funding resources were put towards private clients money, 22% - corporate clients capital, 13% - The Banks’ capital and 13% went towards other capitals (money market as well).

It needs to be mentioned that in 2016, NS BANK saved its’ client portfolio and successfully competed with other Russian banks on the deposit market. On the 01.01.2017 private client amount of money attracted was 15,8 billion rubles.

During the period from 01.01.2016 to 01.01.2017 The Bank had had enough liquidity, had been active on interbank market, had used different financial tools, including SWAP and repurchase agreements. Mandatory indexes of liquidity standards in 2016 had significant reserve relatively to minimal levels of The Bank of Russia.

In 2016 The Bank, as earlier, payed a lot of attention to capital management, and to maintaining high capital level for risks covering. Its own banks’ capital reached 6580 million rubles on the 01.01.2017 (RAS ). The Banks’ profit before tax was 95,3 million rubles in 2016.

NS BANK risk management allows the Bank to be reliable credit-financial institution, and to dynamically develop and continue to reinforce its positions on Russian bank service market.



banK management *

petrov yuri President – NS Bank Chairman of the Board of Directors

zentai chabaChairman of the Board

Kurtasova nadejdaFirst Deputy of the chairman of the board

bajenov nikolaiDeputy of the chairman of the board, board member

alexeeva svetlanaChief accountant, board member

troparevskiy vladimirDirector of the treasury, board member

ageev victorVice-president

augulis olgaVice-president

Kartaev sergeyVice-president

Klivec alexanderVice-president

Kazancev sergeyCouncelor of the President of the bank

* 01.06.2017 Data



client service networK

On the 01.01.2017 NS BANK network had 19 offices, which were located in: Moscow, Saint-Petersburg, Velikiy Novgorod, Ivanovo, Tula, Dmitrov, Kotelniki, Krasnogorsk.

Most of the offices service clients seven days a week. Private and corporate clients are offered broad spectrum of bank services and products.

In 2016 NS BANK offered its clients new services: “Online currency rate fixing”, profitable mortgage loan “Big apartment for a small mortgage”, New Years’ deposit offer “The summer is soon!’, new loan products for corporate clients “Cut the costs” and “Step forward to stability”. “Business development” loan for corporate clients conditions were improved. For private clients The Bank held several promotions, “Profitable card” with 2% cashback on school goods and purchases in hardware stores.

NS BANK has its own multifunctional Contact Center which services existing and potential clients. In 2016, the Contact Center processed over 41 thousand incoming inquires received by the hotline and the Bank’s official website. When working with incoming inquires, the Contact Center specialists advise clients on banking products and services, they carry out cross-sales and help to open deposit accounts through Internet-banking.

In order to increase loyalty and existing customers retention, as well as to expand the client base, the Contact Center stuff call private and corporate clients. Over 24 thousand outgoing calls were made with the offer of a vast product and bank services in 2016.



FOREX MARKETPLAcE is Quite popular in russia. 300-400% proFit per year on currency trading attracts many pepole.

people bet not only on dollars and euros, many preFer more exotic tools. swiss FranK or Japanese yen sometimes bring bigger proFits in comparison to traditional currencies.

this instrument is hard to worK with, that is way only PROFESSIONALS Know how to do it right.



corporate business

Servicing corporate clients in 2016, as in previous years, was one of the most prioritized business lines for NS BANK.

NS BANK is a universal financial body. The Bank renders a complex of financial services to all branches of the economy enterprises. The bank expands the volume of active operations demanded by clients on the credit market. Among them: lending electronic auctions participants to secure an application for participation in electronic trading; lending for executing works or rendering services on signed state contracts; lending to finance organizations’ current economic activities; crediting organizations for loan debts refinance in other banks; crediting of Russian Federation subjects and municipal unions; financing of capital investments in construction clients’ programs; The Bank guarantees for entering into and performing state contracts, tender guarantees, advance payment return guarantee, VAT refunds guarantee, and other guarantees.

Qualitative settlement and cash services in rubles and foreign currency is one of the most important NS BANK activities. Clients are provided with a wide range of services at affordable rates. NS BANK has an individual approach toward every client. In 2017, the Bank planned to develop new offers for cash management service portfolio for different customer categories.

NS BANK offers to open deposit accounts at a profitable rates or different time periods to its’ corporate clients. Also salary projects, corporate bank cards, acquiring, credit letters, encashment services are highly demanded.

Due to the high level of an unauthorized access to personal data, Bank’s clients have an opportunity to make transactions via safe way through DBS “BS-CLIENT”. NS BANK activity is under FSS of Russia license of information security.

NS BANK has high interest in developing partnership with its’ clients, aims to offer various services according to their needs. The Bank is looking for innovative solutions on financial markets and implements them, which allow to ease and improve work with corporate clients.



retail business

In 2016, NS BANK continued to broaden bank services spectrum for private clients. New innovative products were designed and implemented, service time was cut down and client service level reached higher levels.

DEPOSITS

Considering the deposits of the population as one of the main resource base building source, in 2016, NS BANK continued to actively work in the deposit market, pursuing a restrained interest policy.

As the situation on the financial market got stable, The Bank revise its interest rates and adjusted minimum amounts for the current deposits, developed seasonal deposit offers for its’ clients, as well as new products were offered to make it more profitable to allocate funds for future and keep them available. Deposit product promotions took place. Along with this, prolongation conditions and early termination for more profitable had been changed and for risk-free conditions for The Bank.

Customers’ accounts balances – individuals at the end of the year estimated 15,8 billion rubles.

PAY SYSTEMS

The Bank continued active partnership with international pay systems “Zolotaya Korona”, “Western Union”, “UNISTREAM”. In 2016 The Bank worked on effectiveness increase and service optimization within money transfer services.

Taking in consideration high population interest towards this bank service (money transfer in foreign currency and rubles), The Bank aims to offer its’ clients modern and high quality money transfer services.

By the end of 2016, The Bank carried out more than 149 thousand outgoing money transfers and almost 43 thousand incoming transfers. Whole amount of money was 6,1 billion rubles in 2016.



BANK CARDS

NS BANK activity in the market of bank cards in 2016 was characterized by the following indicators. There are more than 25 thousand cards on the market. The volume of transactions made by cardholders amounted to about 2,5 billion rubles. On 01.01.2017, The Bank installed 40 ATMs and 143 POS- terminals. The Bank has plans on expanding ATM network and service points in Moscow and the Moscow Region and other regions I Russia.

