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Annual Report 2005 ENG
 

Annual Report 2005 ENG

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    Annual Report 2005 ENG Annual Report 2005 ENG Document Transcript

    • Annual Report 2005 WWW.VBANK.RU
    • 2
    • Address of the president Dear shareholders, friends and colleagues! In many ways, our bank was extremely successful throughout We want our banking products and services to be understood 2005. First of all, I want to point out that the bank’s financial by our clients, to meet their needs, and to be useful in their results for the year were outstanding. According to Russian daily lives and work. My colleagues and I have a true interest Accounting Standards, our assets grew by 60%, to RUR 49 in our clients’ well being. We work with our longstanding, billion, our profits increased by 180% to RUR 891 million, and loyal clients to reach even greater business success. With new our capital increased by 27% to RUR 4,165 million. clients, we strive for a real understanding of their businesses and banking needs. We have a common interest in our clients’ These financial results reflect our effective management of the success! capital that shareholders have entrusted to the bank. However, the bank’s success is measured by more than just financial Unfortunately, we cannot tell you about all of our over 850,000 results. Our real achievement is the development of our retail clients and over 40,000 corporate clients. But I am proud personal relationships with clients and their trust in us. Our to present in this annual report a portrait gallery of some of the strategy is aimed at providing service to our clients, promoting clients of Vozrozhdenie Bank and their impressions of working the development of their business and helping them change with us. their lives for the better, and above all, supporting them in both good times and bad. The bank is expanding rapidly. This has been especially true in the retail area where products we introduced only two years On 12 April 2006 we celebrated the 15th anniversary of our ago have been exceptionally popular. Consumer loans, car bank. The bank has been through some difficult years, but they loans and debit and credit cards help individuals improve their were years that were both dynamic and interesting. Working lives. I am especially pleased that Vozrozhdenie was one of the closely with our clients, we have lived through the numerous 10 largest issuers of new mortgages last year. Buying a new changes that Russia and its banking system have undergone apartment is a major financial decision for people and we are in recent years. And we have never broken our banker’s word pleased to help in this important step. of honour to our clients. We have ensured that our bank has operated smoothly in times of crisis and, above all, we have Belief in our professionalism led to a dramatic increase, 66%, preserved and increased the size of financial resources our in the financial resources entrusted to the bank by corporate clients have entrusted to us. and retail clients in 2005. Thanks to rapid expansion into regions of Russia that are strategically important for our Our relationships with clients are our bank’s most precious business, the bank’s credit portfolio has become even more asset. This is the key factor in our approach to the banking diversified. The past year has seen the bank’s network expand business. So it was natural that the idea of building client to 138 branches. We have added 20 new branches to service relations on the principles of responsiveness, humanity and retail and corporate clients. Another important priority is to dependability became central to the bank’s rebranding project, increase the number of the bank’s ATMs and upgrade the which is now being implemented. We should like to stress that existing ones. By the end of last year we added 87 ATMs to our Vozrozhdenie Bank is «a bank that is always with you» in both network, which now has 401 ATMs. good times and bad. If it hadn’t been for the well coordinated and highly professional work of our more than 5,000 employees, none of these achievements would have been possible. I thank them from the bottom of my heart! Relations within our team are based on true partnership, trust, and respect. That’s the only way we can promote our relations with clients on the basis of responsiveness, humanity and dependability. Yours sincerely, Dmitry Orlov President, Vozrozhdenie Bank
    • 4
    • Contents Address of the president 3 Our bank 7 Key financial highlights 11 15 years of partnership 17 • Corporate business 17 • Retail business 20 Transactions on financial markets 24 Banking technologies 24 Human resource management 25 The bank’s social mission 25 Prospects for the bank’s development in 2006 27 Corporate governance 29 Capital and dividends 35 Financial statements 41 • Independent auditors report 41 • Financial statement under International Financial Reporting Standards (IFRS) 42 • Management Commentary on IFRS Financial Results 46 • Financial statement under Russian Accounting Standards (RAS) 48 Risk management 53 Background information 59 • Bank’s branches and offices 60
    • 6
    • Our bank Vozrozhdenie Bank provides personal banking and business In April 2006 Vozrozhdenie Bank launched a rebranding services to clients throughout the Russian Federation. Our campaign. This rebranding has affected not only the «look» nationwide network includes 138 locations and over 400 ATMs. of the bank but also our positioning strategy on the Russian We provide 900,000 clients with a range of services, from banking services market and the roles of marketing and savings accounts, payment handling and payroll management communications within our structure. The bank’s management to mortgages, bank cards and business and consumer loans. is confident that the rebranding exercise will help give brand a distinctive «feel», improve its recognisability, increase loyalty Vozrozhdenie Bank has been a part of Russian life and culture among existing clients, and boost the process of acquiring for many years. Today the bank combines the best of the new clients. stability and banking traditions of the past with the most up-to-date banking products, services and systems. We are Vozrozhdenie Bank is one of the largest financial institutions celebrating our 15 year anniversary in 2006. in Russia. Our reputation, quality of service and scope of activities are helping us to retain a leading position on the market. However, in the face of ever increasing competition from Russian and foreign banks, the bank’s technology based Our values competitive advantages are not sufficient in themselves to secure its further dynamic growth. It has been necessary to We believe that close relationships with our clients are our strengthen our corporate positioning, and to select and shape most valuable assets. We work in true partnership with our a unique «value based offer» that would clearly place the bank clients. We are responsive, human and dependable, the bank in a more favourable position vis-a-vis its competitors and that our clients rely on in good and bad times. This closeness to our could be used to build up effective communications with clients sets us apart, today and in the future our clients. Nikita Mikhalkov National artist of Russia General manager of OOO Studio TRITE Our friendly relationship with sense of the word. The supreme Vozrozhdenie Bank began professionalism of the bank’s more than ten years ago. The specialists goes hand in hand reputation of our Studio, TRITE, with sensitivity, cordiality, is built on such fundamental and reliability. I hope that our concepts as creativity, fellowship professional relationships and and hard work. Vozrozhdenie good friendship will last for Bank has more than once many years to come. displayed an attitude to joint projects that proves that it shares this approach to work and partnership, in the broad
    • Our bank The creation of a «value based offer» was launched in the The results of this study have shown that the unique spring of 2005. The rebranding exercise was managed asset of Vozrozhdenie Bank brand is our trust based by the international consultancy firm Quadric, which has relationship with our clients. This relationship therefore successfully carried out similar assignments for many became the cornerstone of the bank’s «value based global industry leaders. The bank and Quadric have offer»: responsiveness, humanity and dependability — all jointly conducted a large scale study for the purposes of the features of the bank that now set us apart from our positioning Vozrozhdenie Bank. competitors. The bank’s unique positioning on the market is based on the high quality of our relationships with clients. Stages of development 1991 1993 1995 1997 Foundation of Further Joins VISA Vozrozhdenie’s Vozrozhdenie development International shares trade in Bank. of the branch as associate international network. member. markets as ADRs. Central Bank registered One of the Begins Vozrozhdenie Bank largest in cooperation with with 34 branches Russia cash CIBС. in Moscow Oblast collection and Moscow City. and delivery service established. 1992 1994 1996 1998 Vozrozhdenie receives Vozrozhdenie joins Recognized as a Bank creates foreign exchange S.W.I.F.T. socially valuable ATM network and license from the credit organization establishes own Central Bank, joins Correspondent and joins World processing center. Moscow Interbank banking network Bank development Currency Exchange. established with programs. western banks. Shares listed on RTS. 8 4
    • We decided to revamp our logo in order to get in step with the latest trends in the sphere of visual communications, making it look more dynamic and comprehensive. A series of visuals has been developed, which are now being used in the bank’s marketing. The theme is nature, a symbol of honest personal relationships, productivity, stability and beauty. 1999 2001 2003 2005 Central Bank 10 years! Vozrozhdenie Bank a top evaluates has third largest 3 participant Vozrozhdenie Vozrozhdenie branch network in Government as a stable bank. among 20 largest and is among 200 Housing Finance banks in terms of largest Russian program, 9th corporate credit companies. largest issuer of portfolio. retail mortgages. 17th equity issue raises $33 million. Rated by Standard & Poor’s as most transparent bank in Russia. 2000 2002 2004 14th equity issue ATM network Vozrozhdenie, 2006 triples capital. largest in 10th largest 15 years! Moscow bank in terms CIBC becomes Oblast, of individual Network of a shareholder. 100,000th VISA deposits, 138 offices, card issued. accepted over 400 ATMs Europay into Deposit serves more International Insurance than 900,000 certifies Program. clients. processing center.
    • Our bank Strong positions • Present in 19 regions • 138 locations • Over 400 ATMs • Over 850,000 retail clients • Over 40,000 corporate clients Leading rankings The Central Bank of the Russian Federation has consistently ranked Vozrozhdenie Bank among the leading banks of Russia: Category Rank Number of branches 4 Business with plastic cards 6 Mortgage volume 9 Individual deposits 10 Corporate accounts 18 Corporate loans 24 Total assets 25 (sources: Interfax, RusBusinessConsulting and magazines «Profile», «CredCard», «Expert», «Kommersant Dengi».) Solid ratings • The bank has always been included among the most trustworthy Moscow banks by the independent agency «Rating». • NAUFOR, the National Association of Securities Dealers, ranks Vozrozhdenie Bank among the ‘A’ group of most reliable counterparties. The bank has commissioned creditworthiness ratings from Moody’s Investors Service and their Russian affiliate, Moody’s Interfax Rating Agency: • Moody’s Investors Service - foreign currency deposit rating B1/NP, Financial Strength Rating E+. • Moody’s Interfax Rating Agency – long-term national scale credit rating A1.ru. As the bank’s international obligations are primarily trade finance related and the bank does not borrow internationally, or issue long term bonds or debt obligations in foreign currencies, we have not commissioned ratings from other agencies. 10
    • Key financial highlights Development of branches network number of employees (thousand) number of corporate clients (thousand) number of retail clients (hundreds of thousand) number of offices (RHS) Funds and loans funds of corporate clients loans to corporate clients funds of retail clients loans to retail clients profit before taxes (RHS) Assets and loans loans assets loans/ assets, % (RHS)
    • Industry breakdown of the loan portfolio 2005 12
    • Key operational highlights (as at the end of the year) 2005 2004 2003 Clients Number of legal entities 40,199 37,219 34,240 Number of retail clients 856,000 780,300 608,476 Remote access system Number of clients using Client-Bank system 5,588 4,300 3,072 Bank cards Bank cards issued, thousands 700 537 442 Number of acquiring clients 1,531 869 620 Number of employees 5,083 4,506 4,195 Network of branches Number of offices, including branches, sub-branches, representative offices and cash outlets 138 121 112 ATM network Number of ATM’s 401 303 250 Key financial highlights (IFRS) 2005 2004 2003 $/Russian rubles exchange rate 28.7900 27.7487 29.4545 Financial performance, IFRS Net loans, million rubles 30,774 22,055 16,753 Total assets, million rubles 49,109 30,627 26,775 Equity, million rubles 3,273 2,604 2,160 Net profit, million rubles 544 461 89 Return ROE, % 19% 19% 6% ROA, % 1.36% 1.61% 0.41% Shares Earnings per common share, rubles 28 22 6 Dividends per common share, rubles 0.5 0.5 0.3 Market capitalization, $ million 650 126 62
    • Geographic breakdown of the loan portfolio other regions Moscow region Moscow Loan portfolio and interest income loans to retail clients loans to corporate clients interest income (RHS) Profit and equity operating profit average equity 14
    • Customers’ funds and interest expenses funds of corporate clients funds of retail clients interest expenses (RHS) Return on assets and equity ROAA ROAE Non-interest income other non-interest revenue securities gains FX gains other fees & commissions fees & commisions from cash operations fees & commisions from operations with bank cards fees & commisions from settlement operations
    • 16
    • 15 years of partnership Vozrozhdenie Bank – your partner in development. Corporate business Throughout the past 15 years Vozrozhdenie Bank has been Management of funds providing financial services to corporate clients at the highest The bank offers its clients reliable and efficient services for professional level. These years have seen the development of management of their funds: collection services, the opening a wide range of banking products and services by the bank, and management of current accounts, savings accounts which has always striven to be sensitive to the needs of its and deposit accounts, the issuing of certificates of deposit clients. and promissory notes, securities transactions, brokerage, and trust management. As at the start of 2006, the volume Our relationships with our clients are based on trust, of funds placed by clients in current accounts and savings communication, and mutual respect. Our longstanding accounts, in the form of certificates of deposit and promissory unblemished reputation, financial capacity and individual notes, had grown by 1.7 times to RUR 19.3 billion. approach to every client enable us to establish firm and long lasting partnership relations with entities and businesses. The number of our clients has increased every year. In 2005 this number grew by around 3,000 to 40,199. Industry breakdown of customers’ funds* administrations industry trade construction finance agriculture other * excluding certificates of deposit and promissory notes Anatoliy Falin General Director of JSC Gofron Kashira, Moscow region Enduring friendship lies at the credit facility under the joint very heart of our relationship investment project arranged with Vozrozhdenie Bank. This by Vozrozhdenie Bank and the year we are celebrating our World Bank, we were able to 15th anniversary, and so is purchase Japanese equipment Vozrozhdenie Bank. In the and meet our performance course of these fifteen years targets. We have complete our enterprise has undergone trust in the reliability of our massive restructuring, partnership with Vozrozhdenie which was essential for the Bank. successful development of our business. Thanks to the
