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Bank Vozrozhdenie Promising SME and retail local franchise Investor presentation October 2014

Investor presentation 1014 eng

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Page 1: Investor presentation 1014 eng

Bank VozrozhdeniePromising SME and retail local franchise

Investor presentationOctober 2014

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Agenda

Key facts

Business model

Business overview

Recent IFRS results

Investment summary

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Over 20 years of successful development

1991-1992 1993-1995

Establishment and banking license

34 branches in the Moscow Oblast

1996-1998 2003-20041999-2002 2005-2006 2007-2008 2009-2010 2011-2012

9 new regional branches opened

Cash collection and delivery services established

Corr. accounts with western banks

License for foreign exchange

Associate member of VISA International

Authorized Bank of the Russian Government

Joined S.W.I.F.T.

Joined the World Bank development program

Cooperation with CIBC

S&P rating

Rated by the Central Bank as a stable bank after the financial Crisis

CIBC becomes a shareholder

The 3rd largest branch network

Top 10 by deposits from individuals

Top 3 in the State Mortgage Program

Top 7 mortgage provider

Best mid-cap Russian bank (Big Money)

$ 177 mln raised by 20th issue

3rd by lending to SME

$81 mln EBRD financing

Top 10 by bank cards issued

Best SME bank in Moscow Oblast

Top 10 retail banks in Russia

First MBS deal on Rub 4,1 bln

Bank’s ADRs traded on the Frankfurt Stock Exchange

Established ATM network and a processing center

Top 20 by corporate loan portfolio

Widest ATM network in the Moscow Oblast

Over 100,000 VISA cards issued

17th equity issue raises $33 million

Joined Deposit Insurance Program

Overall rebranding

CRM system development

The most transparent bank in Russia (S&P)

Top 500 world’s banking brands

Best bank IR and best IR professional (Thomson Reuters )

Bank of the Year in Russia in 2010 (The Banker)

Over 1,550,000 clients

Best public company (Secret Firmy Magazine)

Alexander Dolgopolov appointed as  the Chairman of the Management Board

V.Bank launched project on cost efficiency

2013-2014

Best Corporate Governance, Russia (World Finance)

Best IR Management in Russia (Global Banking & Finance review)

Best Banking Chairman of the Board in Russia (Global Banking & Finance review)

Best IR Management in Russia (Global Banking & Finance review)

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Prudent risk-management policy

Balanced Lending and Funding policy

Servicing retail customers throughout their whole life-cycle

Servicing Corporate and SME Customers on Each Stage of Business Development

Bank Vozrozhdenie strategy…

… 1 700 000 Retail Clients…

… 63 400 Corporate and SME Clients…

… 21 Regions …

… 142 Offices …

… 879 ATMs …

Focus On Core Banking Products

…service…

…via…

Increasing efficiency in service delivery

Bank Vozrozhdenie – a community bank built on strong relationships with SMEs and individual customers

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Moscow Oblast is a home territory with historically strong market position

21 regions of presence. Focus on the most perspective South and North-West

Branches Sub branches Retail offices

34 43 8 85Total

As of October 1, 2014

531 ATMs – every town is under coverage

19 36 2 57

Total

348 ATMs

Retail officesBranches Sub branches

Distribution network

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* RBC most recent rankings

Key Figures, RUB

Assets

Loans b.p.

Customer Funds

Net Income

Shareholders equity

Retail Clients

Corporate Clients

Personnel

Offices

ATMs

209,609 mln

166,148 mln

158,110 mln

859 mln

23,196 mln

1,700,000

63,400

6,054

142

879

Loans to SMEs 6

19

39/19

28

13

Volume of retail deposits

Branches/ATMs

Net Assets

Bank cards issued

Rankings*

Corporate loans 21

Mortgages 10

Basic information & position in Russian banking system

Financial indicators as of June 30, 2014

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Ba3/D-/NP, stable

BB-/ruAA-, negative

MICEX Broad Market IndexMICEX Second-Tier Index

MICEX Start Cap IndexMICEX Financial Index

Level 1 (Highest) MOEX

Moody’s

Standard&Poor’s

Included in indices

Listing

BrandFinance Banking 500 surveyV.bank ranks among top-10 Russian most valuable banking brands with brand value of $190 million