The Bank is the member of pay system Association Visa Int. and MasterCard WW. Gold and Platinum cardholders automatically receive medical insurance 100 and 150 thousand dollars worth, and get access to concierge-service Aspire LifeStyles.



credit policy

In 2016, The Bank stood by conservative control of risk-credit, giving preference to clients with stable financial situation. Therefore, amount of the credit portfolio remained at the same level.

The Bank constantly had been developing and implementing early diagnosis tools of high credit risks, it allowed to bring to minimum overdue indebtedness issued in 2016.

In general the work carried out has improved the quality of the loan portfolio by reducing the old problem debts and issuing new loan products in accordance with more scrutinized risk assessment standards. At the of 2016, overdue loans amounted to 6,3% of the loan portfolio.

The bank, as in all previous years, paid close attention to attracting new customers. Load products were provided to both corporate and private customers. Crediting was carried out on a contractual basis with observance of basic principals of crediting; urgency, ability to pay, repayment, security of credits. Particular attention was paid to the targeted use of credit facilities. The Bank diversified its’ sales channels. Concentrated its’ attention mainly on corporate clients. Target audience was identified as a client of credit products offered by The Bank. Potential borrowers base was formed, it will lead to high sales level in 2017.

Loans and bank guarantees are given to both, customers who have settlement accounts in The Bank and organizations without current account. Loans are issued for the purposes stipulated by the charter documents of the borrower, but on condition that the return of the provided resources will be carried out at the expense of cash flows generated from the current production and financial activities of the borrower.

In 2016, The Bank stand by the principal of tight partnership with the clients.



This purpose led to:

•Attracting of corporate clients from various economy branches, with the aim of maximum diversified credit portfolio

• Increasing the security of loan portfolio, attracting the most liquid collateral

•Finding out all the information about the client and its’ business activity

•Regular check of clients’ corporate and financial activity

•Development and implementation of personal approach for every client during economical crisis

•Comfortable and high quality service

The Bank credited financial activities of commercial, manufacturing and investment projects. Money were credited for commercial activities of enterprises, salary payments, tax payments, circulation assets replenishment.

In 2016, NS BANK continued on crediting clients who took part in state tenders and auctions of “SBERBANK-AST”, “United electronic trade market” and other markets, also in open tenders held by state and municipal customers. The Bank issued guarantees on auctions and tenders participation for keeping to the commitment of the state and municipal contracts, as well as for advance installment returns, VAT returns guarantee, Federal Alcohol Monitoring Service guarantees and others.

As always, one of the key the key banks’ activities is issuing loans to enterprises. The Bank credits companies of different economic branches, who has own capital and liquid assets. The Bank gives out loans to enterprises who have their own capital, who own liquid assets. As a collateral for loans, The Bank accepted highly liquid assets both borrowers and third parties, real estate, vehicles, fixed assets, right of claim under state contracts, bail of business owners.

The Ns Bank is the partner of the Moscow Small Business Lending Association, as well as the Moscow Regional Guarantee Fund for Facilitating Crediting of Small and Medium sized Business. In this regard, The Bank accepts, as collateral, the above mentioned funds under loan agreements.



NS BANK has an individual approach with every client, The Bank makes fast decisions on the matter of crediting a client and quickly issues a loan.

In 2016 NS BANK started working in a new field – crediting of Russian Federation subjects and municipal units.

The line of credit products for clients includes: one-time loans, loans in the form of a credit line with one establishment of a supply limit, a debt limit, overdrafts, provision of bank guarantees for participation in electronic auctions, performance of contractual obligations, return of advance payment, guarantee to the Federal Customs Service, guarantees in favor of the Federal Service for Alcohol Market Regulation and other guarantees.

In 2016 line of credit products had been expanded. A new product had been implemented “Cut the costs” – crediting was possible if an organization is of a high credit quality for future refinance of a debt in other banks. This program allowed to expand client quantity.

Business relation development and strengthening of ties with enterprises of various braches of economy made it possible to maintain a credit portfolio diversified by market segments, terms and types of collateral.

In 2016, bank prioritized activity remained providing bank guarantees to principals who were executing state and municipal contracts. Banks’ scoring product “express-guarantees” eases the procedure of issuing small loans and makes it possible to perform within days.

NS BANK is on the list of banks who meet the requirements of Federal Law from 05.04.2013№44-FL«Aboutcontractsysteminpurchasesphereofgoods,servicesfor state and municipal needs”, in regard of giving bank guarantees to state contracts.

The Bank adapted existing credit products to the federal law requirements, developed and implemented documents’ forms. Bank Service department monitors clients contracts fulfillment which are under bank guarantees, as well targeted money spending, which had been received from state customers, is under control as well.



In accordance with the approaches defined by this law, the Bank implemented procedures for monitoring the execution of state and municipal contracts, which reduced the risks of misuse of budgetary funds and banks’ risks associated with non-fulfillment of contracts.

In 2016, The Bank paid special attention to mortgage products –targeted loans for the purchase of housing in the primary and secondary markets against secured property (real estate rights).

To meet the market demands, The Bank lowed the age requirements of the consumer, and also decreased its’ interest on the newly issued mortgages.

In December 2016, a unique loan program “Big apartment for a small mortgage” was approved and put into operation - long-term loans to individuals to purchase residential real estate in a new developments against secured property (real estate rights). The credit terms provide for a grace period for loans (up to the expected completion date) at a low interest rate. The program is in great demand among potential property buyers.

At the end of 2016 credit program “NS-Partner 2” conditions were improved.

In 2017 it is planned to pay special attention to further broadening of credit services for banks’ clients.



Financial marKets operations

The Bank is a professional member of the securities market, member of Moscow Trade Market, is actively trading on both stock exchange market and non-stock exchange market. Banks active position helps to diversify profit base, effectively manage liquidity and pay position, and also add new products to services offered to corporate and private clients.

Securities portfolio is the second most profitable source after credit portfolio for The Bank. Special attention is being payed to reliability and liquidity of financial tools. Traditionally, securities NS BANK portfolio is formed of bonds, which are on the pawnshop list of the Bank of Russia. In 2016, the core of the portfolio was sovereign Eurobonds, and Eurobonds of leading Russian issuers, which were underestimated. The biggest share of banks portfolio have federal bonds and big companies bonds. The amount of money invested in securities in 2016 was around 11 billion rubles.

Last year, the bank in the money market adhered to a conservative work strategy, significantly increasing the share of operations with the Bank of Russia and Moscow Stock Exchange. “Currency swap” transaction volume on the Moscow stock exchange increased more than 3,5 times compared to 2015, repo operations with the Central Counterparty grew by 40%, and MBC operations were performed exclusively with the Bank of Russia.