    • 15 years of partnership Lending to businesses The bank has been providing loans to businesses for 15 years, Regional cooperation and this remains our primary activity. Our lending services help Throughout the past 15 years the bank has cooperated with the to create new opportunities for the development of our clients’ administrations of Russian cities and regions. The bank has business. The wide variety of credit facilities on offer, ranging entered into long term agreements with many of them. In 2005, from overdrafts to investment loans, means that our clients the bank issued loans to the administrations of Russian cities can choose the facility that is right for them. In 2005 the bank and regions amounting to over RUR 4.4 billion. started providing factoring services, and continued developing its financial leasing services. The bank’s specialists strive to put Despite the nationwide scale and plans for the bank’s together lending packages that are tailored to each individual development, Moscow Region accounts for about half of our client. business, which attests to the great importance of Moscow Region in our strategy. There are 95 branches and 235 ATMs in During 2005, the corporate credit portfolio increased by 28%, to Moscow Region, and over 30,000 corporate clients. RUR 28.9 billion. The number of enterprises that received loans from Vozrozhdenie Bank has grown by 20% over the past year, In 2005 Vozrozhdenie Bank entered into a cooperation and as of 1 January 2006 exceeded 2,000. agreement with the Government of Moscow Region, effective until 2010. Various sectors of the regional economy have In 2005, the bank increased the total guarantee limit of its received RUR 67.9 billion in credit facilities extended, including clients’ obligations to the customs authorities from €24 million over RUR 300 million allocated for the development of housing to €40 million. Guarantees issued in the course of that year and utilities infrastructure. amount to RUR 2.3 billion. Since 1997 Vozrozhdenie Bank has been an authorised In 2005 Vozrozhdenie Bank and the Federal State Strategic bank of the Government of Moscow City. The bank has been Reserve Agency signed a cooperation agreement. Within the successfully cooperating with the Moscow City Department of framework of joint programmes, the bank has issued guarantees Food Supplies in implementing various programmes initiated for RUR 405 million for the repayment of advanced sums and the by the Government of Moscow City. In 2005, guarantees issued performance of contracts by clients involved in delivering public to the enterprises involved in such programmes exceeded RUR contracts. 355 million. The bank is also active in extending subsidised loans, whereby the borrower receives a partial refund from the federal and Payment processing regional budgets of the loan interest paid. In 2005, such loans Individual service, accuracy, and efficiency of settlements are amounted to around RUR 600 million. the factors underlying the choice of more than 40,000 corporate Payments through «Client-Bank» system number of payments electronic payment proportion (RHS) 18
    • clients who use our settlement and collection services, The payroll services offered by Vozrozhdenie Bank have a corporate bank cards, services for the sale and purchase of number of advantages that are beneficial to businesses and major global currencies in exchange for Russian roubles, and their employees: reducing the expenses and labour costs services for the conversion of non-cash foreign currency as- related to the organisation and payment of salaries, reducing sets. The bank has introduced special systems that speed up wasted working hours, and increasing the safety of funds held. the processing of payment documents and help our clients The flexible scheme of tariff plans offered by the bank enables manage their accounts and control fund transfers from their our clients to choose the most convenient program. Thanks to own offices. the advanced, easily accessible network of ATMs, employees can receive their salaries at a convenient location of their The bank’s correspondent network helps us process clients’ choosing. They also enjoy favourable terms for issuing of settlements with any country of the world, and covers 63 Rus- credit cards. sian and 97 foreign banks. The increasing number of credit cards issued to the bank’s In 2005 the number of clients’ payments increased by 40% to clients promotes development of acquiring services. By the over 32 million transactions, and the number of documentary start of 2006, the bank had signed contracts for acquiring transactions effected by the bank on behalf of its clients grew services with 1,531 trade outlets to accept card transactions. by 1.6 times. Services for holding and multi-branch companies Trade finance and international transactions Thanks to the bank’s specific advantages, such as branches When the international agency Moody’s Investors Service in- throughout the country and solid business links in various sec- creased the rating of Vozrozhdenie Bank in 2005, the bank saw tors of the economy, we can offer the branches of holding and new opportunities for raising funds on foreign markets. As at multi-branch companies a set of special services, including the start of 2006, the limits provided by foreign banks in respect credit facilities, settlements effected through the Client-Bank of documentary transactions had increased by 1.7 times to USD system, collection services, payroll schemes, and tailored so- 35 million. In 2005, the bank raised internationally twice the cial programmes. volume of funds to finance its clients’ export and import trans- actions as it did in 2004. One good example is our cooperation with Mostransavto from Moscow Region. The bank’s offices service 49 branches of this In 2005, the bank signed an agreement with the Swedish bank company. The bank’s ATMs are installed at major bus terminals ForeningsSparbanken AB (Swedbank) providing for an export and stations in Moscow Region. Over the past year this com- credit facility to be guaranteed by the Swedish export agency pany has received RUR 2.5 billion in loans for the reconstruc- EKN. This helped bank’s clients finance the purchase of Scania tion of its facilities and the enlargement of its fleet of vehicles, commercial vehicles. The bank can finance imports of equip- and its local branches have leased rolling stock through the ment originating from virtually any OECD country, through the bank. The motor transport enterprises of Mostransavto use our long term credit facilities that are extended by foreign banks. payroll services. A joint special purpose programme has been The export insurance agencies of Austria, Germany, Poland, launched that provides for the extension of mortgage loans to Czech Republic, Hungary, Italy, Luxemburg, Sweden, the USA its employees. To date, 65 mortgage loans have been extended, and Taiwan have confirmed their readiness to insure the credit amounting to over RUR 50 million. risks of foreign banks vis-a-vis Vozrozhdenie Bank. In 2005, the volume of export and import transactions accomplished by the The bank also services 24 branches of Mosobldorremstroy bank’s clients amounted to RUR 48 billion. OJSC. One of the most actively developed areas of cooperation is lending. Payroll services The agreement entered into with Russian Post has helped con- Over 700,000 employees of 2,500 Russian enterprises received siderably to enhance cooperation in Moscow Region in 2005: their salaries in 2005 using cards issued by Vozrozhdenie the bank’s branches provide settlement and collection services Bank. In Moscow Region, 1,500 entities and businesses use our to 18 post offices via the Client-Bank system providing remote payroll services. account management and collection procedures.
    • 15 years of partnership Vozrozhdenie Bank with you. Retail business Vozrozhdenie Bank was among the first commercial banks Loans to start providing services to retail clients, and has long been In 2005 Vozrozhdenie was a leading bank in terms of the growth among top ten financial institutions in retail banking. rate of retail loan products such as mortgages, car loans, consumer loans and credit cards. The size of its retail credit The services we provide are driven by our strategy based portfolio grew by 4 times in 2005, reaching RUR 3.5 billion by on long term relationships with retail clients supported the start of 2006. by a continuous improvement in the quality of services, enhancement of availability, and a high level of personal Mortgage programmes are one of the priority lines of service. To achieve this, we use the latest information and development for the bank’s retail business. In 2005, banking technologies. A new system for servicing private the bank became one of the leading operators of a state individuals is being introduced in the bank’s branches. Every sponsored programme launched by the Housing Mortgage year the bank opens over 20 new branches. The business Lending Agency. The volume of mortgage loans extended hours of our offices servicing private individuals are being as of 1 January 2006 reached RUR 1.3 billion. In 2005 the increased, and the number of employees directly servicing such bank helped more than 2,000 families improve their housing customers is rising. The bank now operates a call centre, which conditions. The growth dynamics of mortgage loans are provides customers with information and advice on banking striking: at the start of 2005 the bank was extending 50 loans products and services (telephone 8-800-200-9-888). Calls to per month, by the end of 2005 the bank was extending over this number are free for customers throughout Russia. 250 loans per month. The monthly number of loans continues to increase. Deposits The bank and its borrowers become long term partners The bank offers a wide variety of special deposits so than — sometimes for up to 30 years. Through discussions with the clients can choose the deposit that best suits their needs. bank’s relationship managers, borrowers can help ensure that In 2005, the volume of funds held by retail clients in their loan terms are suitable for them. In 2005 the bank opened a accounts with the bank increased by 1.7 times, to over RUR special retail office in Moscow where retail clients can receive 24.9 billion. Over 165,000 retail clients keep their savings with professional advice and obtain mortgage loans, car loans, and our bank. consumer loans. The bank is doing its best to make mortgage loans available for all. In 2005 depositors preferred long term deposits extending to 1 year. Deposits such as Zolotoi Larets, Zolotoi Zapas and In 2005 the bank cut its loan interest rates, reduced the down Multivalutny (multi-currency) were in greatest demand. In payment minimum, raised the age limit for borrowers, and recent years, the growth rate of the volume of deposits held increased the terms of loans. The new mortgage conditions with Vozrozhdenie Bank has been above average over the have put mortgages within the reach of many more prospective Russian banking sector. borrowers, from young families to pensioners. Retail customers’ funds deposits card balances current accounts 20
    • The bank and developers operate joint programmes that enable increasing its car loan portfolio by 3.8 times. The unique «3+3» private individuals to buy flats at the construction stage. loan programme was in great demand among customers, as it All the bank’s branches issue mortgage loans to private provides for the extension of car loans on terms of a minimum individuals; Moscow Region, Altai Territory, Volgograd Region monthly repayment. In 2005 the bank started cooperating and Stavropol Territory have seen the fastest growth so far but with a number of major car dealers, including FK Motors, we plan rapid growth in branches in other regions. Nezavisimost, Autotrade AG, and Bavaria-Auto. Within the framework of its car loans programmes, the bank issued loans in 2005 amounting to RUR 510 million, thus Retail loan portfolio mortgages credit cards car loans consumer other Elman Azizov Financial Director of JSC Russian American poultry factory «Elinar-Broiler», Moscow region We chose Vozrozhdenie Bank deposit, crediting. Now we are among the many other banks about to launch our payroll because of its unblemished project. We have witnessed the reputation, and in all the years professionalism of the bank’s of working with it we have employees, their outstanding never had cause to regret efficiency and honesty. These this decision. The bank is our are just some of the factors principal supplier of banking that have led us to regard services: the handling of Vozrozhdenie Bank not just as settlement accounts, the a bank that is «always with placing of freely available you», but also as a bank that cash funds in certificates of is always ready to support you.
    • 15 years of partnership Debit and credit cards one of biggest issuers of bank cards in Russia. The turnover on Vozrozhdenie Bank issues international bank cards supported clients’ cards increased by 1.5 times in 2005, amounting to RUR by payment systems such as Visa International and MasterCard 42.5 billion. International. All current cards are chip-and-pin, in accordance with the requirements of those payment systems. Vozrozhdenie Bank operates an advanced ATM network that as of 1 January 2006 comprised over 400 24-hour ATMs, including Vozrozhdenie Bank started aggressively developing its bank 76 cash-in ATMs. In 2005 the bank significantly enhanced its card business in October 1998, and is now one of the leading ATM network, installing 87 new ATMs. financial institutions in terms of activity and promotion of services in the sphere of payment cards. The bank has been continuously improving its ATM service, enabling its customers to use its ATMs to carry out an ever By the start of 2006, over 700,000 customers were using our greater variety of operations. In 2005 the total number of bank cards. This is clear evidence that Vozrozhdenie Bank is transactions via ATMs exceeded 20 million, of which utility- Efficiency of bank cards operations cards turnover fees & commissions on card operations Development of bank cards business card balances number of cards (RHS) 22
    • ATM network development number of cash-in ATMs number of ATMs bill payments, mobile phone payments and loan repayments Money transfers and payments accounted for 5.5 million. Since Vozrozhdenie Bank is a technology competent bank with a nationwide network of branches in 19 Russian regions, it can Vozrozhdenie Bank issues credit cards to employees of effect bank transfers and arrange payments swiftly and safely. enterprises participating in payroll services. In 2005 over 23,000 employees of such enterprises were provided with credit In 2005 the volume of payments made by retail clients cards on favourable loan terms. increased by 33%, to RUR 8.9 billion, and the volume of transfers via the Western Union system grew by 2.5 times. In Vozrozhdenie Bank was one of the first Russian banks to offer 2005 the bank, striving to meet the needs of customers who its customers remote banking services. The bank’s employees are concerned about the cost of services, started the phased have been continuously updating the information service, connection of its offices to the Contact money transfer system. adding new features that allow our clients to obtain information on the status of their accounts via Internet, mobile or landline Our range of banking products also includes such traditional phones, and to block or unblock their cards. services as safe deposit boxes for valuables, the sale of commemorative and collectable coins, and currency exchange.
