30th Efma Convention: L d hi i t il fiLeadership in retail finance
13 p.m. & 14 March 2008 - Paris
Andrei KazminDirector GeneralRussian PostRussian Post
Reforming the Russian Banking Sector g gand Sberbank’s Role in the Development
of Economyof Economy
Andrey I KazminAndrey I KazminAndrey I. KazminAndrey I. Kazmin, , Chairman of the Board and CEO, Chairman of the Board and CEO,
Sberbank Sberbank
2002008 EFMA’s 30th Annual Convention8 EFMA’s 30th Annual ConventionParis, March Paris, March
2
Rapid Growth of Russian Economy p d G ow o uss co o y
34%GDP growth:
22%
2006Growth over 3 years
GDP growth: Russia and industrially
10%7%
4% 3% 2% 2% 2%
11%8% 7% 6% 6%
ydeveloped countries
2% 2% 2%
62%Growth, %
41%44%
37%35%
62%52%
45%42%42%38%
35%
Assets/GDP
B ki t i 27%31%
34%Banking assets in Russia
32001
20022003
20042005
20062007 (E)
Russian Banks: Good Potential for Growthuss s: Good o e o G ow325%
Banking assets /205%
148%
Banking assets / GDP *)
106% 92% 91% 74%52%
Germany
ItalyJapan
Czech Repub
Turkey
Kazakhstan
PolandRussia
8.9%8.3%7.9%public
an6.4%
5.9%
4.4%Bank loans / fi d it lfixed capital investments
42001 2002 2003 2004 2005 2006
*) 2006
Shortage of Capital as Hindrance to D l tDevelopment
16,8%14 9%15 0%16,0%
17,0%19,1%14,9%15,0%16,0%
Capital adequacy (Central Bank’s 10%
Standard No. 1)
2003 2004 2005 2006 2007 01.07.07
Public
54%
44% Public offerings by
Sberbank and VTB
36%
37%44%
41%27%
28%
Banking capital and
16%31%
28%
CapitalAssets
capital and assets growth
52004 2005 2006 2007** Estimate
Long Funds Shortageo g u ds S o ge
65%10Deposits
Trillion RUB
65%
54%
42%8
10LoansLoans in deposits, %
Changes in the31%
14%20%4
6 Changes in the saving behaviour
0
2
2002 2003 2004 2005 2006 200720%
Loans covered by deposits
Share of long loans in assets
17%15%
12%9%
15%Share of long deposits in liabilities
Sh t f l
16%17%27% 23%
12%9%
5%
10%Shortage of long funds
6
3%3%3%2%0%
2004 2005 2006 01.07.2007
Impacts on the Domestic Banking Sector
US sub-prime mortgage crunch is limiting access to global capital markets. Banks re-orient towards domestic funding.
Russia’s current account balance isSpeculative capital
Russian banking
account balance is impaired flows out of Russia
gsector Interbank loan
rates go up
Demand for Central Bank refinancing
instruments goes up
Funding base and retail deposits
g p
Balances of correspondent and
instruments goes up
7
g pgrowth goes through a stage of
seasonal slowdown
pdeposit accounts with the Central
Bank shrink
Sberbank Today
Major Performance Results for 9 Months 2007 *)
Sbe b od y
Major Performance Results for 9 Months 2007 )
Parameter 01 Jan.2007, billion RUB
01 October 2007, billion RUB
Growth over 9mo 2007RUB billion RUB 2007
Net assets 3 574 4 592 28,5%
Book profit 112,8 102,9 22.9%*
Net profit 87,9 81,2 22.4%*
Capital 347 633 82,4%
ROAE 28,6% 20,0%
ROAA 2,9% 2,6%
8
, ,
*) All figures here and hereafter are by RAR.