A wide range of counterparties with which agreements on cooperation in the money market are concluded, as well as on conducting trading operations in the securities markets and derivative financial instruments allow The Bank to manage its own securities portfolio, hedge emerging risks and regulate its liquidity. In this way, an optimal balance between risk and return is achieved , which also allows arbitrage operations in order to generate additional income.

The Bank is the client of the biggest information agencies, Bloomberg and Thomson Reuters, that allows to monitor up to date market information.

NS BANK provides wide variety of services: broker services, including internet-trading with multifunctional front-office system broker service on financial markets, and operations within trust management service.

The Banks’ professional stuff has a lot of experience working on financial markets, guarantees high quality service and individual approach.



risK management

Risk management plays an important role in NS BANK. Risk management is understood as an activity for identification, analysis, acceptance, restriction, monitoring and control of banking risks. Internal regulatory documents are the basis on which risk management is implemented in The Bank, the main one of which is the “Risk and Capital Management Strategy”. This normative document was developed and approved by The NS BANK in 2016, on the basis of requirements and recommendations of the Bank of Russia for internal procedures for assessing capital adequacy.

NS BANK performs system risk-oriented approach to credit organization management. All risk-management procedures are integrated in every business-process, starting from strategic, medium-term, operative management, continuing with the restriction policy on risk minimization along with regular bank procedures, finishing with control check of the results of NS BANK.

According to the Risk and Capital Management Strategy, the risk management in The Bank is implemented on the basis of the principles of consistency, timeliness, proportionality (the scale and development of specific banking business and the NS BANK as a whole), priority integrity (with all system elements), effectiveness and balance, as well as regulation and separation of functions. At the same time, system participants responsible for analysis and risk control are independent from the departments who are directly engaged in banking operations.

The Bank has a board of participants who have competences and authorities in Risk Management and Capital System. These include collegial bodies (The Board of Directors, The Management Board, The Credit Committee, The Limit, The Tariff and other committees), officials (The Chairman of the Management Board, The Securities Market Professional Controller, etc.), and the unit (Risk Management Service, Internal Audit Service, Internal Control Service, Financial Monitoring and Currency Control Department and others). The competence, authority and functions of these units are clearly described.

A very important place in 2016 took planning, monitoring and control procedures of capital sufficiency. Despite the fact the Bank of Russia lowered its’ requirements regarding capital sufficiency, NS BANK capital sufficiency levels increased. Banks’ own capital rose from 16,13% up to 16, 95%. In a meantime basic and main capital



sufficiency rose from 10,32% up to 10,82%. It clearly indicated that NS BANK not only meets BASIL-III strict requirements, but also shows high business potential.

NS BANK “Risk management and capital strategy” points out banks activity risks, identified new risk identification system. The Bank revealed that most significant risks are credit, market, operational, liquidity, concentrate risks.

The most important financial stability factor is conservative credit policy and risk management.

In 2016, continuing geopolitical confrontation and low world oil process, economical crisis in the country continued. In this situation, The Bank gave priority to transactions with a low level of risk, reduced the concentration of risk, carried out a set of measures to reduce possible losses from the implementation of credit risk, and formed the necessary reserves to cover possible losses from the implementation of risks. In order to monitor the state of credit risks, the Banks’ Management Board regularly reviewed management reporting that provides information on the aggregate amount of credit risk, the structure and quality of the portfolio of assets, and the amount of bad debts.

Liquide risk was always revised as one of the most important in 2016 for NS BANK. The Bank held regular monitoring of liquidity levels on short-term, medium-term and long-term horizon. In 2016 The Bank provided high levels of instantaneous and current liquidity, which was significantly higher than the one pointed out in normative documents of The Bank of Russia. By the end of the year following indexes had been reached: H2-172,45%, H3-261,72% AND H4-17,12%. NS BANK continued on improving liquidity risk management procedure, as well as current pay position management, short-term forecasts, compulsory normative control, short-term liquidity estimation, liquidity deficit, liquidity gap (GAP analysis), carried out stress-test.

Although concentration risk always drew a lot of attention, The Bank payed more attention to that risk in 2016. The Bank continued to improve limit policy in relation to borrowers, securities issuers and others, The Board of Directors and other collegial management bodies developed an additional tool set, which allowed to limit and control concentration risk acceptance of NS BANK on a regular basis. In 2016, there were no exceeding of the limits. In favor of existing concentration risk management system speaks the fact that H6 (18,43%) and H7 (293,93%) normative indexes, were at a comfortable levels.



The Bank held constant monitoring of market, operational, percentage, reputational and strategic risks.

The system of limits continues to improve, aimed at preventing The Bank from taking excessive risks. In particular, in accordance with the “Risk and Capital Management Strategy”, the Bank has approved and monitored indicators that characterize capital adequacy and indicators of propensity to particularly significant risks. By establishing the target and signal values of these indicators in the National Bank, the risk-appetite is effectively limited.

Throughout 2016, The Bank conducted quarterly stress testing aimed at ensuring the stable position of the National Bank, protecting the interests of its clients and creditors by assessing the potential impact on the financial condition of the Bank of a number of specified changes in risk factors that correspond to exceptional but probable events. With the help of sensitivity analysis and scenario analysis, the ability of the Bank’s capital and liquidity to compensate for possible major losses or fluctuations in the market situation is assessed and a set of actions to be taken by the Bank to reduce the level of risks and preserve capital is determined. The results of the stress testing conducted in 2016 were found to be satisfactory. That is the Banks’ financial position is not significantly worsened in case of implementing stressful scenarios. Results of stress testing were considered by the Board of Directors of the National Bank, which recognized the measures taken to limit and minimize risks effective.

All in all risk management system which took place in 2016, had been adequate to the scale and complication of the business, it allowed to allocate, estimate and control existing and potential risks, compensate losses which happened due to risks realization, implement operational complex which is aimed on saving of financial stability of NS BANK. Risk management improvement will take place in 2017.



gOLD, cOINS AND INgOTS are also Quite poular in russia.

these instruments are chosen by those who doesn’t liKe to risK. golden ingots and coins are QUIET LIQUID, it is easy to purchase and not hard to sell. the only Question is – at what price.

investors create their personal gold reserve, in case oF global cataclysms precious metals become a good deal.



inFormation technologies

In 2016 NS BANK IT-technology developed within banks’ strategy. It was aimed at development and improvement of existing IT-platforms according to business requirements (better quality of service and cut down on time per service), and also for new innovative bank products and services.