    • Transactions on financial markets Transactions on the interbank market To secure additional income and mitigate the risk of credit In 2005 Vozrozhdenie Bank continued to be an active player transactions, the bank has used instruments such as direct on the inter-bank lending market but primarily for liquidity REPO operations (the purchase of securities subject to management. The volume of interbank loans extended in subsequent resale). The turnover of REPO transactions rubles that year increased by 1.6 times compared to 2004, involving government stocks amounted to RUR 10.5 billion, reaching RUR 289 billion. The bank has been investing funds while that on REPO transactions involving subfederal and for terms ranging from 1 day to 1 month. To maintain the bank’s municipal bonds on the MICEX stock exchange reached RUR liquidity, the bank has been placing significant amounts of freely 14.2 billion. available cash funds in deposits with the Bank of Russia. The bank actively uses Bank of Russia bonds as liquidity and yield instrument. Transactions on the securities market In 2005 the bank’s volume of securities market trading increased by RUR 6 billion to RUR 49.6 billion. Over the Exchange transactions past year the bank has been focused on transactions with In 2005 the volume of exchange transactions increased by 1.8 government securities, which account for 80% of the total times to USD 23.8 billion. Transactions on MICEX accounted for volume of securities trading, with the yield on such securities over 70%. being well balanced between the reliability and liquidity of investments. The bank expanded its operations in the regional bonds market, For further information on our bank and its services, please accomplishing transactions involving bonds of Moscow City, visit our website: www.vbank.ru Moscow Region, Leningrad Region, Yaroslavl Region, Voronezh Region, Nizhny Novgorod Region, and other regional issuers. Banking technologies In 2005 the bank installed a new automated banking system The bank has been introducing a software system for at the head office that is capable of handling the full range of automating transactions of retail clients. This will enable functions required to effect banking transactions, and started clients to be serviced at any branch, irrespective of which implementing the same system throughout its branch network. branch the account is held in. This will lead to the optimisation of business processes and a reduction in the costs of supplying banking services. Working In 2005 the bank also began implementing a credit decision in this new automated environment will help to create a system TransactSM, which processes retail loan applications. uniform information space, speed up the banking process, and It was developed with Experian Scorex, a global leader in the improve the quality of service to our clients. area of scoring systems. Within the framework of this project, the bank conducted an audit of its techniques for making loan In 2005 the bank started implementing a CRM system at its decisions strengthen control over credit risk levels. branches. With the launch of this new system, the quality of service to our clients and the efficiency of managers’ work will improve. 24
    • A team of professionals working for your success Over the past 15 years the bank has forged a team of attention paid to the training of young professionals who have professionals that now exceeds 5,000 people. Professionalism, just graduated from leading educational institutions. Over 3,000 integrity, and the ability to work as a unified team, mutual employees of the bank were involved in training events during support — these are qualities that are shared by all members 2005. of the bank’s team. The bank’s employees are also able to upgrade their skills by The principles of responsiveness, humanity and dependability participating in workshops, conferences and training events underpin the business values of Vozrozhdenie Bank and set it organised by external training centres in Moscow and other apart from other banks. These values of Vozrozhdenie Bank Russian cities. Our employees have undergone training in are the driving force behind all the bank’s activities and are spheres such as economics, finance, law, accounting, new practised by all employees in their daily work. To this end, banking technologies, and banking security. the bank runs special training programmes aimed at shaping a corporate culture that is based on the bank’s values. A Our own corporate training workshops and conferences have brochure describing the bank’s values is provided to all also been held for employees. The lecturers and instructors employees. have included specialists and managers from the bank, external advisers and experts, and senior officials of the Bank In 2005 training programmes for Vozrozhdenie Bank employees of Russia and Moscow City Tax Inspectorate. covered all major areas of the banking business, with special The bank’s social mission The guiding principle of Vozrozhdenie Bank is to understand contribution of Moscow Region residents to our great Victory in the needs of our clients and foster relationships that are based World War II. on responsiveness, humanity and dependability. The bank’s participation in municipal and district events has already The bank pays particular attention to issues relating to the become something of a tradition, such as the Day of the City, education and training of young people, supports secondary youth events, forums for businessmen, and charity campaigns. schools, sponsors scholarship programmes for students, and This helps local residents get more closely acquainted with arranges internship programmes at the bank’s branches. The our bank and experience our warm, human approach to our bank maintains close links with the Finance Academy under customers. the Government of Russia, and the President of Vozrozhdenie Bank heads the Finance Academy’s Board of Trustees. The bank takes care of war veterans, and does its best to ensure that the truth about the heroic deeds of our people finds The bank also promotes the development of our culture, and its way into the hearts and minds of our youngsters. In 2005 assists in the renovation of historic monuments. In 2005, in our bank sponsored and organised a 39-part military history particular, the bank assigned funds to the renovation of the television series broadcast by Channel Three, entitled «We Did Cathedral of Christ the Saviour. our Best to Bring this Day Nearer», which was devoted to the
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    • Prospects for the bank’s development in 2006 Our strategy is to develop the bank in a number of key 3. Governance and organization directions while we are focusing on meeting the needs of the We will continue to improve our corporate governance and rapidly expanding corporate and retail sectors of the Russian internal control systems. In 2006 a centralized marketing and economy. To do this, we must effectively focus our resources communications function will be implemented helping to focus on the most promising potential areas for growth and profit. the bank’s brand and maintain a strong corporate culture as Our primary goal is to offer even greater levels of individual the bank expands. We will also develop programmes to further service, provide security for our clients’ funds and help with improvement of our employees’ professional skills. development of their business. 4. Technology strategy 1. Relations with corporate and retail clients During next two years the bank will completely replace its core Developing our business based on long term relations with our technology platform. Our expanding business demands sound clients is fundamental to the bank’s strategy. We put significant operational systems and an effective way of managing our effort into informing and educating our clients so that they client relationships. We are implementing a completely new appreciate the usefulness and value of the bank’s services. core technology platform that will create a uniform information Through these efforts and effective sales and marketing we base, allowing client service at any location, independent plan to increase the value of our corporate client relationships of the branch where the account is held. A relationship by selling existing clients additional products and services management system for retail accounts will allow significant such as alternative financing, transaction and cash services, increases in sales efficiency. Furthermore, technology related and payroll services. Our retail activities are still accelerating enhancements to our risk management practices should in an underserved market. During the next two years we will maintain our low credit loss record. continue to improve our position among the top 10 banks in retail deposits and mortgages. We will also continue to develop financial products based on bank cards. The bank is one of 5. Sales and network strategy the leading Russian banks in terms of the volume and quality As at 1 January 2006, our branch network included 138 of card related services and the number of cards issued will branches and more than 400 ATMs. We plan to expand our exceed 1,000,000 in the next year. The bank services the payroll sales infrastructure so as to make it more convenient for our needs of over 2,500 commercial clients using debit cards and customers to access our services. Every year the bank opens plans to increase this number to at least 3,000 over the next approximately 20 new branches or sub-branches and about 50 two years. new ATMs each year. The focus will continue to be on regions and cities with high potential and growth of independent small and medium sized businesses. In the next two years, we plan 2. Capital strategy to increase the number of ATMs to over 500, expanding the We intend to increase the bank’s capitalisation and liquidity functionality of our ATM-based payment services and equipping of our shares traded on exchanges. We do not envisage any all the bank’s branches with cash-in ATMs. invitation to strategic investors who might change the bank’s independent strategy or well-established brand. The bank has already had 18 issues of new equity and we plan in the near future to issue additional equity to a broad range of professional and individual investors. We want to continue the public, open and diversified structure of our ownership. Management maintains a significant position in the bank’s capital and it is pursuing a development strategy that is aimed at increasing the price of Vozrozhdenie Bank shares and boosting the efficiency of its activities in the interests of all shareholders. We plan continuing increases in efficiency that will reduce our cost/income ratio to 60-65% and increase our profitability to above 20-25%. A good record of earnings, we believe, will also allow us to access new capital from both Russia’s developing domestic capital market and from abroad.
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    • Corporate governance Vozrozhdenie Bank is one of the leading financial institutions principles set out in the Code, the bank has issued a number in the sphere of corporate governance. of internal documents regulating the division of authorities, the competences and accountability of management bodies, The bank maintains high standards of corporate governance the internal control and risk management systems, and is guided by the following principles: respect for and and disclosure rules and procedures. protection of shareholders’ rights, control over assets and economic activities, information transparency, and Since 1991 the bank has been preparing audited financial accountability of management. statements in accordance with both Russian and international standards. In 2005 the international rating agency Standard We have a productive relationship with the International & Poor’s assigned us its highest ranking among top Russian Finance Corporation (IFC), which a few years ago made banks, based on the bank’s information transparency and a positive assessment of the bank’s corporate governance openness. system. The bank was one of the first banks in Russia to adopt a Corporate Governance Code, which contains the fundamental For further information on our corporate governance principles and objectives for improving the effectiveness principles, internal documents, and shareholder and investor of corporate governance — one of the most crucial factors relations, see «Investor relations» on our website: for the stability of the bank’s operations. On the basis of the www.vbank.ru Yuriy Shcherbakov First Vice-president of OOO Holding company Parnas, Saint Petersburg Mutual understanding is prepared to do us a favour. With crucial both in relationships Vozrozhdenie Bank, we speak between people and in the same language. Virtually business. We have established all the bank’s employees great communication and are communicative, friendly, mutual understanding with and always keen to meet Vozrozhdenie Bank. I’ve had your wishes. This is what dealings with other banks, makes Vozrozhdenie Bank so and they have all given the distinctive. impression that our company should count itself blessed and fortunate that they were