The BankerV.Bank – “The Bank of the year 2010 in Russia” as per the survey of The Banker magazine

Market recognition

Credit ratings Listing

High recognition of brand

World FinanceV.Bank was awarded for “Best Corporate Governance, Russia”, according to World Finance survey

01/01/06 01/01/07 01/01/08 01/01/09 01/01/10 01/01/11 01/01/12 01/01/13 01/01/147

10

13

16

19

22

25

0

7

14

21

28

35

42S&P

S&P international BB-

Moody's Ba3

Moody's Interfax Aa3.ru

Moody'sAaa

Aa

A

Baa

Ba

B

Caa

S&P national scale ruAA-

AAA

AA

A

BBB

BB

B

CCC

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Business model

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Strategy

Focus on core banking

products and personal service

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Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

113 116 112 109 113

56 5550 44 45

169 171162

153 158

Interest-bearing DepositsInterest-free Current accounts

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

62% 61% 64% 72% 71%

38% 39% 36% 28% 29%

Non-interest income Net interest income

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

130 133 126 128 122

37 41 43 44 44

Retail loansCorporate loans

- Customer oriented organic growth

- Conservative balance sheet

- Primarily deposit funded

- Focused regional structure

- Increasing efficiency in service delivery

Note: all loans are gross loans

RUB bln

RUB bln

27%

73%

RUB bln

29%

71%

Business modelBusiness based on relationships… … gives solid non-interest income

Loan portfolio development… … funded by customer accounts

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Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 201421 22 22 23 23

7 5 4 4 31 1 4 1 19 9 10 14 14

169 171 162 153 158

8 9 9 10 9

216 217211 211 210

5.5 1.6

Due to other banks

CBR funds under repos

Client funds

Securities issued

Other liabilities

Subordinated loans

Equity

Assets and liabilities

Q1 2014 Q2 2014

7.7 7.4

2.7 1.4

5.5

1.6

15.9

10.4

8.5%

5.6%Interbank funding with ma-turity over than 1 year

Interbank funding with ma-turity less than 1 year

Loans from CBR under repo agreements

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 201413 13 13 12 13

150 155 156 158 152

12 14 12 7 121 1 1 1 1

40 33 29 26 31

216 217211 211 210

6.4 1.9

Cash and equiva-lents

Due from banks

Invest. securities pledged under repos

Securities

Net loans

Other assets

Assets stable across the year, share of liquidinstruments – 18,5% Client funds as the main funding source

Market funding replaced by customer resources L/D ratio down to targeted range

RUB bln RUB bln

RUB bln

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

167 173 168 172 166169 171 162 153 158

99%102% 104%

112%

105%

Gross loans Customer funds L/D

8,5%5,6%

RUB bln

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Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 201420 18 19 16 18

87 91 87 89 93

107 109106 104

110

Retail deposits

Retail accounts

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

26.0 24.9 24.3 19.8 20.1

35.8 36.8 31.228.8 27.7

62 6255

49 48Corporate accounts

Corporate deposits

Customer fundsRetail funds saw a strong inflow Rebound of corporate depositsRUB bln

-1.7%+5.6%

RUB bln

Dec Jan Feb Mar Apr May Jun

53 50 47 46 42 42 45

45 6 5

5 7 5

57 5454

5147

49 50

RUB Corporate FX Corporate

Corporate funds monthly dynamics (RAS)

Dec Jan Feb Mar Apr May Jun

79 77 76 75 79 80 83

25 27 29 28 28 27 26

105104

105103

108107

109RUB Retail FX Retail

Retail funds monthly dynamics (RAS)

24% 10%

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Segment Total credit exposure, RUB mln

Large business > 750

Medium-size and small businesses 30 - 750

Micro businesses 6 - 30

Food processing – factories manufacturing different types of high-quality food and beverages.

Car stores – range of car parts and accessories, new and used economy class cars most popular in the regions, where people give strong preference to repairing their engines themselves.