Automated bank system it was possible to implement new functions and broaden existing opportunities. Product line had become wider: ”deposits”, “Compulsory accountability”, “Interactions with state bodies”. New product “Letter of credit” had been presented, it led to fast high quality client service.

AccordingtoFederalLaw№209-FL,TheBankamongonethefirstfinancialstructure has been lined up to required technical and socially important information space – Informational Housing and Utilities State System, realized operational forwarding of all the information needed.

The Bank continues to work on high quality infrastructure net maintenance. New server equipment has been lined up, which allows to reach high performance and safety of data processing.

Measures have been taken to improve the fault tolerance of hardware and software systems that support the functioning of the IT infrastructure. The data back up system has been modernized. To achieve the smooth operation of all IT systems, The Bank deployed a system for monitoring the operation of all customer service points in real time.

Constant attention was drawn to safety. All third party manufacturers’ equipment was actualized to systems used in The Bank. Also ABS migrated to Oracle 12c. Invasion control systems and internet data control systems were implemented in accordance with allowed applications and URL.



communication policy

Communication policy – is a system of different tools which allows the Bank to be in touch with potential clients, for further intention to make them purchase bank services.

The main goals of the communication policy are raise of awareness of the brand, image positioning, advertising support and product and services promotions, guaranteed provision of the Bank’s business lines with a flow of incoming customer appeals, an increase in the number of new potential customers and loyal clients.

Communication policy tools are direct marketing, advertising, public relations and sales stimulation. Each part of this system plays great role in effectiveness of the Banks’ services and products on the market.

In 2016 as earlier, the main goal of communicational policy remained image forming, as of a reliable, effective, highly technological credit-financial institution, creation and maintenance of positive information field around the Banks’ activities. The Bank set certain goals, it had to be in trend, be aware of what is happening on the market and be able to led activities in accordance with its strategic business approach.

PR-activity remained to be pro-active, for NS BANK brand promotion. Different internet communication tools were used (Internet mass media, social nets, forums, blogs). These activities allowed reaching for target audience and making the brand more recognizable.

Traditional mass media helped to spread up to date, high quality information about the Bank.

Integrated marketing communication concept which is used in NS BANK, helps to coordinate all the informational communication channels which leads to forming persuasive and clear image of commercial bank and its’ services.

Integrated marketing communications let to choose the best communicational tools and guarantee product and services sales.



In 2016, several advertising campaigns took place, which helped to present on the market new services and products for both corporate and private clients.

It is important to mention that advertising campaign is one of the most important communicational tools. It helps to build demand on certain bank products and services, actively influences on its transformation and helps to achieve good results.

Advertising requires speed and quality, color, brightness, it must be remembered by the slogan, which is the idea of promoting the corresponding product (service), or positioning the Bank as a whole. Important conditions for effective influence of advertising campaigns on target customers are: clear targeting of advertising, their visibility, emphasis on the clients emotions. All these moments were taken into account in the process of advertising.

In 2017, NS BANK will continue its work on further reinforcement of corporate reputation of the Bank. Will form positive image which is adequate to advertising and PR support of banks’ activity.



stuFF management

The HR policy is an important factor in bringing to life the interests of clients, shareholders, employees, it is built on the consolidation of the achieved results and further improvement of work with personnel. The main attention in the work with personnel is paid to the construction of an integrated personnel management system, which ensure the qualitative performance of current tasks and creates a foundation for the implementation of Banks’ strategic goals determined by shareholders and the Board of Directors. Personnel policy is a set of principles, forms and methods, organizational mechanisms aimed at developing the staff potential of the Bank and creating a qualified cohesive team that is able to respond in a timely and effective manner to the changing demands of the market.

Today, building of an effective personnel management system plays a crucial role in terms of companies’ competitiveness. For over than 20 years, The Bank created a strong team of professionals, who are able to meet any task.

It is evident, that professional stuff plays the key role when it comes to bringing to life all the potential which The Bank has. Personnel management system aims to save all the professionals within the company, for further usage of its resources.

Training is the key component of staff development and contributes to strengthening the Bank’s image in the labor market. The Bank applies a comprehensive training approach, which is based on the principal of compliance with the position held and the provision of continuing professional or career growth. The existing system of labor remuneration is based upon the principles of a comprehensive accounting of the personal contribution and the level of professional competencies of each employee. The system of motivation is constantly developing and improving. Its main task is to stimulate employees to achieve high individual performance results in accordance with the criteria of effectiveness and professionalism determined for each post.

The Bank has its own socially oriented programs, which reinforce traditions and values of working professional team. Every year “The best in profession” contest takes place. By the end of each year the best workers receive presents, thanking letters. The Bank Management stimulates and maintains high level of client service and saves corporate culture. The Bank participates in economical and social infrastructure development on the territories of its presence.



UNIT TRUST FUND INVESTMENTS, or passing on oF the money For trust management – are very popular ways oF investment.

last Few years showed that conservative bond unit trust Funds are Quite proFitable in comparisent with other instruments, which are able TO BRINg 30% PROFIT.



independent auditor summary Jsc “bdo unicon” Financial report

AuDITED BODY

JSC “NS BANK”

Registered: MinistryofRussianFederationTaxService№50inMoscowgeneralstate registration number 1027739198200

Address: 109004, Russia, Moscow, Dobrovolcheskay street 20 building 2

AuDITOR

JSC “BDO uNICON”

Registered: MinistryofRussianFederationTaxService№26southadministrativearea of Moscow general registration number 1037729271701

Address: 11758, Russia, Moscow, Varshavskoe shosse 125 building 1, section 11

JSC “BDO UNICON” is the member of professional auditor unit of self-regulating organization “Russian Auditor Unit”, main registration number in a state auditor registry 11603059593.



REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of NS Bank, which comprise the statement of financial position as at 31 December 2016, and the statement of comprehensive income, statement of cash flows and statement of changes in equity for the year then ended, and a summary of significant accounting policies and other explanatory information.

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

AuDITOR’S RESPONSIBILITY

Our responsibility is to express an opinion about the reliability of the annual report on the basis of the carried audit. We have carried out the audit in accordance with the federal law “On auditing”, federal and corporate standards of auditing. These standards require observance of applicable ethical norms as well as planning and carrying out the audit in the way enough to receive sufficient confidence that the annual report contains no essential distortions. The audit included carrying out the auditing procedures, aimed at the reception of auditor proofs, which could confirm numerical indicators in the annual report and disclosure of the information in it.