    • Corporate governance The governing bodies of the bank The highest governing body of the bank is the General Meeting The Supervisory Council of Shareholders. The General Meeting of Shareholders elects The Supervisory Council of the Bank is responsible for the the Supervisory Council, which is empowered with the general general management of the bank’s activities, except the authority to manage bank’s activities. questions reserved to the exclusive competence of the General Meeting of Shareholders. Management of bank’s operations is executed by a single executive – the Chairman of the Bank’s Management Board The Supervisory Council is empowered to determine the (the President) elected by the General Meeting of Shareholders. strategic policy of the bank, to control its financial and For operational management the Supervisory Council elects economic activities, establish and maintain an effective system a corporate executive body – the Bank’s Management Board. of internal control, secure shareholders’ rights and supervise the activity of the executive bodies. The Bank’s Management Board is responsible for most important decisions regarding operational management of the The Supervisory Council includes 12 members elected by bank’s activities that require joint approval. cumulative voting during the annual General Meeting of Shareholders for a period till the next scheduled annual General Meeting of Shareholders or a special General The General Meeting of Shareholders Meeting of Shareholders with election of new members of the The General Meeting of Shareholders is the highest governing Supervisory Council on its agenda. body of the bank. On June 24, 2005, the General Meeting of Shareholders elected The bank ensures equal participation of all shareholders in the the Supervisory Council of the Bank consisting of 12 members. meeting, their timely notification of the calling of a meeting and also provides them with information and materials necessary As per the requirements of the Bank’s Corporate Governance for making decision on the items on the agenda. Code, the Supervisory Council should include at least three independent members in order to secure objective decision Notification of and basic information about the General Meeting making and to maintain a balance between interests of of Shareholders, including time, place and form of the meeting different groups of shareholders. Criteria of the Supervisory and its agenda are published in the newspaper «Ezhednevnye Council members’ independence are based on the Regulations Novosti: Podmoskovie» and at the bank’s Internet website at on Organization of Trading Activity on the Securities Market least 30 calendar days prior to the scheduled day of the meeting. adopted by The Federal Financial Market Service. 30
    • Members of the Supervisory Council Name, year of birth Positions at the bank and other organizations The portion of the Education bank’s shares owned Yury M. Marinichev Chairman of the Supervisory Council of the Bank; 0.28 Higher, 1937 Chairman of the Moscow Regional Union of the Consumers’ Cooperation Moscow Transport Institute, Moscow S. Ordzhonikidze Institute of Economics Dmitry L. Orlov Chairman of the Bank’s Management Board; 38.36 Higher, 1943 Deputy Chairman of the Supervisory Council of the Bank Moscow Finance Institute Lyudmila A. Goncharova Deputy Chairman of the Bank ‘s Management Board 1.76 Ternopol Institute of Finance 1958 and Economics Alexander V. Dolgopolov Deputy Chairman of the Bank ‘s Management Board 0.56 Higher, 1961 Moscow G. V. Plekhanov Institute of National Economy Boris F. Borin The General Director of Elektrostal Metallurgical Plant, OJSC 0.000002 Higher, 1939 Moscow Institute of Metallurgy, The Academy of National Economy under the USSR Council of Ministers Sergey A. Vybornov General Director of the Investment Group ALROSA, OJSC 0.00 Higher, 1958 Moscow State Institute of International Relations (MGIMO) Alexander I. Goyev General Director of Krasnogorsk S. A. 0.002 Higher, 1947 Zverev Mechanic Industries, OJSC Mogilev Engineering Institute, Academy of National Economy under the USSR Council of Ministers Nikolai Y. Demin General Director of AVK Exima, NPJSC; 0.00 Higher, 1936 General Director of Mikoyan Meat Processing Plant, NPJSC Moscow K. A. Timiryazev Academy of Agriculture Nikolai S. Zatsepin General Director of Mozhaisk Wholesale and Retail Trade Company, NPJSC; 0.20 Higher, 1951 General Director of LLC Edelweiss Moscow Institute of Civil Aviation Engineers Valentina M. Kabanova Retired 0.01 Higher, 1937 The All-Union Financial and Economic Institute Otari L. Margania Senior Vice-President of Vneshtorgbank, OJSC 0.00 Higher, 1959 Leningrad State University Rustem M. Usmanov General Director of Almazyuvelirexport, 0.00 Higher, 1949 state owned foreign trade company Moscow State Institute of International Relations (MGIMO)
    • Corporate governance Members of the Management Board Name, year of birth Positions at the bank The portion of the Education bank’s shares owned Dmitry L. Orlov Chairman of the Bank’s Management Board 38.36 Higher, 1943 Moscow Finance Institute Lyudmila A. Goncharova Deputy Chairman of the Bank’s Management Board 1.76 Higher, 1958 Ternopol Institute of Finance and Economics Alexander V. Dolgopolov Deputy Chairman of the Bank’s Management Board 0.56 Moscow G. V. Plekhanov Institute 1961 of National Economy Mark M. Nakhmanovitch Deputy Chairman of the Bank’s Management Board 0.56 Higher, 1957 Moscow K. A. Timiryazev Academy of Agriculture Yury I. Novikov Deputy Chairman of the Bank’s Management Board; 0.00 Leningrad State University 1962 Head of the Bank’s North-Western Inter-Regional Centre (representative office of the Bank in the North-Western federal district and economic area) Nikolay D. Orlov Deputy Chairman of the Bank’s Management Board 2.44 Higher, 1971 Finance Academy under the Government of Russia Dmitry A. Strashok Deputy Chairman of the Bank’s Management Board 0.30 Higher, 1951 All-Union Institute of Agriculture Tatyana F. Gavrilkina Deputy Chairman of the Bank’s Management Board 0.28 Higher, 1959 Head of Finance Department Moscow Finance Institute Alexander A. Bolvinov Head of HR Department 0.00 Higher, 1962 Moscow State Institute of International Relations (MGIMO) Tamara I. Luzhina Deputy Head of Finance Department 0.29 Higher, 1950 All-Union Institute of Finance and Economics Oleg V. Kharlamov Head of Administrative Department 0.01 Higher, 1938 All-Union Polytechnic Institute Remuneration for members of the bank’s governing bodies Audit Commission There was no compensation fixed for members of the The Audit Commission consists of four members and was Supervisory Council, and no payment was made. elected by the General Meeting of Shareholders on June 24, 2005. The remuneration for members of the executive bodies (salary and bonus) for the year 2005 totaled 112,497 thousand rubles. 32
    • Members of the Internal Audit Commission Name, year of birth Positions at the bank and other organizations The portion of the Education bank’s shares owned Viktor A. Afonin Chairman of the Audit Commission, 0.00 Higher, 1956 Deputy General Director of Almazyuvelirexport (GUPVO) Moscow Finance Institute Tamara N. Lapinskaya Deputy Head of Business Planning and Analysis Division of the Finance 0.005 Higher, 1954 Department, Vozrozhdenie Bank (OJSC) Moscow Finance Institute Svetlana A. Markina Head of Internal Operations Recording Division of the Accounting and 0.001 Specialized Secondary, 1952 Financial Reporting Department, Vozrozhdenie Bank (OJSC) All-Union School of Accounting and Credit Natalya A. Romanenko Head of Monitoring Division of the Corporate Department, Vozrozhdenie 0.00 Higher, 1963 Bank (OJSC) Moscow G. V. Plekhanov Institute of National Economy Auditor of the bank • RUR 70,000,000 in clients’ funds placed as deposits; An independent auditor has audited the bank’s activities since • RUR 7,950,000 in bank guarantees issued; its foundation in the year 1991. The Audit carried out under • RUR 396,970,000 and USD 8,170,000 in contracts for the sale both Russian Accounting Standards (RAS) and International and purchase of certificates of deposit and promissory notes; Financial Reporting Standards (IFRS). • RUR 592,682,000 in contracts for the sale and purchase of precious metals. The official Auditor of the bank is ZAO PricewaterhouseCoopers Audit. The bank entered into such transactions in the course of its normal business operations and on its standard terms. The prices for such interested party transactions were determined Disclosure of interested party transactions in accordance with the Guidelines of Fundamental Principles In 2005 the bank entered into a number of transactions for Management of Resources of Bank Vozrozhdenie (OJSC) involving members of the bank’s executive bodies and that are denominated in Russian Roubles and Foreign the Supervisory Council that are deemed interested party Currencies. transactions under the applicable laws of the Russian Federation. The total volume of interested party transactions The amounts involved in each transaction accomplished by entered into by the bank in 2005 amounted to RUR the bank with a related party did not exceed the upper limit 9,769,153,000 and USD 35,766,000, including: established by resolutions of annual general meetings of the • RUR 6,993,281,000 and USD 25,310,000 in loans extended bank’s shareholders, which is 5% of the balance sheet value to legal entities of assets appearing in the bank’s financial statements as at the • RUR 150,000 and USD 286,000 in loans extended relevant reporting date (Minutes № 1 of 25/06/2004 and Minutes to individuals; № 1 of 24/06/2005). • RUR 1,708,120,000 and USD 2,000,000 in credit facility agreements;
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    • Capital and dividends Structure of the Authorized Capital As at January 01, 2006 the authorized capital of the bank amounted to 200,431,990 Rubles. Shares issued Class of Shares Government registration Face Value Number of shares issued number (Rubles) Common non-documentary registered shares 10101439В 10 18,748,694 Preferred non-documentary registered shares with 20201439В 10 1,294,505 fixed dividends The equity issue under state registration number 20101439В state registration number 10101439В with a face value of RUR was cancelled, due to the terms for converting preferred non- 10 each. (1,999,941 shares under state registration number documentary registered shares with a face value of RUR 10 20101439В were cancelled on the basis of the letter each into common non-documentary registered shares bearing № 33-1-5/3318, issued by the Bank of Russia on 11/05/05.) Alexander Domashenko Deputy General Director of OJSC Rokadovskie Mineralnye Vody (Rokadov Mineral Water), Rostov-on-Don We have met like-minded will have a positive effect on people at Vozrozhdenie Bank. their health. We are grateful Our partnership is aimed at to Vozrozhdenie Bank for their upgrading our production mutual understanding and facilities, increasing our sensitivity, and we believe that capacities, creating new jobs. our cooperation will contribute Thanks to the re-equipment to the development of the of our production facilities, economy and the preservation we have managed to increase of the nation’s health. output considerably. Our high quality water is now available to many more people, and it
    • Capital and dividends Trading floors Name Class of Securities Date of Listing Non-commercial Partnership Common non-documentary registered shares (VZRZ) May 1997 «Stock Exchange «Russian Trade System» (NP RTS) Non-public Joint-Stock Company Common non-documentary registered shares (VZRZ) February 1998 «Moscow Interbank Foreign Preferred non-documentary registered shares with fixed February 1998 Currency Exchange» (MICEX) dividends (VZRZP) Berlin Stock Exchange ADR of first level for common registered shares July 1997 (VZYy.Be, U.S.ISIN US0654531021) Frankfurt Stock Exchange ADR of first level for common registered shares August 1997 (VZYy.F, U.S.ISIN US0654531021) Stuttgart Stock Exchange ADR of first level for common registered shares November 2000 (VZYy.Sg, U.S.ISIN US0654531021) The volume of trade on German stock exchanges during the In total on Russian stock exchanges trades of 366 thousand year 2005 was equal to $ 7,390 thousand. shares were concluded for the amount of 182 million rubles. Active trading in common shares of Vozrozhdenie Bank started The volume of trade on MICEX during the year 2005 totaled in August 2005. At the beginning of 2006 shares were included 92 million rubles and on RTS – $ 3.2 million. into the «B» listing of MICEX. 36
    • Price for Vozrozhdenie Bank’s ADRs on German stock exchanges in 2005 volumes of trade ADR price Price for common shares of Vozrozhdenie Bank on MICEX in 2005 volume price Price for common shares of Vozrozhdenie Bank on NP RTS in 2005 volume price
    • Capital and dividends Shareholders structure On January 01, 2006 8,030 shareholders were registered in the register of Vozrozhdenie Bank shareholders, including 918 legal entities and 7,112 individuals. Shareholders structure as at January 01, 2006 Share in the Authorized Capital (%) Individuals 50.78 Non-residents 12.01 including holders of ADRs 2.74 Other legal entities 36.93 Total legal entities 48.94 Russian Government Agencies 0.28 List of shareholders owning more than 5 percent of bank’s authorized capital as at January 01, 2006 Shareholder Share in the Authorized Capital (%) Dmitry L. Orlov 38.36 Non-public joint-stock company «Depository Clearing Company»* 24.27 Burlington Trading Co Limited 5.25 * Nominee Capital of the bank 01.01.2006 Capital of the bank (Thousands Rubles) 3,273 Number of shares (common & preferred) 20,043,199 Book value per share* 163.3 P/BV** 5.1х * Without subordinated deposits . ** Market price of the shares at MICEX on December 31, 2005 was equal to 840.57 rubles. 38
    • Dividends Dividends on common non-documentary registered shares Dividends on preferred non-documentary registered shares have been paid at a rate of 5% of the share’s face value since with fixed dividends have been paid at a rate of 20% of the the year 2002. share’s face value regularly. Dividends on preferred non-documentary convertible registered shares were paid at the same rate until their conversion into common shares in the year 2005. Report on declared dividend payments on bank’s shares thousand rubles Year Common non-documentary Preferred non-documentary Preferred non-documentary Total registered shares convertible registered shares* registered shares with fixed dividends 2002 5,624.38 999.97 2,589 9,213.35 2003 8,374.38 999.97 2,589 11,963.35 2004 9,374.35 - 2,589 11,963.35 * The equity issue under state registration number 20101439В was cancelled, due to the terms for converting preference non-documentary registered shares with a par value of RUR 10 each into common non-documentary registered shares bearing state registration number 10101439В with a par value of RUR 10 each. According to the resolution of the General Meeting of Registrar of Open joint-stock company Bank Vozrozhdenie: Shareholders (Protocol No. 1 dated 24 June 2005) annual dividends for the year 2004 were declared on shares of all Joint-Stock Company Specialized Registrar AVISTA. classes in the amount of 11,963.35 thousand Rubles. License No. 10-000-1-00271 issued by the Federal Securities Commission on 24 December 2002. Dividends were paid from August 16, 2005 by transferring the relevant amounts to current accounts of corporate shareholders Mailing address: and to personal accounts of individual shareholders according to Luchnikov Pereulok, 7/4, Building 1, 101999 Moscow, the data of the Shareholders Register. In case if banking details Open joint-stock company Bank Vozrozhdenie of individual shareholders were not available dividends were paid (for Moscow branch of JSC AVISTA) in cash at the bank’s offices. Phone: (495) 620-1861. American Depository Receipts (ADR) of first level for common shares of Bank Vozrozhdenie (OJSC) Depository (Issuer of ADR) Custodian Bank The Bank of New York ING Bank (Eurasia) ZAO. Address: The Bank of New York, Address: Krasnaya Presnya Street, 31, Moscow, 123022 Russia. American Depositary Receipt Division Phone: (495) 755-5400 101 Barclay Street, New York, NY, 10286. Fax: (495) 755-5499 Phone: + 1 (212) 815-4493 Fax: + 1 (212) 571-3050 Process Agent Representative Office in Moscow C.T. Corporation System. Address: Posledny Pereulok, 17, Address: 111, Eighth Avenue New York, NY 10011. Office 4, 103045 Moscow. Phone: + 1 (212) 894-8600 Phone: (495) 967-3110 Fax: + 1 (212) 894-8690