Clothes factories – small-scale production of clothing and apparel.

Local retailer chains – small chains of handy stores “Close-to-House” style for daily shopping located in dormitory area with high density of population.

Who are our SMEs?What is our SME Definitions

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Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

130 133 126 128 122

37 41 43 44 44

166.9 173.2 168.2 171.6 166.1

Corporates Retail

RUB bln

…while new loans are issued mainly to SMEs

*Loan portfolio before provisions for impairment

-3.2%

Q1 2014 Q2 2014

51.573 49.898

…but diversification continues – lending to large corporates is curtailed…

Q1 2014 Q2 2014

76.178 72.192

RUB bln

RUB bln

Loans to new clients

Loans to existing clients

Recoveries Migration between

SMEs and large corps

+1,1 +4,3 -9,9 +0,5

Loans to new clients

Loans to existing clients

Recoveries Migration between

SMEs and large corps

0,0 +0,5 -1,7 -0,5

Loan portfolioLoan portfolio developments in Q2 2014

Gross loan portfolio decreased… …due to corporate loan portfolio contraction…

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

51 52 51 52 50

79 81 74 76 72

130.2 132.6125.6 127.8

122.1Large corporates SMEs

-6.2%

RUB bln

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up to 30 days 31-180 days 181-365 days > 1 year

9.8%

36.7%

28.7%24.8%

Corporate portfolio

RUB bln

75,2%

as of June 30, 2014

… and regional diversification

Corporate loan bookCredit policy sticks to reliable collateral… ….providing mostly working capital…

17%

38%

17%

11%

16%

Moscow Oblast

Moscow

Other regions

South regions

North-West regions

RUB122.1 bln

12%

2%

21%43%

22%

RUB122.1 bln

Real estate

Uncollateralized loans & Other collateral

Equipment & vehicle

Government guarantees

Guarantees

as of June 30, 2014

as of June 30, 2014

…maintaining industry…

Construction

Manufacturing

Agriculture

Wholesale &retail trade

Administrations

Other

Finance

Transport

Real estate

RUB122.1 bln

as of June 30, 2014

36%

0%25%

1%

11%

5%

4%

8%9%

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Retail lending – promising segment

01/09/11 01/03/12 01/09/12 01/03/13 01/09/13 01/03/14 01/09/145

10

15

20

25Consumer loans, RUB

Mortgages, RUB

Credit cards, RUB

up to 30 days 31-180 days 181-365 days > 1 year

1.6% 1.4% 2.3%

94.6%

Retail portfolio

RUB bln

High-margin consumer loans to customers with apparent cash-flow –employees of corporate clients

Primarily mortgages under state-related agency JSC “AHML” standards

We plan to continue expanding retail loan portfolio, that was an important lending growth driver during recent years

Particular focus is on mortgages as the most perspective segment with gradual widening of consumer lending

as of June 30, 2014

Retail loans maturityRetail loan book growth

Rates on retail loans Mortgage securitization as a source of long-term funding for loan portfolio expansion

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

68% 68% 68% 69% 70%

26%

36.8

40.5

42.643.9 44.1

MortgagesConsumer and car loansCredit cards

Securitization 1

Rub 4.1 billion in December 2011

Class A with 8.95% coupon rate and Baa2 rating from Moody’s

Securitization 2

Rub 4.0 billion in April 2013

Class A with 8.5% coupon rate and Baa2 rating from Moody’s

Securitization 3

Rub 3.45 billion in March 2014

Class A with 9% coupon rate and Baa2 rating from Moody’s

+0.46%

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acquiring

Visa and Mastercard

Vbank-service and self-service

Card business – sales force of retail business

Q3 2013 Q4 2013 Q1 2014 Q2 2014

Payrolls 14,760 15,040 15,040 15,070

Debit cards 1,333,679 1,347,461 1,273,089 1,217,821

Credit cards

54,674 64,462 70,306 92,083

ATMs 854 884 870 898

70%

Interest

Fees & commissions

- Payrolls is one of the key tools for retail client base growth with strong potential – 63,400 of existing corporate clients with 18,393 installed “Internet-client” and “Bank-client” systems and 15,070 payrolls