The choice of auditing procedures is a subject of our judgment, which is based on the evaluation of the risk of the significant misstatements admitted due to improper actions or errors. In the course of the evaluation of the given risk we considered the system of internal control, which provides guidelines for reliable composition of the annual report in order to choose proper auditing procedures. The audit also included the evaluation of appropriate character of the registration policy in use and validity of the evaluation indicators, received by the management of the audited entity as well as the evaluation of the process of financial reporting on the whole. We believe that the auditing we have carried out presents reasonable grounds to express our opinion on the reliability of the annual report.



An audit includes the appropriateness of accounting policies evaluation used and the reasonableness of the estimates made by the management of the entity being audited, and evaluating the overall presentation of the financial statements.

We assume that received data acquired during audit check gives enough evidence that the financial report is right.

OPINION

In our opinion, the financial statements present fairly, in all material respects, the financial position of JSC “NS BANK” as of December 31 2016, the results of its financial and economic activities and cash flows for 2016 in accordance with international financial standards Reporting and with the requirements of the legislation of the Russian Federation in terms of preparing financial statements.

According to the item 42 of federAl lAw on the 02.12.1990 №395-1 “ABOuT BANKS AND BANK ACTIvITY” SuMMARY

The NS BANK management is responsible for sticking to compulsory normative documents pointed by The Bank of Russia, also for inner control and risk management correspondence with requirements issued by The Bank of Russia.

Accordingtotheitem42ofFederalLawonthe02.12.1990№395-1“Aboutbanksand bank activity” in 2016 we held audit check:

• The Bank of Russia requirements completion on the 1st of January 2017

• Correspondence between inner control and risk management of the Bank and requirements issued by The Bank of Russia

This verification was limited to such procedures selected on the basis of our judgement, such as requests, analysis, examination of documents, comparison of requirements, procedures approved by the Bank with the requirements of the Bank of Russia, as well as recalculation and comparison of numeric indicators and other information.



As a result of our audit check the following is established:

1. The Bank of Russia requirements:

• Compulsory normative established by the Bank of Russia on the 1st of January 2017 were within limits, established by the Bank of Russia.

We did not conduct any procedures with respect to the Banks’ accounting data, apart from procedures that we deemed necessary for the purpose of expressing an opinion on whether the financial statements of the Bank reflect in all material respects, the financial position of JSC “NS BANK” in respect of 31st of December 2016, the results of its financial and business operations and cash flows for 2016 in accordance with international financial reporting standards and with the requirements of the legislation of the Russian Federation in preparation of financial statements.

2. Correspondence between inner control systems of risk management and the requirements of the Bank of Russia:

• In accordance with the requirements and recommendations of the Bank of Russia 31st of December 2016, the Banks’ internal audit service is subordinated to the Board of Directors, the risk management units of the Bank were not subordinated and did not report to the subdivisions accepting the respective risks, internal audit and risk management unit of the Bank meet the requirements established by the Bank of Russia.

• Internal bank documents qualified by the 31st of December 2016, setting methods of allocating credit, operational, market, percentage, legal, liquidity loss, reputation loss risks, stress-testing are approved by Bank Management bodies according to the Bank of Russia requirements.

• As at the 31st of December 206, the Banks’ internal documents established a reporting system for significant credit, operational, market, legal, liquidity and business risks of the Bank, as well as the Banks’ own funds

• The frequency and consistency of reports prepared by the Banks risk management departments and the Banks internal audit service during 2016 on management of credit, operational, market, interest, legal risks, liquidity risk and the risk of loss of the business reputation, internal documents of the bank. These reports include the results of monitoring by risk management units and internal audit service in assessing the effectiveness of the Banks relevant methodologies, as well as recommendations for their improvement.



• As of December 31 2016, the authority of the Board of Directors and its executive management units includes control over the Banks; compliance with the Banks’ internal documents on the limits of risks and sufficiency of capital. In order to monitor the effectiveness of the Bank’s risk management procedures and the consistency of their application in 2016, the Board of Directors and its executive management bodies periodically discussed reports prepared by the risk management units of the Bank and the internal audit service, considered the proposed measures on the matter of shortcomings elimination.

• Procedures in regard of inner control and risk management systems of the Bank were held only with a purpose of checking on whether the Bank of Russia requirements are met.

v. pogulyev JSC “BDO UNICON” General Director

30th of May 2017



2016 2015

I. ACTIVES

II. RESPONSIBILITIES

OVERALL ASSETS 33 237 929 35 543 725

Cash and its equivalents

Compulsory reserve accounts in the Bank of Russia

1 370 923

172 121

4 289 866

177 825Assets in other banks

Client credits

3 279 199

11 429 867

658 766

10 950 667Financial assets ready to be sold

Investments for repayment

6 753 347

3 206 985

8 169 234

4 979 571Long-term assets ready to be sold

Main capital

12 751

1 501 343

-

1 361 585Others 5 438 722 4 954 544Current tax assets - 1 667Postponed tax assets 72 671 -

Assets in other banks 4 241 648 2 267 611

Client assets 20 924 481 25 774 855Issued debt securities 190 914 82 110Other loan assets 2 275 000 2 275 000Other responsibilities 442 400 393 938Current tax responsibilities 521 -Postponed tax responsibilities - 185 058

OVERALL RESPONSIBILITIES 28 074 964 30 978 572

III. CAPITAL

OVERALL CAPITAL 5 162 965 4 565 153

Authorized capital

Emission approach

1 953 158

26

1 953 158

26Fixed assets revaluation fundAssets ready to be sold revaluation fund

478 69587 227

395 43156 402

Undistributed profits 2 643 859 2 160 136

OVERALL RESPONSIBILITIES AND CAPITAL 33 237 929 35 543 725

isFr Financial report

FINANCIAL POSITION REPORT 31.12.2016 (thoUSAnd rUBleS)

30th of May 2017

alexeeva s. Chief Accountant

zentai ch.The Board Chairman



isFr Financial report

INCOME AND LOSSES AND OTHER TOTAL INCOME REPORT TO the end of 31.12.2016 (thoUSAnd rUBleS)

2016 2015

Interest income

Interest expense

2 527 054

(1 984 532)

3 338 113

(2 601 565)

Provision for funds depreciation in other banks and credit clients (1 930 237) (159 825)

Income after expenses from operations with financial assets at fair value through profit and loss 211 060 (31 662)

Income after expenses deduction on the transitions with financial assets available for sale 118 155 33 631

Income after expenses deduction on operations with foreign currencies and precious metals 1 546 727 (212 905)

Income after expenses deduction from foreign currencies reappraisal and precious metals (1 079 664) 644 192