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    • Financial statements Auditors’ report on the summarised consolidated Financial statements (IFRS) To the Supervisory Council of Vozrozhdenie Bank: In our opinion, the accompanying consolidated summarised financial statements are consistent, in all material respects, We have audited the consolidated financial statements of with the consolidated financial statements from which these Vozrozhdenie Bank and its associate as at 31 December summarised consolidated financial statements have been 2005, from which these summarised consolidated financial derived. statements were derived, in accordance with International Standards of Auditing. For a better understanding of the Group’s financial position and the results of its operations for the year, and of the scope of In our report dated 31 March 2006 we expressed an opinion our audit, these summarised consolidated financial statements that the consolidated financial statements of the Group (not should be read in conjunction with the consolidated financial attached herewith), from which these summarised consolidated statements, from which these summarised consolidated financial statements have been derived, present fairly, in all financial statements have been derived, and our audit report material respects, the financial position of the Group as at thereon. 31 December 2005 and the results of its operations for the year then ended in accordance with International Financial Moscow, Russian Federation Reporting Standards. 31 March 2006 Zinaida Lukicheva Yaroslavl When I decided to buy my first into the driver’s seat of my car I compared the car loan own car. Now, whenever I take offers of seven different banks. my son for a drive around the The offer of Vozrozhdenie Bank city, I remind myself that this was the most attractive. The has all been made possible by bank’s employees were very Vozrozhdenie Bank. helpful to me. I received clear answers to all my questions, and the documents were processed without delay. In late December 2005 I ceased to be a pedestrian and became a motorist, getting
    • Financial statements Summarised Consolidated Financial Statements Derived from the Audited Consolidated Financial Statements Balance Sheet In millions of Russian roubles 31 December 31 December 2005 2004 (restated) Assets Cash and cash equivalents 8,478 3,964 Mandatory cash balances with the Central Bank of the Russian Federation 923 579 Trading securities 2,342 523 Due from other banks 3,078 946 Loans and advances to customers 30,774 22,055 Premises, equipment and intangible assets 1,972 1,691 Other assets 1,542 869 Total assets 49,109 30,627 Liabilities Due to other banks 113 323 Customer accounts 40,112 24,414 Debt securities in issue 4,131 2,187 Subordinated loans 1,223 698 Exchangeable convertible preference shares - 127 Other liabilities 257 274 Total liabilities 45,836 28,023 Equity Share capital 4,377 4,371 Share premium 1,735 1,610 Revaluation reserve for investment securities available-for-sale - (6) Accumulated deficit (2,839) (3,371) Total equity 3,273 2,604 Total liabilities and equity 49,109 30,627 Approved for issue on 31 March 2006. D.L.Orlov A.A.Novikova President Chief Accountant 42
    • Summarised Consolidated Financial Statements Derived from the Audited Financial Statements Statement of Income In millions of Russian roubles 2005 2004 (restated) Interest income 4,155 3,528 Interest expense (2,044) (1,474) Net interest income 2,111 2,054 Provision for loan impairment (247) (467) Net interest income after provision for loan impairment 1,864 1,587 Gains less losses from trading securities 97 22 Gains less losses from disposal of investment securities available-for-sale 25 - Gains less losses from trading in foreign currencies 168 87 Gains less losses from dealing in precious metals 22 25 Foreign exchange translation (losses net of gains)/gains less losses (28) 7 Fee and commission income 1,514 1,048 Fee and commission expense (82) (65) Losses on initial recognition of assets at rates below market - (15) Gains on initial recognition of liabilities at rates below market - 33 Release of provision for losses on credit related commitments 33 - Losses from disposal of loans and advances to customers - (111) Dividend income 13 16 Other operating income 118 114 Operating income 3,744 2,748 Administrative and other operating expenses (3,037) (2,258) Gain from disposal of subsidiary - 17 Profit before tax 707 507 Income tax expense (163) (46) Profit for the year 544 461 Profit attributable to Equity holders of the Bank 544 444 Minority interest - 17 Profit for the year 544 461 Earnings per share for profit attributable to the equity holders of the Bank, basic (expressed in RR per share) Ordinary and convertible preference shares 28 22 Preference shares with fixed dividend 29 25 Earnings per share for profit attributable to the equity holders of the Bank, diluted (expressed in RR per share) Ordinary and convertible preference shares 28 22 Preference shares with fixed dividend 29 25
    • Financial statements Summarised Consolidated Financial Statements Derived from the Audited Financial Statements Statement of Changes in Equity In millions of Russian roubles Attributable to equity holders of the Bank Minority Total Interest equity Share Share Revaluation Accumulated Total capital premium reserve for deficit investment securities available-for-sale Previously reported balance at 31 December 4,371 1,610 - (3,821) 2,160 65 2,225 2003 Revaluation reserve for investment securities - - (24) 24 - - - available for sale Income tax recorded in equity - - 6 (6) - - - Adjusted balance at 1 January 2004 4,371 1,610 (18) (3,803) 2,160 65 2,225 Available-for-sale investments: - Fair value gains less losses - - 16 - 16 - 16 Income tax recorded in equity - - (4) - (4) - (4) Net income recognised directly in equity - - 12 - 12 - 12 Profit for the year - - - 444 444 17 461 Total recognised income for 2004 - - 12 444 456 17 473 Dividends declared - - - (12) (12) - (12) Disposal of subsidiary - - - - - (82) (82) Balance at 31 December 2004 4,371 1,610 (6) (3,371) 2,604 - 2,604 Available-for-sale investments: - Fair value gains less losses - - 33 - 33 - 33 - Disposals - - (25) - (25) - (25) Income tax recorded in equity - - (2) - (2) - (2) Net income recognised directly in equity - - 6 - 6 - 6 Profit for the year - - - 544 544 - 544 Total recognised income for 2005 - - 6 544 550 - 550 Share issue 6 125 - - 131 - 131 Dividends declared - - - (12) (12) - (12) Balance at 31 December 2005 4,377 1,735 - (2,839) 3,273 - 3,273 44
    • Summarised Consolidated Financial Statements Derived from the Audited Financial Statements Statement of Cash Flows In millions of Russian roubles 2005 2004 Cash flows from operating activities Interest received 4,102 3,525 Interest paid (1,622) (1,400) Net income received from dealing with trading securities 72 30 Net income received from disposal of investment securities available-for-sale 25 - Net income received from trading in foreign currencies 155 87 Net income received from dealing in precious metals 22 25 Fees and commissions received 1,552 1,050 Fees and commissions paid (82) (65) Other operating income received 90 119 Administrative and other operating expenses paid (2,870) (2,130) Income tax paid (182) (14) Cash flows from operating activities before changes in operating assets and liabilities 1,262 1,227 Changes in operating assets and liabilities Net (increase)/decrease in mandatory cash balances with the Central Bank of the Russian Federation (344) 969 Net increase in trading securities (1,780) (208) Net increase in due from other banks (2,112) (553) Net increase in loans and advances to customers (8,673) (6,173) Net increase in other assets (111) (176) Net (decrease)/increase in due to other banks (210) 233 Net increase in customer accounts 15,094 2,220 Net increase in debt securities in issue 1,812 1,331 Net decrease in other liabilities (20) (260) Net cash from/(used in) operating activities 4,918 (1,390) Cash flows from investing activities Acquisition of investment securities available-for-sale (749) (53) Proceeds from disposal of investment securities available-for-sale 290 9 Acquisition of premises, equipment and intangible assets (497) (276) Proceeds from disposal of premises, equipment and intangible assets 16 - Dividend income received 13 16 Net cash used in investing activities (927) (304) Cash flows from financing activities Receipt of subordinated loans 490 290 Dividends paid (12) (12) Net cash from financing activities 478 278 Effect of exchange rate changes on cash and cash equivalents 45 (84) Net increase in cash and cash equivalents 4,514 (1,500) Cash and cash equivalents at the beginning of the year 3,964 5,464 Cash and cash equivalents at the end of the year 8,478 3,964 For a better understanding of the Bank’s financial position and statements, from which these summarised consolidated the results of its operations for the year, and of the scope of financial statements have been derived, and audit report our audit, these summarised consolidated financial statements thereon. Copies of audited consolidated financial statements should be read in conjunction with the consolidated financial can be obtained from Vozrozhdenie Bank.
    • Financial statements Management Commentary to Financial Results under International Financial Reporting Standards for the year 2005 We are very pleased to provide our commentary on the We are expanding our network in order to serve existing business and financial results for 2005. Under International clients better and to attract new clients in regions where we Financial Reporting Standards (IFRS) our profit after tax was see the greatest growth in diverse economic activity. Last year RUR 544 million ($19 million), an increase of 18% from the we added 20 new branches to reach 138. For many individual previous year, and our return on equity was 19%. Earnings per clients the most useful and convenient way of banking is by share were 28 rubles ($0.97). Our equity increased 26% due to using bank machine – ATMs. We installed 87 new ATMs in 2005, retention of earnings and extinguishing the contingent liability most with the ability for clients to deposit cash as well as take relating to our convertible preferred shares, which became it out. This has increased the use of ATMs for payments and common shares in 2005. There is no longer any dilution of other transactions. Last year 20 million transactions, including earnings due to convertible securities. 5.5 million payments, were made using ATMs. We are pleased to note that this is the second year in which Our expansion is reflected in the significant growth of assets, we can fairly say that unusual items do not distort our results which reached $1.7 billion at year-end, a 60% increase from and that our return on equity reflects the underlying strength the previous year. Our retail lending programs, initiated only of the bank’s operations. We have some gains still to make in in 2004, are growing very rapidly and now comprise 11% of terms of efficiency as the business grows and our technology our loan portfolio, up from only 4% the previous year. We are improvements begin to reduce the growth in operating a leading bank in working with the Federal Housing Financing expenses. Although we are close to our targeted return of Agency (AIGK). We have issued 1.3 billion rubles ($45 million) a minimum 20% ROE, we feel that in 2006 we will be able to in new mortgages of which one-third have been refinanced exceed this target return. with AIGK. The Russian economy continues to develop well, with sound Net interest income grew only slightly as margins decreased government fiscal policies. We see significant strengthening in somewhat and a stricter application of IFRS standards required our core markets: independent businesses and retail banking. loan fees, treated as interest income, to be amortized over the Small and medium sized businesses in the regions in which life of the facility. We have also carried a higher proportion we operate are now developing real strength as they mature of lower yielding liquid securities as we rebuilt our liquidity into stable operations. We now provide banking services to which was reduced last year by the summer confidence crisis. over 40,000 companies and are providing a broader range of Our loan portfolio continues to be very sound; the portion of services and support as we build solid relationships with our past due loans was reduced by half and equals only 1.4% of clients. One of the most significant is payroll services. We now the total corporate loan portfolio. Despite the very high growth provide over 700,000 individuals, employees of our commercial of our retail loan portfolio the portion of retail problem loans customers, with debit cards to allow direct payment of their continues to be at the level of 0.2%. We have maintained our monthly salaries. provision for possible losses at a prudent 5% of the portfolio or 1.6 billion rubles ($56 million). Perhaps the greatest changes in the financial system have to do with a greater acceptance by individuals of banks as a Non-interest revenue grew 46% with the largest portion useful and necessary part of their lives. Our business is based contributed by a 449 million ruble ($16 million) increase in on relationships with all clients; for individuals this means not income from corporate and individual fees and commissions for just providing a debit card, but better ways to use their money, banking services. The number of actual banking transactions to save and to borrow. This is appropriate given our position as exceeded 32 million, a 40% increase during the year. The 10th largest bank by deposits from individuals. The consumer bank has issued over 700,000 international debit and credit loan and mortgage programs we initiated in 2004 grew very cards and the volume of funds placed on card accounts and strongly last year and by year-end we were the 9th largest transaction volumes increased by 50% last year. The bank now issuer of new mortgages for purchasing residences. We are provides payroll services to over 2,500 corporate clients. clearly consolidating our position as one of Russia’s top ten retail banks. 46