- Offering cards to existing corporate clients: credit cards for owners, top and mid-level managers and specialists, debit cards for personnel

- Advanced functionality of the mobile and internet bank will switch more customer operations to remote channels unloading the offices and boosting transaction volume

30%

32%

23%

10%5%

cash operations

payrolls

Key pointsWide client base for business expansion

Mobile and internet bank – key drivers for future growth

Synergy of corporate and retail via core product – payrollsas of June 30, 2014

16%

84%

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Risk management

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Sound position on capital, liquidity and market risks

FX structure

Balance sheet maturity breakdown

Interest rate risk

Demand and less than 1 month

From 1 to 6 months

From 6 to 12 months

More than 1 year

51.644.5

33.7

69.3

58.3

36.9

26.6

63.9

AssetsLiabilities

RUB bln

Demand and less than 1 month

From 1 to 6 months

From 6 to 12 months

More than 1 year

43.2 44.1

51.4 50.858.0

36.9

26.6

63.9

Interest-earning assetsInterest-bearing liabilities

RUB bln

as of June 30, 2014

as of June 30, 2014 as of June 30, 2014

Q2 2013 Q3 2013 Q4 2013 Q4 2013 Q1 2014 Q2 2014

11.7% 11.4% 12.0%

8.8%9.7% 9.9%

14.6%13.2%

13.8%

11.2% 11.6%12.3%

Tier 1 Tier 1 + Tier 2 Statutory Capital (Н1.0)Statutory common equity Tier (Н1.1)

Basel I

Basel III

82%

137

25

Assets

LoansDue from banks&SecuritiesCash&Other assets

82%

31

3 1

Liabilities

DepositsDue to banks&SecuritiesOther liabilities

Capital adequacy

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Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

1,102 1,810 1,350 1,730 1,863

3.7%3.2%

1.9% 2.0%2.2%

3.00%

4.47%3.17%

3.94% 4,23%*

Retail

Credit quality management

15

Q2 2014Q1 2014Q4 2013Q3 2013Q2 2013

2.30%2.10%

0.57%

3.11%

3.12%

2.20%2.10%2.30%2.90%

2.79%

Charges to provisions to avg gross loans, QoQ

Charges to provisions to avg gross loans, YtD

+Rub 744 mln new NPLs-Rub 234 mln recoveries-Rub 73 write-offs

+Rub 1 123 mln new NPLs-Rub 990 mln recoveries

no write-offs

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

17,270 18,616 12,385 13,129 13,699

10.13% 10.46%

7.36%

7.70% 8.53%

10.35% 10.75%

7.36%

7.65% 8.25%

NPLs, Rub mlnProvisions, % of total portfolioNPLs, % of total portfolio

no new NPLsno recoveriesno write-offs

NPLs categorization

Annualized cost of riskNPLs dynamics*

* NPL includes the whole principal of loans at least one day overdue either on principal or interest as well as not overdue loans with signs of impairment

*2,2% of which is overdue less than 30 days

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

7,939 8,671 3,518 3,882 4,319

10.6% 11.1%

5.3% 5.3%6.0%10.0% 10.8%

4.7% 5.1%6.0%

SMEs

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

8,229 8,135 7,517 7,517 7,517

14.1%15.2%

14.8% 16.1%17.8%16.2% 15.6%

14.6% 14.6% 15.1%

Large corporates

NPLs, Rub mln Provisions, % of total portfolio NPLs, % of total portfolio

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Credit qualityAs of June 30, 2014

Large corporates

SMEs Mortgages Other retail

Total

Gross loans, including 49,898 72,192 30,722 13,336 166,148

Current loans 84.9% 94.0% 97.1% 92.7% 91.8%

Past-due but not impaired, including - 0.5% 2.4% 2.5% 0.8%

Less than 90 days - 0.3% 2.2% 2.5% 0.7%

Over 90 days - 0.2% 0.2% 0.0% 0.1%

Impaired, including 15.1% 5.5% 0.5% 4.8% 7.4%

Less than 90 days - 0.5% - 0.6% 0.3%

Over 90 days 15.1% 5.0% 0.5% 4.2% 7.1%

Total NPLs 15.1% 6.0% 2.9% 7.3% 8.2%

Provisions -17.7% -6.0% -1.0% -4.9% -8.5%

Net Loans 41,057 67,835 30,403 12,687 151,982

Provisions to NPLs Ratio

103.4%

Provisions to 90 days+

NPLs

117.4%

Rescheduled Loans

6.4%

NPL -the whole amount of loans with principal overdue for more than 1 day as well as loans with any delay in interest payments.