Income after expenses deduction of investments held for redemption 2 018 -

Commission income 366 295 359 140

Commission expanses (27 679) (37 768)

Reserve for depreciation of investments held for redemption 53 465 (53 465)

Provision for losses on other assets and credit related commitments (44 276) (238 118)

Revenue from the sale of loans and rights under investment contracts 825 002 -

Revenues from redemption and purchase and sale of units, real estate and property rights under investment agreements 1 045 805 63 573

Other operational income 135 673 207 907

NET INTEREST INCOME 542 522 736 548

OPERATIONAL INCOME 1 764 866 1 311 248

NET INCOME AFTER RESERVE ACCUMULATION FOR DEPRECIATION FUNDS IN OTHER BANKS AND CREDIT CLIENTS

(1 387 715) 576 723



2016 2015

Operational expenses (1 333 220) (1 242 562)

Tax expenses 82 474 (13 376)

Effect of revaluation of fixed assets 108 112 51 568

Income tax not the subject to following reclassification (21 622) (10 314)

Effect from the revaluation of financial assets available for sale 38 531 571 304

Income tax relating to items subject to subsequent reclassification (7 706) (114 261)

INCOME BEFORE TAX 431 646 68 686

NET PROFIT

ARTICLES NOT SUBJECT TO FOLLOWING RECLASSIFICATION FOR PROFIT OR DAMAGES

SUBJECTS TO FOLLOWING RECLASSIFICATION FOR PROFIT OR DAMAGES

514 120 55 310

AFTER TAX NET PROFIT 117 315 498 297

NET PROFIT FOR PERIOD 631 435 553 607

OTHER NET INTEREST INCOMEIV.

30th of May 2017

alexeeva s. Chief Accountant

zentai ch.The Board Chairman



PROPERRTy is a traditional investment tool.

sQuare meters bring stable income by letting. commercial property investments are very popular today. coomercial let For a shop, caFÉ is more proFitable than house let. ThIS IS A cONSERVATIVE APPROAch OF SAVINg AND EARNINg ONES SAVINgS.



audition summary on annual accountant report oF Jsc “ns banK”in 2016

To shareholders of JSC “NS BANK”

AuDITIONED BODY

Name: JSC “NS BANK”General registration number: GSRN 1027739198299 17.09.2002; The Bank of Russia REGISTRATION11.10.1994№3124Address: 109004 Moscow Dobrovolcheskaya street 20 building 2

AuDITOR

Name: LLC ST-AuditGeneral registration number: 1047796366705Address: 115211 Moscow Kashirskoe shosse 59-1Mail address: 115211 Moscow Kashirskoe shosse 59 mail unit 74

Member of self-regulatory Organization of Auditors “Commonwealth”, entered in the state register of self-regulatory organizations of auditors by order of the Ministry of FinanceofTheRussianFederation№721of30.12.2009.Number in the register of auditors and audit organizations of self-regulatory organizations of auditors association “Commonwealth”: 11606057684 of 11.15.2016



We have audited the attached annual financial statements of JSC NS Bank (hereinafter - the audited entity, the Bank), compiled in accordance with the Russian Accounting Standards and consisting of:

• The balance sheet (published form 0409806) as at 1st January 2017

• Report on financial results (published form 0409807) for 2016

• The report on the level of capital adequacy for covering risks

• Reserve for possible losses on loans and other assets (public form 0409808) as of January 1st 2017

• Information on mandatory ratios, the index of financial market and the standard of short-term liquidity (published form 0409813) as of January 1st 2017

• Cash flow statement (published form 0409814) for 2016

• Explanatory information to the annual financial statements for 2016

AuDITED BODY ACCOuNTANT REPORT RESPONSIBILITY

The management of the audited entity is responsible for drawing up and the reliability of these annual financial statements in accordance with the Russian rules for the preparation of financial statements. Organizations and for the internal control system, the necessary preparation of annual financial statements that do not contain significant distortions due to fraud or error.

AuDITOR RESPONSIBILITY

Our responsibility is to express an opinion on the annual financial statements on the basis of our audit. We conducted an audit in accordance with federal standards-auditing activities. These standards require compliance applicable ethical standards, as well as planning and conducting audit in such way as to obtain sufficient confidence that, the annual financial statements do not contain material distortions.



The audit included conducting audit procedures aimed at semi-audit evidence supporting numerical indicators in the annual financial statements and disclosure of information therein. Selection of audit procedures is the subject of our judgment, which is based on the assessment of the risk of material misstatement due to dishonest actions or mistakes. In the process of assessing this risk we have reviewed the internal control system that provides reliable financial statements in order to select the appropriate conditions for setting audit procedures.

The audit also included an assessment of the appropriate nature of the accounting policy and the validity of the estimates obtained by the audited entity, as well as an assessment of the presentation of the annual accounting report in general.

We believe that the audit evidence obtained during the audit gives sufficient grounds for expressing an opinion on the authenticity of the annual accountant report.

OPINION

In our opinion, the annual accounting statements reflect reliably all material respects,thefinancialpositionofJSC«NSBank»forJanuary1st2017,theresultsof its financial activities and cash flow for 2016 in accordance with Russian Rules for the preparation of annual financial statements by credit organizations.



REPORT ON THE RESuLTS OF THE AuDIT CHECK IN ACCORDANCE WITH THE reqUirementS of the federAl lAw of decemBer 2nd 1990 no. 395-i «ON BANKS AND BANKING ACTIvITIES»

The management of a credit institution is responsible for a credit institution of mandatory ratios established by the Bank of Russia, as well as for compliance of internal control and organization risk management systems of a credit institution to the requirements of The Bank of Russia to such systems.

In accordance with Article 42 of the Federal Law of 2nd December 1990 No. 395-I«OnBanksandBankingActivities»duringtheauditoftheannualaccountingTheBank’s financial statements for 2016, we conducted a review of:

• Fulfillment by the credit organization for January 1, 2017 of mandatory ratios established by the Bank of Russia

• Compliance of internal control and risk management systems of the credit organization to the requirements set by the Bank of Russia to such systems.

This verification was limited to those selected on the basis of our judgments of procedures, such as requests, analysis, and examination of documents, comparison approved by the credit institution requirements, procedures and procedures required by the Bank of Russia, as well as recalculation and Numerical indicators comparison and other information.

during our audit check the following has been noted:

1) in regArd of fUlfillment By the credit inStitUtion of MANDATORY STANDARDS SET BY THE BANK OF RuSSIA.

Values of the mandatory standards set by the Bank of Russia were within limits.