    • Operating expenses grew 34% as volumes increased and the this year and increasing use of electronic banking by our clients branch network expanded. The bank has 5,100 employees will help us achieve our 60% target within three years. a 13% increase from the previous year primarily due to the expanded branch network. Staff costs make up 56% of Profit before tax increased 35%, however our effective tax rate operating expenses, a slight reduction from the previous year. this year under IFRS increased sharply due to diminution of the Our cost/income ratio, 70%, is high due to investments in new difference between accounting profit and profit for calculation technology and the costs of branch expansion. Increasing of taxes. Taxes increased by 117 million rubles, reducing the efficiency as our core banking technologies are implemented increase in after tax profit to 18%. Financial highlights for 2003 – 2005 Financial Trends IFRS Results RUR (Millions) USD (Millions) 2005 2004 2003 2005 2004 2003 Assets (year-end) 49,109 30,627 26,775 1,706 1,104 909 Average Assets 39,868 28,701 21,679 1,385 1,006 715 Equity (year-end) 3,273 2,604 2,160 114 94 73 Average Equity 2,938 2,382 1,603 102 86 54 Net Interest Income 2,111 2,054 1,133 73 74 39 Provisions 247 467 307 8 17 10 Non-Interest Income 1,880 1,272 1,249 65 46 42 Expenses 3,037 2,258 1,823 105 81 62 Disposal, Restructuring & Inflation 0 -94 -149 0 -3 -5 Profit 707 507 103 25 19 4 Tax 163 46 20 6 2 1 Minority Interest 0 0 6 0 0 0 Profit after tax 544 461 89 19 17 3 Return on Equity 19% 19% 6% Return on Assets 1.36% 1.61% 0.41% Earnings per share 28 r 22 r 6r
    • Financial statements Full IFRS statements, with notes, are posted on the bank’s • evaluation of the fixed assets web-site www.vbank.ru and will also be sent on request to the • calculation of the shareholders’ equity of the bank address investor@comail.voz.ru The differences between interest income and expenses in the The differences between the assets and liabilities of the bank bank’s income statement under the RAS and under IFRS arise under the Russian Accounting Standards (RAS) and under the from the different accounting methods: accounting procedures International Financial Reporting Standards (IFRS) come from according to RAS generally use a cash method of income and the difference in the methods of: expense calculation, while accounting procedures according • calculation of the provisions for possible loan losses to IFRS generally use an accrual method. Financial statements and auditor’s report under Russian Accounting Standards (RAS) Audit report on the Annual Accounting Report and the Published Statutory Annual Report Forms of Open Joint-Stock Company Bank «Vozrozhdenie», prepared on the basis thereof To the Shareholders of Open Joint-Stock Company Bank debts and other assets (hereinafter collectively referred to «Vozrozhdenie»: as «the Published Statutory Annual Report Forms»). The Annual Accounting Report has been prepared by the Bank’s 1. We have audited the accompanying Annual Accounting management on the basis of the accounting reports prepared in Report and the Published Statutory Annual Report Forms accordance with the Russian legislation and the Bank of Russia prepared on the basis thereof of Open Joint-Stock Company regulations. The Published Statutory Annual Report Forms Bank «Vozrozhdenie» (henceforth – «the Bank»), for the have been prepared by the Bank’s management on the basis of period from 1 January 2005 to 31 December 2005 inclusive. the Annual Accounting Report. The Annual Accounting Report In accordance with Bank of Russia Instruction No. 1530-U and the Published Statutory Annual Report Forms, prepared of 17 December 2004 «On the Annual Accounting Reports of on this basis, differ significantly from financial statements Credit Institutions,» the Bank’s Annual Accounting Report prepared in compliance with International Financial Reporting comprises an annual balance sheet, a profit and loss account, Standards, especially with respect to measurement of assets summarized information on movements relating to post and capital, recognition of liabilities, and disclosures. balance sheet events and an explanatory note (hereinafter collectively referred to as «the Annual Accounting Report»). In 2. The preparation and presentation of the Annual Accounting accordance with Bank of Russia Instruction No. 1270-U of 14 Report and the Published Statutory Annual Report Forms is the April 2003 «On the Published Reports of Credit Institutions and responsibility of the Bank’s management. Our responsibility as Banking/Consolidated Groups,» and Bank of Russia Instruction statutory auditors is to express an opinion, based on our audit, No. 1376-U of 16 January 2004 «On the List of Reports, their concerning the proper preparation of these Annual Accounting Format and Procedure for Submission of Reports by Credit Report and the Published Statutory Annual Report Forms in all Institutions to the Central Bank of Russian Federation», the material aspects and regarding the compliance of the Bank’s Bank’s Published Statutory Annual Report Forms comprise accounting procedures with the effective Russian Federation a balance sheet, a profit and loss account, report on a capital legislation and regulations applicable to the activity of credit adequacy level and an amount of provision for doubtful debts institutions in the Russian Federation in all material aspects and other assets, information on composition of participants for the purpose of preparing annual accounting reports and in the bank (consolidated) group, on the equity funds published statutory accounting report forms. adequacy level and on the size of the provision for doubtful 48
    • 3. We conducted our statutory audit in accordance with: procedures with applicable Russian Federation legislation in • federal Law «On Audit Activities» all material aspects for the purpose of preparing an annual • federal Law «On Banks and Banking Activity» accounting report and published statutory annual report forms. • federal Rules (Standards) on Audit Activity • bank of Russia Regulations on activity of credit institutions, 4. In our opinion, the Annual Accounting Report and the and Published Statutory Annual Report Forms of Open Joint-Stock • international Standards on Auditing Company Bank «Vozrozhdenie» attached to this Statutory Audit Report have been properly prepared to present in all material Our statutory audit was planned and performed so as to obtain aspects the Bank’s financial position as at 1 January 2006 reasonable assurance as to whether the Annual Accounting and the financial results of its operations for the period from Report and the Published Statutory Annual Report Forms are 1 January 2005 to 31 December 2005 inclusive in compliance free from material misstatements. Our statutory audit was with Russian Federation regulations applicable to the activity of conducted on a sample basis and included the examination, credit institutions in terms of preparation of annual accounting on a test basis, of evidence supporting the amounts and reports and published statutory annual report forms. disclosures in the Annual Accounting Report and the Published Statutory Annual Report Forms, an assessment of the Bank’s 29 March 2006 accounting principles and techniques used, procedures for preparing the Annual Accounting Report and the Published Director of Statutory Annual Report Forms, an evaluation of significant ZAO PricewaterhouseCoopers Audit estimates made by the Bank’s management as well as the R. Munn overall presentation of the Annual Accounting Report and the Published Statutory Annual Report Forms. We believe that our Auditor statutory audit provides a reasonable basis for our opinion on (Bank Audit Qualification Certificate No. 024038 dated 26 July the proper preparation of these Annual Accounting Report and 2005, with unlimited validity) the Published Statutory Annual Report Forms in all material N.A. Surova aspects, and on the compliance of the Bank’s accounting
    • Financial statements Balance Sheet as of January 1, 2006 (published form) thousand Russian roubles Item 01.01.2006 01.01.2005 ASSETS Cash 2 871 409 2 038 639 Funds of credit institutions at the Central Bank of the Russian Federation 5 197 210 1 500 026 Obligatory provisions 922 727 579 215 Funds at credit institutions 1 331 253 1 003 676 Net investments in traded securities 167 194 0 Net loans 34 529 138 23 639 841 Net investments in investment securities held to maturity 2 170 227 205 259 Net investments in securities available for sale 678 044 566 253 Fixed assets, intangible assets and materials 1 478 743 1 240 489 Interest due to the bank 20 889 25 663 Other assets 361 541 262 571 Total assets 48 805 648 30 482 417 LIABILITIES Loans from the Central Bank of the Russian Federation 0 0 Funds of credit institutions 112 986 323 249 Funds of clients (non-credit institutions) 40 828 022 24 943 152 Deposits of individuals 19 197 979 14 818 504 Debt instruments issued 4 335 182 2 242 354 Interest due by the bank 589 258 250 598 Other liabilities 118 312 232 420 Reserve provision on the possible losses on conditional credit liabilities, other possible losses and on operations with off-shore residents 40 648 12 317 Total liabilities 46 024 408 28 004 090 SOURCES OF EQUITY Shareholders funds 200 432 200 432 Registered common shares 187 487 167 487 Registered preferred shares 12 945 32 945 Unregistered authorized capital of non-stock credit institutions 0 0 Shares repurchased from shareholders 0 0 Share premium 1 418 691 1 418 691 Revaluation of fixed assets 463 713 443 573 Expenses of subsequent periods and expected payments affecting equity capital 978 836 384 234 Funds and retained profit of previous years at the possession of credit institution (unsettled losses of previous years) 786 199 481 994 Profit (loss) for the reporting period 891 041 317 871 Total sources of equity 2 781 240 2 478 327 Total liabilities 48 805 648 30 482 417 OFF-BALANCE LIABILITIES Irrevocable liabilities of the credit institution 7 611 100 4 687 601 Guarantees issued by the credit institution 2 024 573 1 212 096 TRUST ACCOUNTS ASSET ACCOUNTS Cash 0 0 Securities under trust management 0 0 Precious metals 0 0 Loans granted 0 0 Funds used for other purposes 0 0 Settlements regarding trust management 0 0 Accumulated interest (coupon) income on debt securities paid 0 0 Current accounts 0 0 Expenses for trust management 0 0 Losses from trust management 0 0 LIABILITY ACCOUNTS Capital in trust 0 0 Settlements regarding trust management 0 0 Accumulated interest (coupon) income on debt securities received 0 0 Income from trust management 0 0 Profit from trust management 0 0 D.L.Orlov A.A.Novikova President Chief Accountant 50
    • Statement of income as of January 1, 2006 (published form) thousand Russian roubles Item 2005 2004 Interest received and similar income from: Funds placed with other credit organizations 140 099 30 971 Loans, granted to the clients (non-credit organizations) 4 213 654 3 418 678 Financial leasing 0 0 Fixed income securities 81 094 46 801 Other sources 10 924 7 644 Total interest received and similar income 4 445 771 3 504 094 Interest paid and similar expenses on: Attracted funds of credit organizations 14 595 34 042 Attracted funds of clients (non-credit organizations) 1 420 068 1 129 585 Debt securities issued 175 402 134 943 Total interest paid and similar expenses 1 610 065 1 298 570 Net interest and similar income 2 835 706 2 205 524 Net income from operations with securities -41 956 -45 188 Net income from foreign currency operations 155 211 86 837 Net income from operations with precious metals and other financial instruments 28 126 24 505 Net income from revaluation of foreign currency -28 572 737 Commission income 1 551 221 1 049 883 Commission expenses 82 030 64 930 Net income from non-recurring operations -2 387 703 Other net operating income -182 075 -166 155 Administrative and management expenses 2 813 700 2 171 535 Provision for possible losses -92 048 -421 419 Profit before taxation 1 327 496 498 962 Accrued taxes (including income tax) 436 455 181 091 Profit (loss) for the reporting period 891 041 317 871 D.L.Orlov A.A.Novikova President Chief Accountant Statement on the capital adequacy level and available provisions for possible losses on loans and other assets as of January 1, 2006 Item 01.01.2006 01.01.2005 Equity (capital), thousand rubles 4 165 380 3 272 764 Actual capital adequacy level, % 11.0 12.4 Standard capital adequacy level, % 10.0 10.0 Calculated provision for possible losses on loans and similar indebtedness, thousand rubles 1 121 495 1 062 966 Actual provision for possible losses on loans and similar indebtedness, thousand rubles 1 121 497 1 062 966 Calculated provision for possible losses, thousand rubles 32 288 21 090 Actual provision for possible losses, thousand rubles 32 288 21 090 D.L.Orlov A.A.Novikova President Chief Accountant