RUB mln

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Recent IFRS results

iPhone

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Financial highlights

As of June 30, 2014 2Q14 1Q14 QoQ 1H14 1H13 YoY

Interest income 4,949 5,063 -2.3% 10,012 9,097 +10.1%

Interest expense (2,554) (2,472) +3.3% (5,026) (4,680) +7.4%

Fee and commission income 1,149 1,101 +4.4% 2,250 2,587 -13.0%

Fee and commission expense (172) (185) -7.0% (357) (265) +34.7%

Other operating income 270 138 +95.7% 408 418 -2.4%

Total operating income b.p. 3,642 3,645 -0.1% 7,287 7,157 +1.8%

Operating expense (2,178) (2,187) -0.4% (4,365) (4,226) +3.3%

Provisions for loan impairment (973) (893) +9.0% (1,866) (2,275) -18.0%

Provisions for impairment of other assets

46 (9) - 37 2 x18.5

Taxation (106) (128) -17.2% (234) (137) +70.8%

Net profit 431 428 +0.7% 859 521 +64.9%

RUB mln

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Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

4.2% 4.5%4.9% 4.9% 4.6%

NIM in line with target despite funding costs growth

Interest income & expense breakdowns NIM decomposition

SpreadInterest rates

Q1 2014 Q2 2014

3.3 3.1

1.6 1.7

0.2 0.2

-1.5 -1.6

-0.4 -0.4-0.5 -0.6

2.6 2.4

Int. income from corp. loans

Int. income from retail loans

Other int. income

Int. expense from retail deposits

Int. expense from corp.deposits

Other int. expense

RUB bln

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

6.4% 6.7% 6.9% 6.6% 6.2%

11.5% 11.8% 11.8% 11.9% 11.7%

5.0% 5.1% 4.9% 5.3% 5.5%

Spread (net)Yields on earning assets (net)Cost of funds

Loans Deposits Other Base effect-0,31%

-0,13%

+0,07%

+0,02%

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

7.7% 7.6%6.7% 7.3%

8.1%

6.5% 6.8% 6.7% 7.0% 7.0%

10.9% 11.2% 11.4% 11.4% 11.3%

15.0% 15.3% 15.3% 15.4% 15.4%

Corporate term deposits Retail term depositsYields on corporate loans Yields on retail loans

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8

11

14

17

20

23

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

1,215 1,247

940 916 9771,137 1,145 1,169

Net fee incomeNet fee income with corrected gradual accruals of one-off reclass

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

2,237.0 2,423.0 2,646.0 2,591.0 2,395.0

1,215.0 1,247.0 940.0 916.0 977.0

215.00 138.00 96.00 138.00 270.00

3.73.8

3.7 3.6 3.6

Net interest income Net fees Other income

Operating results

…supported operating income on a stable level…amid seasonally higher business activity…

Fee income dynamics… …with all components growing in Q2...

RUB bln

RUB mln

-0.1%

+6.7%

-0.7%

-14.1%

Q1 2014 Q2 2014

238 241

274 295

219 225

185 216916

977

Settlements Cards Cash transactions Other

RUB mln

2012 2013 2014

H1 201286.8

H1 201390.0

H1 201491.6

Balances on debit card accounts

Credit turnover of card accounts

RUB bln

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Operating costs under control

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

1,321 1,279 1,360 1,300 1,307

328 336 404 436 329176 181 203 170 194310 338 450 281 348

2,135 2,1342,417 2,187

2,178

Staff costs Administrative and other expenses Taxes other than income tax and contributions to the State Deposit Insurance Agency