We did not conduct any procedures with respect to accounting data of the Bank, except for the procedures we deemed necessary for the purpose of whether the annual financial statements of the Bank reflect reliably in all material respects, its financial position of January 1st 2017, the financial results of its activity and cash flow for 2016 in accordance with Russian rules of filling out annual accountant reports.



2) in termS of compliAnce of internAl control And orgAnizAtion RISK MANAGEMENT SYSTEMS OF THE BANK MEETING REquIREMENTS OF THE BANK OF RuSSIA FOR SuCH SYSTEMS:

a) In accordance with the requirements and recommendations of the Bank of Russia of December 31st, 2016, the Internal Audit Service of credit organization is subordinate and accountable to the board of directors of credit organization, risk management unit of a credit institution was not subordinated and was not accountable to the units receiving related risks, heads of internal audit service and risk management units of the credit institution correspond with qualification requirements established by the Bank of Russia.

b) Operating of December 31st 2016, internal documents establishing methods of identification and management significant for the credit organization credit, operational, market, interest, legal risks, liquidity risk and risks of loss of business reputation, implementation of stress testing approved by the authorized management bodies of the credit institution in accordance with the requirements and recommendations of the Bank of Russia.

c) Presence in a credit institution of December 31st 2016, the reporting system for credit, operational, market, interest, legal risks, loss risks, liquidity and risks of loss of business reputation, as well as its own funds (capital) of a credit institution.

d) Periodicity and consistency of reports prepared by risk management units of the credit institution and the internal audit service of the credit organization during 2016 on management of credit, operating, market, interest, legal risks, risks of liquidity loss and risks of loss of business reputation, corresponded to internal documents of the credit organization; These reports included risk management of the credit institution and the internal audit of the credit institution with respect to the evaluation of effectiveness appropriate methods of the credit organization, as well as recommendations for their improvement.

e) As of December 31st 2016, to the powers of the Board of Directors of the credit organization and its executive management bodies is control over compliance with established internal credit documents organization of risk limits and sufficiency of own means (capital).

f) To monitor the effectiveness of the credit organization procedures for risk management and consistency of their application during 2016, the board of directors of a credit institution and its executive management bodies discussed on a periodic



basis, reports prepared by the credit risk management units of the organization and the internal audit service, considered the proposed measures to eliminate deficiencies.

g) The board of directors of a credit institution considers issues of organization, monitoring and control of the wage system, evaluation of its conformity with the strategy of the credit organization, nature and scale of transactions, the results of its operations, the level and combination of accepted risks.

With regard to the organization internal control and credit risk management, we draw attention to the fact that the share of loans classified by the executive body of a credit institution into a higher category of quality, standardized approaches of the Bank of Russia to the quality of loan debt is 27.7% of the total amount.

Procedures for internal control and organization of systems of risk management of a credit institution was conducted by us exclusively for the purposes of checking the compliance of internal control and organization of systems risk management of a credit institution to the requirements of The Bank of Russia to such systems.

OTHER DATA

This audit report is presented with respect to the full set of annual financial statements, and should be considered along with explanatory information to the annual financial statements, providing disclosure of material information about the credit institution.

The information is not presented in the form of published annual reporting forms.

Audit of the annual financial statements of JSC «NSBank» for 2015wasconducted by another audit organization. Based on the results of the audit report was drawn up on May 11, 2016 with the expression of an unmodified opinion on the annual financial statements for the year 2015.

audit leading executive general director deputyof audit quality control llc st-audit By deputy №3 of 1st October 2016

10th of April 2017

lyhovskoy victorself-regulating auditors organization

“Commonwealth” AssociationRegistration number 21706002303

Qualificationcertificate№01-000322Issued Indefinitely



balance sheet 01.01.2017 (thousand rubles)

№ П/П ARTICLE NAME DATA AT THE BALANCESHEET DATE

DATA AT THEBALANCE

SHEET YEAR

I. ASSETS

II. LIABILITIES

Cash

Credit organizations assets in the Bank of Russia

Mandatory reserves

Credit organizations assets

Financial assets appreciated to the fair value through profit or loss

Net loan debt

Net investments in securities ready to be sold

Investments in subsidiaries and dependent companies

Net investments in securities held to redemption

Current tax requirements

Deferred tax asset

Main assets, non-material and material savings

Long-term assets ready for sale

Rest of assets

Overall amount of assets

Credits, deposits and other of the Bank of Russia

Credit organizations assets

Client assets who are not credit organizations

Private clients deposits

Financial liabilities appreciated to the fair value through profit or loss

1

2

2.1

3

4

5

6

6.1

7

8

9

10

11

12

13

719 145

567 264

172 121

194 990

1 438

14 555 791

11559 830

4 805 232

3 206 985

587

163 569

1 300 936

10 988

341 038

32 622 561

827 329

2 268 468

177 825

290 527

0

12 607 783

13 178 703

4 944 856

4 978 443

1 538

7 966

1 109 333

92 400

360 047

35 722 537

14

15

16

16.1

17

0

4 187 832

23 205 524

15 947 318

51 391

0

2 266 612

28 282 336

17 509 507

7 887



№ П/П ARTICLE NAME

II. LIABILITIES

III. SOURCES OF OWN FUNDS

IV. OFF BALANCE SHEET LIABILITIES

Promissory notes issued

Current income tax obligations

Postponed tax obligation

Other obligations

Provisions for possible losses on contingent credit liabilities, other possible losses and operations with residents of offshore zones

Overall liabilities amount

Shareholders assets

Own shares bought of shareholders

Share premium

Reserve fund

Revaluation at fair value of available for sale securities decreased by deferred tax liability

Revaluation of fixed assets and intangible assets, reduced by deferred tax liability

Revaluation of liabilities for payment of long-term rewards

Monetary funds of non-repayable financing (contributions to property)

Revaluation of hedging tools

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

193 143

1 109

56 003

384 025

65 785

28 144 812

1 760 000

0

17

134 410

84 753

118 408

0

0

101 501

0

64 395

475 491

64 151

31 262 373

1 760 000

0

17

111 800

103 302

87 067

0

0

Previous years uncovered losses/profits

Unused profit/loss for the reporting period

Overall amount of sources of own funds

Irrevocable liabilities of credit institution

33

34

35

36

2 370 092

10 069

4 477 749

4 237 354

1 945 830

0 0

452 148

4 460 164

6 661 531

Contingent liabilities of non-credit nature38 36 550 0

Credit organization guarantees37 7 110 308 7 300 263

DATA AT THE BALANCESHEET DATE

DATA AT THEBALANCE

SHEET YEAR

10th of April 2017

alexeeva s.Chief accountant

Kurtasova n. First Deputy of the Board Chairman



FINANCIAL RESuLTS REPORT

for 2016 (thousand rubles)