    • Financial statements Information about the members of the banking (consolidated) group, the level of capital adequacy and the amount of provisions for doubtful loans and other assets as of January 1, 2006 Item Data for reporting period Participants of banking (consolidated) group: Open Joint-Stock Company Vozrozhdenie Bank Garmoniya, Non-State Pension Fund 100.0 Yunost, Public Joint-Stock Company 55.0 Vozrozhdenie-Finance, Limited Liability Company 100.0 MABV GROUP, Limited Liability Company 100.0 Vozrozhdenie-Nedvizhimost’, Limited Liability Company 99.9 Vozrozhdeniye Finance B.V 100.0 Kane, Non-public Joint-Stock Company 99.0 First Investment Corporation, Non-public Joint-Stock Company 100.0 Kaliningradpromproekt, Public Joint-Stock Company 50.9 Murmansk-VTI, Public Joint-Stock Company 50.8 Baltiyskiy Kurort, Limited Liability Company 51.0 Private Guard Enterprise Vozrozhdenie-Center, Limited Liability Company 100.0 Private Guard Enterprise Vozrozhdenie-1, Limited Liability Company 100.0 Private Guard Enterprise Vozrozhdenie-2, Limited Liability Company 100.0 The consolidated balance sheet, the consolidated income statement have not been prepared, the obligatory standards on consolidated basis have not been calculated as the influence of the members of the company group was deemed immaterial. D.L.Orlov A.A.Novikova President Chief Accountant In the opinion of the audit company ZAO Name of the auditing institution: PricewaterhouseCoopers the balance sheet, the income ZAO PricewaterhouseCoopers Audit (ZAO PwC Audit) statement, the report statement on the capital adequacy level and available provisions for possible losses on loans and Certificate of state registration: №008.890 issued by the other assets and the data on the members of the banking Moscow registration chamber on February 28, 1992 (consolidated) group, the level of capital adequacy and the License No. E000376 amount of provisions for doubtful loans and other assets Date of license issue: May 20, 2002 present fairly, in all material respects, the financial position Expiry date of license: May 20, 2007 of Open joint-stock company Bank Vozrozhdenie as at 31 License issuing body: December 2005 in accordance with the Russian legislation. Ministry of Finance of the Russian Federation General Director of audit organisation: Mike Kubena The detailed information on the results of the audit comprising Director: Richard Mann (authorized to sign the audit report the above data are included in the auditor’s statement on by the power of attorney No. P-0685-0704 dated July 1, 2004) the annual accounting report and prepared on the basis of published forms of the annual report of the credit institution as March 29, 2006 at January 1, 2006. 52
    • Risk management Since the bank operates a nationwide network of branches - rating based evaluation of the financial standing of the and performs a wide range of transactions, it operates insurance companies that insure assets put up as security for a centralised risk management system whose primary loans issued by the bank; objectives are to mitigate the risks, set acceptable levels of unavoidable risks, and prevent incidental risks. The bank’s - continuous monitoring of borrowers’ discharging of their Asset and Liability Management Committee is responsible for obligations to the bank; the effective management of assets and liabilities on the basis of a reasonable balance between total assumed risks and - evaluation of the quality and extent of the risks associated the rate of return, tight control over capital adequacy indicators, with loans extended to date; and the determination of the balance structure required to maintain appropriate liquidity levels. Risks are assumed and - procedures for creating provisions to cover possible losses managed at all levels, but they are coordinated centrally and are from loans and other transactions; subject to approved procedures for transactions and fixed limits. - procedures for transferring problem loans to the Loan The bank pursues two objectives in its risk management policy: Monitoring Department and the subsequent handling of such to prevent the assumption of undue risk, and to mitigate loans; unavoidable risks. - procedures for determining and monitoring the credit The bank has adopted «Regulations on Risk Evaluation and authorities of the bank’s branches, and of the relevant Management System within Bank Vozrozhdenie (OJSC)», management bodies at head office, that are related to the which establishes the goals, tasks and principles of the granting of loans; risk evaluation and management system and classifies and defines the major types of risk. Within the framework of - procedures for issuing guarantees, governed by the these Regulations the bank has issued a number of internal Regulations on the Procedures for the bank’s Issuing documents describing the risk management procedures to be of Guarantees. followed by the bank’s business units. Provisions for loan losses (IFRS) Credit exposure Given that loans remain the primary component of the bank’s 2005 2004 2003 assets, the major risk assumed by the bank is connected to the extension of loans. The bank’s loan portfolio is highly diversified Provision for loan impairment at 1,621 1,456 1,043 both by regions and by sectors of industry. The bank puts the end of the year, mln. rubles together a detailed credit file for each individual borrower, and Loans outstanding at the end 32,395 23,511 17,796 carefully monitors compliance with the credit exposure limits of the year, mln. rubles per borrower or group of associated borrowers. including overdue loans, 441 781 1 129 The bank has implemented the following procedures: mln. rubles - mandatory regular monitoring of the financial standing Overdue loans / total loans, % 1.36% 3.32% 6.34% of borrowers, and of the economic effectiveness of credited Provision for loan impairment / 5.00% 6.19% 5.86% programs and projects; total loans, % - impartial evaluation of the liquidity and adequacy of security Provision for loan impairment / 368% 186% 92% that has been put up, by appraisal and insurance companies overdue loans, % accredited by the bank;
    • Risk management Trends of loan portfolio diversification other individuals administrations trade finance transport construction agriculture manufacturing Overdue loans & provisions actual write-offs problem loans provisions provisions/problem loans (RHS) Liquidity risk The bank maintains a liquidity risk that is necessary for the The bank has drawn up a liquidity evaluation and management reliable management of the bank’s assets and liabilities policy that establishes the fundamental concepts, tasks and and that guarantees that we will always be able to meet methods of liquidity management, evaluation methods and the our obligations to depositors and other creditors. The bank division of duties in the bank’s liquidity management. complies with all the Bank of Russia’s requirements with Central Bank Actual figures, % Standard, % 01.01.06 01.01.05 01.01.04 Ratio of highly liquid assets to liabilities payable on demand, N2 min. 15% 50.1 36.3 57 Ratio of liquid assets to total liabilities on-demand and with maturity of min. 50% 63.8 50.7 90.5 less than 30 days, N3 Ratio of all indebtedness to the bank with remaining maturity exceeding max. 120% 105.6 79.3 57.9 one year to total amount of bank’s equity and liabilities with remaining maturity exceeding one year, N4 54
    • respect to the limits on immediate, current and long term Liquidity risk is managed by coordinating the maturities of the liquidity, as established by its Guidelines on Mandatory assets invested and liabilities raised by the bank. The Asset and Requirements for Banks № 110-I of 16/01/04, and maintains Liability Management Committee continuously monitors the even greater limits. liquidity risk management process. Bank’s liquidity position million rubles Ratio of net Assets with maturity of Liabilities with maturity of Net liquidity gap liquidity gap with maturity up to 1 month less more no less more no less more no to the amount 1-6 6 - 12 1-6 6 - 12 1-6 6 - 12 than 1 than 12 stated than 1 than 12 stated than 1 than 12 stated of liabilities month month month month month month month month maturity month month maturity month month maturity with maturity up to 1 month 31.12.2003 8,127 10,170 6,500 3,253 2,577 11,452 6,765 2,829 6,894 83 -3,325 3,405 3,671 -3,641 2,494 -29,0% 31.12.2004 7,389 10,815 6,877 3,548 1,998 11,535 6,765 2,829 6,894 0 -4,146 4,050 4,048 -3,346 1,998 -35,9% 31.12.2005 17,655 11,449 12,671 4,591 2,743 21,444 11,071 10,905 2,416 0 -3,789 378 1,766 2,175 2,743 -17,7% Funds structure million rubles 2005 share 2004 share 2003 share Customer accounts Current/settlement accounts of legal entities 10,780 24.3% 6,924 25.7% 8,156 34.8% Term deposits of legal entities 4,408 9.9% 2,472 9.2% 3,804 16.3% Current/demand accounts of individuals 5,690 12.8% 3,521 13.1% 2,532 10.8% Term deposits of individuals 19,234 43.4% 11,497 42.7% 7,973 34.0% Total customer accounts 40,112 90.4% 24,414 90.7% 22,465 95.9% Due to other banks Current term placements of other banks 92 0.2% 316 1.2% 29 0.1% Correspondent accounts of other banks 21 0.1% 7 0.03% 64 0.3% Total due to other banks 113 0.3% 323 1.2% 93 0.4% Debt securities in issue Promissory notes 3,764 8.5% 1,458 5.4% 751 3.2% Deposit certificates 367 0.8% 729 2.7% 126 0.5% Total debt securities in issue 4,131 9.3% 2,187 8.1% 877 3.7% Total funds 44,356 100% 26,924 100% 23,435 100%
    • Risk management Market risk The primary currency of foreign exchange transactions is the The Asset and Liability Management Committee also monitors US Dollar. The capital based foreign currency position, which the market risk management process. The Committee is the value of foreign currency assets acquired in the course determines the scope and structure of the securities portfolio, of forming the registered capital, amounts to USD 18 million. with a view to extracting profit and maintaining the required level of liquidity. To assess the risk associated with the maintenance of open foreign currency positions, the bank applies the methodology As the total balance sheet value of the bank’s trading portfolio of the Bank of Russia that is set out in the «Regulations on exceeds 6% of the total balance sheet assets, the cumulative the Procedures for the Calculation of Market Risks by Lending market risk indicator determined on the basis of interest, Institutions» № 89-P of 24/09/99. When appraising the foreign stock exchange and foreign exchange risks in accordance currency risk, the bank pays attention to the quality of the with the “Regulations on the Procedures for the Calculation assets denominated in each currency, and in particular, to the of Market Risks by Lending Institutions” №89-P, issued by the quality of the credit portfolio. Bank of Russia on 24/09/1999, is included in the calculation of capital adequacy limits (N1). The management of foreign currency risk is centralised, with a special purpose business unit at the head office in charge of determining open foreign currency position limits Foreign currency risk for each business unit or branch of the bank and monitoring When undertaking foreign exchange transactions the compliance. In this way, the bank can easily control the bank strictly complies with the requirements set out in the acceptable levels of foreign currency risks at the head office «Guidelines on the Implementation of Limits for an Open and the bank’s branches. These limits must be approved by the Foreign Exchange Position and Compliance Monitoring by Deputy Chairman of the Bank’s Management Board. Authorised Banks of the Russian Federation» № 41, issued by the Bank of Russia on 22/05/96. Dynamic of EUR/RUR and USD/RUR rates EUR USD Inflation risk Insolvency risk To keep inflation risk under control, the bank regularly reviews The management of insolvency risk is based on compliance the rates pertaining to resources raised and invested, in with the limits for the adequacy of the bank’s equity (N1), which accordance with the «Guidelines of Fundamental Principles for is the ratio between capital and assets weighted against the Management of Resources of Bank Vozrozhdenie (OJSC)». risk associated. 56
    • Functional risks (strategic risk, technology based risk), and New technologies, hardware and software are normally subject to the risk associated with the introduction of new products and checks and mandatory prior testing, which must be documented. technologies (novelty based risk) New technologies, hardware and software are always tested for The strategic risk resulting from a bank management strategy compliance with internal and external requirements in the sphere that is poorly established or out of step with market conditions of information protection and information security. is assessed and managed by the bank’s highest management bodies, such as the Supervisory Council and the Management The software systems used by the bank have to be duly registered Board. The bank’s highest management bodies and committees and recorded. The bank has made it impossible to use unregistered (such as the Credit and Investment Committee and the Asset and software and hardware, and technological solutions that have not Liability Management Committee) are responsible for monitoring, been certified. implementing and overseeing the bank’s strategic initiatives. The methods used for appraising and managing technology based risk and the risk associated with the introduction of new The methods used for appraising and managing strategic risk technologies include risk monitoring, risk combination, risk include risk monitoring, risk diversification, scenario analysis, distribution, risk diversification, scenario analysis, and risk control. and risk control. The Department for Banking Technologies, a separate business Inefficiency risk unit of the bank, is responsible for appraising and managing Inefficiency risk is connected to the discrepancy between the technology based risk and the risk associated with the introduction bank’s operating expenses and revenues. To minimise this type of new products and technologies. All technological solutions of risk, the bank has implemented a budgeting system. This developed and implemented by the bank have to be documented. system makes it possible to identify the most costly and inefficient The documentation of the various different processes and operations as early as the planning stage, adjust tariff policy, and procedures is performed in accordance with the ARIS methodology, determine the priorities of client policy. Such steps help to ensure which is a system and process based corporate process that the growth of non-interest income always outstrips the growth description standard that enables comprehensive classification of non-interest expenses. and identification.