* Year on year
Profit Growth o G ow
31,7 33,937,2
27 6 27,740
25,927,6 ,
20
30
n R
UB
10Bill
io
0Q1 2007 Q2 2007 Q3 2007
Book profit Net profit
1 EUR 36 62 RUB
9
1 EUR = 36, 62 RUB
FundraisingFundraising Deposits Breakdown of raised funds
2 029 2 1482 311
2 435
2 500
Breakdown of raised funds
Retail deposits 63 2%
2 000
llion
RU
B 63.2%
1 50001.01.07 01.04.07 01.07.07 01.10.07
Bi 26.3%
Corporate accounts *
Corporate funds Other7.4%822 870
1 016 1 062
1 100
Corporate accounts
%
Global borrowings 3.1%
822
700
900
llion
RU
B
10
3.1%500
Q4 2006 Q1 2007 Q2 2007 Q3 2007
Bil
* - average daily balance for the quarter
Corporate LendingCorporate Lending Sector-wise breakdown 2 578Loan book
Industry and other sectors: 55 6%
1 929 1 9992 115
2 000
2 500
UB
sectors: 55.6%
Trade:23.9%
1 500
Bill
ion
RU
23.9%1 000
01.01.07 01.04.07 01.07.07 01.10.07
1 500 Lending quarter-wise
Transport Construc
1 332
1 111
9171 000
1 500
RU
B
Lending quarter wise
and communications: 8.1%
Agriculture:6,5%
tion: 5,9%
9171 000
Bill
ion
R
11
500Q1 2007 Q2 2007 Q3 2007
Corporate Lending Customer-wiseCorporate Lending Customer-wise
S ll b i l thSmall business loans growth
288388
ion
RU
B
Corporate loan book
Medium37 7%
Large customers 46 6%
89146
205Bill
i
37.7%46.6%
Small business loans as percentage
01.01.04 01.01.05 01.01.06 01.01.07 01.10.07
15.0%
13 2%
15.0%14.9%14.5%15.5%
Small business loans as percentage of corporate loan book
Government authorities: 0.7%
12.1%13.2%
11.5%
13.5%
Small business
12
01.01.04 01.01.05 01.01.06 01.01.07 01.10.07
Retail LendingRetail Lending
867L b kRetail loan book breakdown 867
794
695 719800
900
UB
Loan book Retail loan book breakdown
695 719
600
700
Bill
ion
RU
Consumer loans: 62.8%
60001.01.07 01.04.07 01.07.07 01.10.07
Mortgage loans as percentage of27.3%27.3%
22.1%30%
Mortgage loans as percentage of retail loan book
Mortgage loans Car loans4.2%Other
5 7%
7.6%13.0% 15.2%
10%
20%
13
5.7%0%
01.01.04 01.01.05 01.01.06 01.01.07 01.10.07
Credit Risk ManagementCredit Risk Management
35002%
6%
Loan book and percentage of loans overdue
Risk level
1.1% 1.1%1.1% 1.0%
3000
3500
RU
B
1% 5.2%4%
6%
2 7122 901
3 077
3 550
2500Bill
ion
1%3.7% 3.9%
3.5% 3.2% 3.1%2%
200001.01.07 01.04.07 01.07.07 01.10.07
0%
Loans outstanding
0%
01.01.04 01.01.05 01.01.06 01.01.07 01.07.07 01.10.07Loans outstanding Loans overdue / loans outstanding
14
Revenues for 9 Months 2007Revenues for 9 Months 2007 Revenues
134160
2006 2007
Revenues for 9mos 2007, RAR
89 91103
122134
113120
2006 2007 Interest income on
lending: 67.6%89 91
80
llion
RU
B
40
Bil
Fees:0
Q1 Q2 Q3Securities: 11.4% 18.1%Other:
2.9%
15
Fee IncomeFee Income
F i th F i b kdFee income growth Fee income breakdown
32.8%
21.3%
19 723.0
24.9
19 0
30 2006 2007
15.4%
2.2%14.8
17.619.719.0
20
llion
RU
B
15.0%13.3%
Retail cashier/payment services0
10Bil
Retail cashier/payment services Corporate cashier/payment services Retail lending Corporate lending
0Q1 Q2 Q3
16
Bank cardsOther
Expenses for 9 Months 2007Expenses for 9 Months 2007
Expenses Expenses breakdown for
50.3%120 55%
p
R t il d it
Deposit insurance:
p9mos 2007
47.1%45.2%
60
90
RU
B
45%
50% Retail deposits interest: 36.7% 3.6%
30
60
Bill
ion
40%
45%
0Q1 II квартал Q3
35%Other:
Q1 II квартал Q3
Expenses Cost / Income Provisions:8,6%
Administrative, operational, staff: 31.9%
19,2%
17
Capital, Capital Adequacy RatioCapital, Capital Adequacy Ratio
Capital Capital adequacy
600
UB
19.1% 17.7%
11 7%15.9%
16%
20%
347
602 606 633
200
400
Bill
ion
RU 11.7%
8%
12%
10%
001.01.2007 01.04.2007 01.07.2007 01.10.2007
0%
4%
01.01.2007 01.04.2007 01.07.2007 01.10.2007
18
Sberbank Market Cap Sbe b e C p
RTS indexOrdinaries price (RTS)
4.3110 4 501.01.07 01.04.07 01.07.07 01.10.07 01.11.07 4.3
4.23.9100
110
SD)
4 0
4.5
3.63.480
90
Cap
billi
on U
S
3.5
4.0
ies p
rice
SD)
60
70
(b
3.0 Ord
inar
i(U
19
01.01.07 01.04.07 01.07.07 01.10.07 01.11.07Capitalization Ordinaries price (RTS)
Historical prices recalculated per new par value
Development of the Banking Sector: Wh t H t b DWhat Has to be Done
A i i i li iActions to raise capitalisation
Revise approaches to long funds accumulation andRevise approaches to long funds accumulation and use
I h i f l dImprove mechanisms for money supply and refinancing from the Bank of Russia
Develop stock market and long-term investment marketmarket
20