№ П/П THE NAME OF AN ARTICLE

I. PROFITS AND LOSSES

Interest income, total, including

From placement in credit institutions

From loans granted to customers who are not credit institutions

From the provision of financial leasing services

From investments in securities

Interest expenses, total including

On advances from credit institutions

On issued debt obligations

Net interest income (negative interest margin)

Change in the reserve for possible losses on loans, loan and equivalent debt, funds placed on correspondent accounts, as well as accrued interest income, total, including

Net income from operations with financial assets that are measured at fair value through profit or loss

Net income from transactions with securities available for sale

Net income from operations with securities held-to-maturity

Net income from foreign currency operations

Net income from re-evaluation of foreign currency

1

1.1

1.2

1.3

1.4

2

2.1

2.2

2.3

3

4

4.1

5

6

7

2 501 500

22 604

1 725 431

0

753 465

1 984 534

204 383

1 774 194

5 957

516 966

270 007

-32 783

786 973

210 976

83

3 330 238

39 083

2 317 859

0

973296

2 602 165

242 262

2 347 606

12 297

728 073

-546 752

-49 457

181 321

5 217

0

Net income from precious metals operations8 118 155 368 408

Income from other corporate organization capital participation

Commission income

Commission expanses

Reserve change for possible losses on securities operationsbeing ready for sale

Reserve change for possible losses on securities operations held to redemption

9

10

11

12

13

2 018

1 544 127

-1 079 902

2 838

1 086 659

-3 714

-212 905

634 000

13 418

0

DATA AT THE BALANCESHEET DATE

THE SAME DATAFOR THE PREVIOUS

YEAR



№ П/П

I. PROFITS AND LOSSES

II. THE REST OF TOTAL INCOME

Reserve change due to other matters

Net profit/loss

Operational spending

Profit/loss before tax

Tax refund

Profit/loss due to current activity

Profit/loss due to termination of an activity

Profit/loss for on sheet period

Earnings (loss) before interest and taxes

Taxincome (expense)

Income (loss) from continuing operations before tax

Income (loss) from discontinued operations

Income (loss) for balance sheet date

Profit/loss for balance sheet date

Other net profit/loss

Items that are not reclassified to profit or loss, total, including

Change in fixed assets revaluation fund

Change in the revaluation reserve of the obligation to provide pensions for employees under the program with fixed payments

Rest total profit/loss that can not be reclassified to profit or loss

Except for income tax

Items that are not reclassified to profit or loss, total, including

Change in the cash flow hedge fund

Income tax relating to items that may be re-classified as profit or loss

Other comprehensive income / loss, which can be reclassified to profit or loss, net of income tax

Other comprehensive income / loss, net of income tax

Change in the revaluation reserve of financial assets available for sale

Income tax relating to items that can not be reclassified to profit or loss

14

15

16

17

18

19

20

21

22

23

24

25

26

369 103

27680

0

1 113

-372 144

48 870

2 691 189

2 595 902

95 287

85 218

11 133

-1 064

10 069

388 435

37 767

-111 537

63 317

201 750

93 195

1583 138

1 209 887

373 251

-78 897

452 148

0

452 148

1 10 069 452 148

2

3

3.1

3.2

Х

28 927

28 927

0

Х

407

407

0

4 -2 432 32 306

5 31 359 -31 899

6 -24 526 537 330

6.1 -24 526 537 330

6.2

7

8

9

10

0

-5 960

-18 566

12 793

22 862

0

76 297

461 033

429 134

881 282

THE NAME OF AN ARTICLE DATA AT THE BALANCESHEET DATE

THE SAME DATAFOR THE PREVIOUS

YEAR

10th of April 2017

alexeeva s.Chief accountant

Kurtasova n. First Deputy of the Board Chairman



today middle-aged people looK Far ahead in terms oF their Future when they Finish their worKing career. NPF hELPS TO SAVE PENSION.

although every russian person can choose the national pension Fund oF his own choice, it leads us to conclusion that the main point is its reliability.

Годовойотчет2016 60

ПОПУЛЯРНЫЕ ИНВЕСТИЦИИ В РОССИИ –ИНСТРУКЦИЯКПРИМЕНЕНИЮ

oFFice addresses *

CENTRAL OFFICEMoscow Dobrovolcheskaya street 20 building 2

DMITROvMoscow region Professional street 4

Ugo-zApAdnAyAMoscow Novocheremushkinskaya street 50

TvERSKOY BuLvARMoscow Tverskoy bul’var 20-1

KROPOTKINSKAYAMoscow Soymonovskiy proezd 7-1

KuRSKAYAMoscow Zemlynoy Val 36

CvETNOY BuLvARMoscow Samotechnaya str 5/14

SKHODNENSKAYAMoscow Skhodnenskay str 35-1

KON’KOvOMoscow Ostrovitynova str 7

uJNOE CHERTANOvOMoscow Varshavskoe shoes 152-11

SEMENOvSKAYMoscow Tkackaya str 5-3

AZOvSKAYAMoscow Azovskay str 24-2

PAvSHINOMoscow region Krasnogorsk Podmoskovniy boulevard 1

KOTELNIKI Moscow region 3d pokrovskiy str 1

vELIKIY NOvGORODVoskresenskiy boulevard 4

OPERATIONAL OFFICE “SAINT – PETERSBuRG” Bankovskiy str 3BObuhovskoy oborony avenue 120B

OPERATIONAL OFFICE “TuLA” Pervomayskay str/ fridrich engels str 9/ 133

OPERATIONAL OFFICE “IvANOvA”Bagaeva str 33

contact telephone:8 (800) 555 43 24

* 01.06.2017 Data



inFormation

FuLL NAME:JSC “NS BANK”

REGISTRATION DATA:11th of October 1994

BANK DETAILS:inn: 7744001024K/c: 30101810945250000158 in the Central Bank of Russia’s Central Department of the Central Federal Districtbic: 044525158okro: 29308428window: 96120ogrn: 1027739198200

ADDRESS:109004 Moscow Dobrovolcheskaya str 20-2

CONTACT NuMBER8(800) 555 43 24

weB-Site:www.NSBank.ru

annual report 2016

Documents

POPULAR INVESTMENST IN RUSSIA — MANUAL · • Money transfer system “Zolotaya Korona” • Money transfer system “Unistream” NS BANK IS A MEMBER: • Private clients insurance