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    • Background information Offices of Vozrozhdenie Bank If you would like to know more about Vozrozhdenie Bank, you are very welcome to come and talk to us. Visit our nearest branch. We look forward to meeting you. Contact details of Vozrozhdenie Bank: Bank Identification Code (BIC): 044525181 Tax Identification number (INN): 5000001042 Correspondent account with OPERU of Moscow GTU of the Bank of Russia N 30101810900000000181 Call-center: 8-800-200-9-888 (calls inside Russia are free of charge) +7-495-777-08-88, + 7-495-620-18-88 Fax: + 7-495-620-19-99 Telex: 414680VBNK RU Е-mail: vbank@co.voz.ru Website: http://www.vbank.ru Wap: wap.vbank.ru SWIFT: VBNKRUMM REUTER DEALING: VOZM SPRINT: VOZROGD.MOSC/CEA Elena Tishina Barnaul When our twins Kirill and Daniel we found a suitable five room were born it was the happiest flat, we were afraid that we moment in our family’s life. wouldn’t manage to process all But we soon started thinking the documents in time, but the about how crowded it would bank’s employees were brilliant. be in our flat once they started Now that our kids are 18 months growing up. The only way of old, each of them has his own exchanging our flat for a bigger room. one was to get a mortgage. We opted for Vozrozhdenie Bank, as I had come across the bank in my business dealings. When
    • Offices of Vozrozhdenie Bank Offices in Moscow City Offices in Moscow Region Central Branch Balashikha Additional Offices: Additional Office: Mikhnevo 7/4, bldg. 1, Luchnikov Pereulok, 45, Prospekt Lenina, 15, Kirova Proezd, 1, Gorkogo Street, GSP-9, Moscow, 101999 Balashikha, 143907 1, Karla Marksa Street, Kolomna, 140411 Mikhnevo, 142840 Tel: (495) 620-1882 Tel: (495) 525-6048 Elektrostal, 144001 Tel: (4966) 14-3651 Tel. (49664) 7-1937 Mr. Mikhail T. Goghia Ms. Lyubov N. Yukhareva Tel: (49657) 5-4946 Ms. Galina V. Sapronova Krasnogorsk Ilyinsky Additional Office: 21, Krasnaya Street, 38b, Lenina Street, Mozhaisk 7, Leningradsky Prospekt, 4, bldg. 2, Savvinskoye Shosse, Elektrostal, 144005 Krasnogorsk, 143400 4, Krasnyh Partizan Street, Moscow, 125040 Zheleznodorozhniy, 143986 Tel: (49657) 4-6624 Tel: (495) 563-4650 Mozhaisk, 143200 Tel: (495) 725-6137 Tel: (495) 520-3542 Ms. Irina L. Zlenko (49638) 4-4144 Mr. Vakhtang Y. Djariani Istra Ms. Evdokia I. Kovbasenko Bronnitsy 81, Lenina Street, Additional Offices: Ostankinsky 52, Novo-Bronnitskaya Street, Istra, 143500 Additional Office: 31, bldg. 2, Obraztsova Street, Bronnitsy, 140170 Tel: (495) 994-5441 der. Goljevo, 143400, 93, Mira Street, Moscow, 127018 Tel: (49646) 6-5439 Ms. Vera А. Ulitina Krasnogorsk -5 Mozhaisk, 143200 Tel: (495) 689-1166 Ms. Zinaida N. Shepeleva Tel: (495) 561-0825 Tel. (49638) 2-1806 Ms. Natalia V. Barkhotkina Additional Office: Operational Cash Desk: 19, Yubileynaya Street, 8, Rechnaya Street, Naro-Fominsk Ulyanovsky 53, bldg. 1, Komsomolskiy Per., Istra, 143500 Krasnogorsk, 143400 9, Marshala Zhukova Street, 33, bldg. 4, Vesiolaya Street, Bronnitsy, 140170 Tel: (49631) 3-0534 Tel: (495) 564-1184 Naro-Fominsk, 143300 Moscow, 115541 Tel: (49646) 6-8939 Tel. (495) 592-1809 Tel: (495) 325-0616 Kashira Operational Cash Desks: Ms. Nadezhda V. Morozova Ms. Tatiana B. Sukhotskaya Chekhov 12, Sovetskaya Street, 22, Chekhova Street, Kashira, 142900 21a, Lenina Street, Additional Office: Additional Offices: Chekhov, 142300 Tel: (49669) 3-1984 Krasnogorsk, 143400 65, Aprelevskaya Street, Tel: (49672) 2-1893 Ms. Tatiana А. Murashkina Tel: (495) 563-8832 Aprelevka, 143360 Gorky Kolkhoz Building, Molokovo Ms. Raisa P. Petrykina Tel. (495) 436-5122 142714, Leninsk District, Khimki 8, Rechnaya Street, Moscow Region Operational Cash Desk: 22/1, Moskovskaya Street, Krasnogorsk, 143400 Noginsk Tel: (495) 549-1130 8, Vishniovyi Bulvar, Khimki, 141400 Tel: (495) 561-8055 81, Rogozhskaya Street, Chekhov, 142300 Tel: (495) 573-0364 Noginsk, 142400 50, Sovetskaya Street, flat 1, Vidnoye Tel: (49672) 3-5346 Ms. Natalia I. Shabunina GIBDD, Raitsentr-3, Tel. (495) 524-5258 142700, Leninsk District, Krasnogorsk, 143400 Ms. Natalia U. Makarova Moscow Region Dmitrov Additional Offices: Tel: (495) 564-7688 Tel: (495) 541-7845 1, Sovetskaya Pl., Additional Office: Dmitrov, 141800 3, Babakina Street, 26, Zavodskaya Street, 6, Bolshoi Zheleznodorozhny Proezd, 78, Leninskogo Komsomola Pr-t, Tel: (495) 993-9342 Khimki, 141407 Krasnogorsk, 143400 Pavlovsky Posad, 142500 Vidnoye, 142700, Leninsk District, Mr. Vitaly М. Soloviov Tel: (495) 790-7930 Tel: (495) 562-8863 (49643) 2-3133 Moscow Region Tel: (495) 541-7845 Additional Offices: 2, Moskovskaya Street, Kurovskoye Odintsovo Novopodrezkovo, 141431, 52, 40 Let Oktiabria Street, 16, Marshala Zhukova Street, 25, Bogolubova Pr-t, Khimki District Kurovskoye, 142640 Odintsovo, 143000 Dubna, 141980 Tel: (495) 573-0364 (301) Tel: (4964) 11-6212 Tel: (495) 593-5629 Tel: (495) 745-8989 Ms. Marina S. Okuneva Ms. Rimma N. Pankova Operational Cash Desks: 17, Karla Marksa Pl., Additional Office: Additional Office: Taldom, 141900 22/1, Moskovskaya Street, 3, Tsentralny Bulvar, 1, Svobody Street, Tel: (49620) 6-0031 Khimki, 141400 Orekhovo-Zuevo, 142600 Odintsovo, 143000 Tel: (495) 573-0364 (110, 132) Tel: (4964) 16-1076 Tel: (495) 590-7500 Domodedovo 54a, Kashirskoye Shosse, 12a, Lavochkina Street, Lotoshino Podolsk Domodedovo, 142040 Khimki, 141400 (payments to 2, Pochtovaya Street, 11, Kirova Street, Tel: (495) 546-8750 address of Motor Licensing and Lotoshino, 143800 Podolsk, 142100 Ms. Tatiana А. Fomicheva Inspection Department) Tel: (49628) 1-0164 Tel: (495) 333-8401 Tel: (495) 573-0364 (401) Ms. Marina A. Bombach Ms. Valentina А. Ryl’kova Operational Cash Desk: (Deputy Branch Manager) der. Zaborje, 142072, 20a, Mayakovskogo Street, Operational Cash Desk: Domodedovo District Khimki, 141400 (payments to Lukhovitsy 38, Pravdy Street, Tel: (495) 546-8750, (49679) 4-3720 address of the organizations) 4, Gorkogo Street, Podolsk, 142115 Tel: (495) 573-0364 (133) Lukhovitsy, 140500 Tel: (4967) 68-1595 Egorievsk Tel. (49663) 2-4903 106/5, Sovetskaya Street, KIin Mr. Viktor V. Goncharov Pushchino Egorievsk, 140300 8a, Karla Marksa Street, Mikrorayon G, Tel: (49640) 4-3392 KIin, 141600 Lyubertsy Pushchino, 142290 Ms. Lyudmila V. Baykova Tel: (49624) 2-6698 3, Krasnoarmeiskaya Street, Tel: (495) 795-2029 Ms. Olga N. Kalenova Lyubertsy, 140005 Ms. Olga P. Beletskaya Elektrostal Tel. (495) 559-9472 16, Pobedy Street, Kolomna Ms. Lydmila В. Edykova Additional Office: Elektrostal, 144007 340, Oktyabrskoy Revolutsii Street, 33/5/2, bldg. 1, Gagarinsky Per., Tel: (49657) 7-0809 Kolomna, 140408 Additional Office: Moscow, 119002 Ms. Natalia А. Gnedkova Tel: (4966) 12-5523 6, Dmitria Donskogo Pl., Tel: (495) 246-0879 Ms. Lyudmila V. Dorkina (Deputy Dzerzhinskiy, 140091 Branch Manager) Tel. (495) 551-5065 60
    • Vozrozhdenie Bank in Russian Regions
    • Offices of Vozrozhdenie Bank Offices in Moscow Region Offices in Other Regions of Russia Operational Cash Desk: Shatura Additional Office: Barnaul Additional Office: 20, Mikrorayon G, 6, Sportivnaya Street, 36, 1st Sovetskaya Street, 43a, Avtotransportnaya Street, 23, Knipovicha Street, Pushchino, 142290 Shatura, 140700 Shakhovskaya, 143700 Barnaul, 656064, Murmansk, 183038 Tel: (4967) 33-0504 Tel: (49645) 2-1709 Tel: (49637) 3-3441 Altayskiy Kray Tel: (8152) 47-8016 Ms. Yekaterina N. Tarasova Tel: (3852) 46-8620 Pushkino Operational Cash Desk: Ms. Tatiana V. Malakhova Nizhny Novgorod 11, Moskovsky Prospekt, Additional Office: 6, Nerudnaya Street, Sychevo, 106a, Belinskogo Street, Pushkino, 141200 14, Kosyakova Street, Volokolamsk District, 143611 Additional Office: Nizhny Novgorod, 603006 Tel: (495) 993-5859 Roshal, 140730 Tel: (49636) 2-2145 14, Brestskaya Street, Tel: (8312) 78-7662 Ms. Tatiana V. Miklyaeva Tel: (49645) 5-2406 Barnaul, 656015, Ms. Natalya V. Morozova Voskresensk Altaysky Kray Additional Offices: Shchiolkovo 34, Pobedy Street, Tel: (3852) 61-9471 Additional Offices: 5, Lenina Pl., Voskresensk, 140200 32, Pervomayskaya Street, Shchiolkovo, 141100 Tel: (49644) 2-7009 Kaliningrad 1, Efremova Street, Ivanteyevka, 141250 Tel: (495) 526-9341 Ms. Tamara P. Matvienko 12, Sovestky Prospekt, Nizhny Novgorod, 603003 Tel: (49653) 6-2440 Mr. Sergei N. Nikolaev Kaliningrad, 236000 Tel: (8312) 25-3380 Additional Offices: Tel: (4012) 27-9306 3, Sharapovsky Pr., Operational Cash Desks: Ms. Tamara N. Konoplina 1b, Vedenyapina Street, Mytischi, 141006 1, Rossiyskaya Street, Nizhny Novgorod, 603016 Tel: (495) 586-4531 9a, Polevaya Street, Beloozersky, 140250, Khabarovsk Tel: (8312) 93-8143 Fryazino, 141120 Voskresensk District 10, Dikopoltseva Street, 17, Sadovaya Street, Tel: (49656) 7-2678 Tel: (49644) 5-1264 Khabarovsk, 680013 Novorossiysk Pravdinsky, 141200 Tel: (4212) 42-8341 32, Engel’sa Street, Tel: (49653) 1-5560 1a, Talsinskaja Street, 14, Kolomenskaya Street, Mr. Gleb E. Klimenko Novorossiysk, 353900, Shchiolkovo, 141100 Voskresensk-3, 140200 Krasnodarskiy Kray Ramenskoye Tel: (49656) 9-2102 Tel: (49644) 3-3225 Additional Offices: Tel: (8617) 61-0400 3, Krasnoarmeyskaya Street, Mr. Alexandr N. Metelitsa Ramenskoye, 140100 Solnechnogorsk Operational Cash Desk: 210, Prospekt 60 let Oktyabrya, Tel: (495) 556-6994 1, Baranova Street, JSC Voskresensk-Lada premises, Khabarovsk, 680014 Petrozavodsk Ms. Tatiana А. Kostikova Solnechnogorsk, 141500 Novlyansky Block, Tel: (4212) 72-8740 Р.О. Вох 29, 15, Andropova Street, Tel: (495) 994-0756 Voskresensk, 140200 Petrozavodsk, 185028, Additional Office: Ms. Nina P. Aksionova Tel: (49644) 1-2537 19, Molodogvardeyskaja, Republic of Karelia 18/11, Lomonosova Street, Komsomolsk-on-Amur, 681000 Tel: (8142) 76-9858 Zhukovskyi, 140180 Operational Cash Desk: Zaraisk Tel: (4217) 59-1112 Mr. Valery P. Volkhov Tel: (49648) 4-8330 63th km of Leningradskoe shosse, 1, Uritskogo Pl., Solnechnogorsk, 141500 Zaraisk, 140600 Operational Cash Desk: Rostov-on-Don Ruza Tel: (495) 994-0277 Tel: (49666) 2-5832 43, Dzerzhinskogo Street, 97/243, Budionovsky Prospekt, 27, Sotsialisticheskaya Street, Ms. Galina N. Shmatkova Khabarovsk, 680000 Rostov-on-Don, 344011 Ruza, 143100 Stupino Tel: (4212) 74-7828 Tel: (863) 244-2753 (495) 598-1709 56/30a, Andropova Street, Additional Office: Ms. Jana V. Gamaley Ms. Irina G. Potapova Stupino, 142800 4, Yubileyny Mikrorayon, Krasnodar Tel: (49664) 7-5970 Serebryanye Prudy, 142970 324, Severnaya Street, Additional Offices: Operational Cash Desk: Ms. Zinaida G. Kulikova Tel: (49667) 3-1333 Krasnodar, 350000 27, Sotsialisticheskaya Street, Tel: (861) 211-1191 161/2, Taganrogskaya Street, Ruza 143100 Additional Offices: Zvenigorod Ms. Irina G. Chudinova Rostov-on-Don, 344016 Tel: (49627) 2-4234 10, Pochtovaya Street, Tel: (863) 277-3241 bldg. 1, Promyshlennaya Street, Zvenigorod, 143180 Magadan Sergiev Posad Malino, 142850, Stupino District Tel: (495) 992-5467 3, Portovaya Street, 20/1, Sovetskaya Street, 52, Krasnoy Armii Prospekt, Tel: (49664) 5-5474 Ms. Tamara N. Starostina Magadan, 685024 Rostov-on-Don, 344019 Sergiev Posad, 141300 Tel: (41322) 2-2811 Tel: (863) 263-3486 (495) 921-0158 26, Pobedy Pr-t, Ms. Aleksandra А. Usacheva Ms. Tamara D. Teslya Stupino, 142800 30, Kommunisticheskiy Pr-t, Tel: (49664) 4-2475 Makhachkala Rostov-on-Don, 344091 Operational Cash Desk: 4, Pushkina Street, Makhachkala, Tel: (863) 224-9694 51, bldg. 1, Novo-Uglichskoe Sh., Operational Cash Desk: 367012, Dagestan Republic Sergiev Posad, 141300 21, Andropova Street, Tel: (8722) 67-8459 Saransk Tel: (49654) 7-0532 Stupino, 142800 Ms. Natalia В. Pavlova 99a, Gagarina Street, Tel: (49664) 7-1453 Saransk, 430027, Serpukhov Murmansk Republic of Mordovia 3b, Gorkogo Street, Volokolamsk 110a, Kol’sky Prospekt, Tel: (8342) 32-0245 Serpukhov, 142203 10, Oktiabrskaya Pl., Murmansk, 183038 Mr. Sergey V. Naumkin Tel: (4967) 75-0085 Volokolamsk, 143600 Tel: (8152) 24-6300 Ms. Marina А. Grosh (49636) 2-2472 Mr. Valery F. Lysenkov Ms. Aleksandra P. Vasyukova 63
    • Vozrozhdenie Bank in Moscow Region
    • Offices of Vozrozhdenie Bank Offices in Other Regions of Russia Additional Office: 75, Gagarina Street, 33/1, Kommunisticheskaya Volgodonsk, 347386 street, Leninsky district, Tel: (86392) 3-4114 Saransk, 430000, Republic of Mordovia 60, Lenina Street, Tel: (8342) 23-1805 Volgodonsk, 347360 Tel: (86392) 6-1177 St. Petersburg 60, 9th Liniya 124, Morskaja Street, Vasilievskogo Ostrova, Volgodonsk, 347381 St. Petersburg, 199004 Tel: (86392) 7-8768 Tel: (812) 320-4290 Mr. Igor I. Kaplenov 131/1 Lenina Street, Semikarakorsk, Stavropol 346630, Rostov Region 3/1a, Karla Marksa Pr-t, Tel: (86356) 2-2302 Stavropol, 355008 Tel: (8652) 28-2222 33b, Sovetskaya Street, Ms. Tatiana N. Adamenko Tsimlyansk, 347320, Rostov Region Additional Offices: Tel: (86391) 5-0941 1, 123/per. Kirova, Volgograd 357600, Esentuki 11, Nevskaya Street, Tel: (87934) 2-4481 Volgograd, 400087 Tel: (8442) 32-1253 43, Dzerzhinskogo Pr-t, Ms. Sofia В. Zhilina Kislovodsk, 357003 Tel: (87937) 5-0229 Additional Offices: 45, Prospekt Kirova, 20, Prospekt im. V. I. Lenina, Pyatigorsk, 357500 Volgograd, 400131 Tel: (87933) 9-3580 Tel: (8442) 33-9242 26a Yunosti Pr-t, 9, Engelsa Bulvar, Stavropol, 355044 Volgograd, 400112 Tel: (8652) 38-5871 Tel: (8442) 61-0086 Operational Cash Desk: 97, Lenina Prospekt, Volzhsky, 10/12, Oktjabrskojy 404120, Volgograd Region Revolutsii Pr-t, (8443) 27-6036 Stavropol, 355000 Tel: (8652) 29-6406 Yaroslavl 2, bldg. 2, Pushkina Street, Tula Yaroslavl, 150000 5a, Revolutsii Street, Tel: (4852) 72-7635 Tula, 300034 Mr. Aleksander S. Khabarin Tel: (4872) 30-8290 Ms. Aleftina V. Timoshenkova Representative Office in Kaluga 1, Kirova Street, Kaluga, 248001 Volgodonsk Tel: (4842) 54-8656 38а, Velikoy Pobedy Bulvar, Ms. Valentina V. Tsarapkina Volgodonsk, 347371, Rostov Region North-West regional Centre Tel: (86392) 2-8929 80, Bolshoy Prospekt Vasilievskogo Mr. Alexey D. Petrakov Ostrova, St. Petersburg, 119106 Tel: (812) 322-2401 Additional Offices: Mr. Uriy I. Novikov 21, Stroiteley Pr-t, Volgodonsk, 347382 Tel: (86392) 6-6148
    • Bank Vozrozhdenie (OJSC) 7/4, Luchnikov pereulok, bldg. 1, Moscow, GSP, 101990, Russia + 7-495-777-0-888 8-800-200-9-888 (toll-free) www.vbank.ru