Costs structure C/I ratioRUB mln

-0,4%

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

58.2% 56.0%

65.6%60.0% 59.8%

Cost to Income Ratio, %

Stage

Centralisation:

Internet-Bank client support service

Work with orders and requests of Federal Tax Service Requests - done

Orders - Dec14

AML/FT control Moscow region

Controller for the service of regular payments for the mobile and internet-bank

FRAUD-analysis and payment controller function

Automation of Internet-client payment processing on Rub payments

Optimisation of individuals’ incoming payments processing

Uniting cashier and teller functions Moscow region

Work with orders and requests of Federal Bailiff Service Requests - done

Orders - Oct14

Stage

HR documentation handling Moscow region – Dec14

Security Administrators function Moscow region – Oct15

Accounts opening / online client profiles Moscow region -Mar15/Dec15

Handling internal payrolls Moscow region – Jan15

FX control Moscow region – Mar15

Fixed cash collection routs planningPart of Moscow region –

Oct14

Credit middle and back office Moscow region – Dec14

Credit operations with large clients Moscow region – Dec14

Credit turnover/ reissue of bank cards on payrolls 2015

Establishing IT Help Desk/Service Desk 2015

Operating model optimization

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Efficiency indicatorsNet profitStable operating profit

ROA, % ROE, %

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

2.9%3.1%

2.4% 2.8% 2.8%

0.4% 0.5%

1.4%0.8% 0.8%

Operating profit before provisions and taxation / Assets

ROA

RUB bln

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

28.8%31.2%

23.0%25.8% 25.5%

3.5% 4.6%

13.2%

7.6%7.5%

Operating profit before provisions and taxation / Average equity

ROE

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

-1,309.0-1,348.0

-365.0-902.0 -927.0

1,532.0 1,674.01,265.0 1,458.0 1,464.0

Provisions Operating profit before provisions and taxes

+0.4%-4.4%

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014

188,000 247,000

724,000

428,000 431,000

Net profit RUB mln

+0.7%

+129%

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Capital & Governance

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1.10.13 1.1.14 1.4.14 1.7.14 1.10.14

100 RUB

1,000 RUB

10,000 RUB

100,000 RUB

1,000,000 RUB

10,000,000 RUB

0 RUB

200 RUB

400 RUB

600 RUB

800 RUB

1,000 RUB

Volume Last price

28%

31% 41%

SHAREHOLDER STAKE IN EQUITY

Dmitry Orlov (Chairman of the Board of Directors) 30.70%

Otar Margania (Member of the Board of Directors) 18.65%

JPM International Consumer Holding Inc. 9.37%

Total 58.72%

As per MOEX data

INDICATOR Q2 2014

Price to Book Value 0.4

Price to Earnings 6.0

Book Value per Share RUB926 ($28)

Earnings per Share RUB69 ($2)

Market cap RUB10 bln ($298 mln)

Chairman

Other management

as of May 12, 2014

More than 8,000 individuals and 1,000 companies are among our shareholders with foreign investors owning more than 34%

Capital structureShare price on MOEXShareholding structure

ValuationsMajor shareholders

Other

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V.Bank was awarded as the Bank of the Year in Russia in 2010

Andrey Shalimov

was awarded for the Best IR

in 2012

C H A IR M A N O F TH E

M A N A G EM EN T B O A R D

M r. A lexander D olgopolov

CHAIRMAN OF THE MANAGEMENT BOARD

Mr. Alexander Dolgopolov

G EN ER A L

M EETIN G O F

SH A R EH O LD ER S

GENERAL MEETING OF

SHAREHOLDERS

B O A R D O F D IR EC TO R S

12 members

9 are non-executive 5 independent

BOARD OF DIRECTORS12 members

9 are non-executive 5 independent

System of control

- Timely information provision to investors

- Full disclosure on web-site - Quarterly IFRS financial reporting

with web-cast presentations- Financial reports under IFRS

audited from 1991- Solid and professional team

HR and Compensation Committee

Continuing excellent reputation recognition:

AUDITORPricewaterhouseCoopers

Audit commission

Audit committee

Internal Control and Audit Service

Risk Management

MANAGEMENT STRUCTURE

M A N A G EM EN T B O A R D

12 m em bers

4 D eputy C hairm en

MANAGEMENT BOARD12 members

4 Deputy Chairmen

The arrows represent the authorities to appoint or elect the relevant Bank’s bodies and the External Auditor

High standards of corporate governance

V.Bank has the Best Corporate Governance in Russia, 2013

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Over 20 years in Top-30 Russian banks amid changing competitive landscape

Successfully passed through all crises (1993-94,1998, 2004, 2008) with time-proved conservative risk policies

Business model generating solid fees & commissions

Organic growth in core regions and client segments

Focus on operating efficiency

One of the most transparent FI in Russia – Best Corporate Governance by World Finance in 2013, leaders of Information Transparency to Shareholders by S&P in 2008, 2007, 2006

Management Board (12 members) with long-term banking experience; the Board of Directors headed by the Chairman with 40 years in Soviet and Russian banking systems

Positive track-record of communication with investors

Loyal clientele due to strong relationships with the customers

60% of client base is concentrated in promising Moscow Oblast

Corporate business focused on high-profitable SMEs, retail – on safe mortgages, consumer loans only for the “known” customers

Broad product line based on advanced IT-solutions and remote banking services

S O U N D S T R AT E G Y B U S I N E S S S T R E N G T H S

C U R R E N T C H A L L E N G E SH I G H S TA N D A R D S

Ongoing pressure on lending rates driven by state banks

Limited demand from key client sector – SME

Still high potential credit risk

Russian economy slowdown, macro instability

Still high potential credit risk

Competitive landscape for Russian private banks

Financial markets turbulence

Pace of operating model optimization project realization

Investment Summary

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33

Investor Relations contacts

Maria Gorbunova

Key specialist of [email protected]

Elena Mironova

Deputy head of [email protected]

Download our presentation

Download our contacts

Andrey Smirnov

IR [email protected]

Download our IR app for iPad

Download our IR app for iPhone

Tel.: +7 495 620 90 71E-mail: [email protected]: http://www.vbank.ru/en/investors

Slideshare: www.slideshare.net/IRTeamTwitter: www.twitter.com/vbank_IR

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Some of the information in this presentation may contain projections or other forward-looking statements regarding future events or the future financial performance of Bank Vozrozhdenie (the Bank). Such forward-looking statements are based on numerous assumptions regarding the Bank’s present and future business strategies and the environment in which the Bank will operate in the future. The Bank cautions you that these statements are not guarantees of future performance and involve risks, uncertainties and other important factors that we cannot predict with certainty. Accordingly, our actual outcomes and results may differ materially from what we have expressed or forecasted in the forward-looking statements. These forward-looking statements speak only as at the date of this presentation and are subject to change without notice. We do not intend to update these statements to make them conform with actual results.

The Bank is not responsible for statements and forward-looking statements including the following information:- assessment of the Bank’s future operating and financial results as well as forecasts of the present value of future cash flows and related factors;- economic outlook and industry trends;- the Bank’s anticipated capital expenditures and plans relating to expansion of the Bank’s network and development of the new services;- the Bank’s expectations as to its position on the financial market and plans on development of the market segments within which the Bank operates;- the Bank’s expectations as to regulatory changes and assessment of impact of regulatory initiatives on the Bank’s activity.

Such forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from those expressed or implied by these forward-looking statements. These risks, uncertainties and other factors include:- risks relating to changes in political, economic and social conditions in Russia as well as changes in global economic conditions;- risks related to Russian legislation, regulation and taxation;- risks relating to the Bank’s activity, including the achievement of the anticipated results, levels of profitability and growth, ability to create and meet

demand for the Bank’s services including their promotion, and the ability of the Bank to remain competitive.Many of these factors are beyond the Bank’s ability to control and predict. Given these and other uncertainties the Bank cautions not to place undue reliance on any of the forward-looking statements contained herein or otherwise. The Bank does not undertake any obligations to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required under applicable laws.

Disclaimer