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  • 1. Bank Vozrozhdenie Consistent operating results in cooling economy Investor presentation August, 2013
  • 2. This page is intentionally left blank 2
  • 3. Agenda Business model Business overview Recent IFRS results Investment summary 3
  • 4. Over 20 years of successful development Establishment and banking license 9 new regional branches opened 34 branches in the Moscow Oblast Cash collection and delivery services established Joined the World Bank development program Cooperation with CIBC S&P rating Corr. accounts with western banks 1991-1992 License for foreign exchange 1993-1995 Associate member of VISA International Authorized Bank of the Russian Government Joined S.W.I.F.T. Rated by the Central Bank as a stable bank after the financial Crisis CIBC becomes a shareholder 1996-1998 1999-2002 Bank’s ADRs traded on the Frankfurt Stock Exchange Established ATM network and a processing center The 3rd largest branch network Top 3 in the State Mortgage Program Best midcap Russian bank (Big Money) Top 10 by deposits from individuals Top 7 mortgage provider $ 177 mln raised by 20th issue 2003-2004 Top 20 by corporate loan portfolio 17th equity issue raises $33 million Widest ATM network in the Moscow Oblast Joined Deposit Insurance Program Over 100,000 VISA cards issued 3rd by lending to SME $81 mln EBRD financing Top 10 by bank cards issued 2009-2010 2005-2006 2007-2008 Overall rebranding Top 500 world’s banking brands Bank of the Year in Russia in 2010 (The Banker) Best bank IR and best IR professional (Thomson Reuters ) Over 1,550,000 clients CRM system development The most transparent bank in Russia (S&P) Best public company (Secret Firmy Magazine) Best SME bank in Moscow Oblast Best Corporate Governance, Russia (World Finance) Top 10 retail banks in Russia Best IR Management in Russia (Global Banking & Finance review) First MBS deal on Rub 4,1 bln 2011-2012 2013 Alexander Dolgopolov appointed as the Chairman of the Management Board V.Bank launched project on cost efficiency 4
  • 5. Vozrozhdenie Bank - a Community Bank built on strong relationships with SMEs and individual customers Vozrozhdenie Bank strategy… Focus On Core Banking Products Servicing Corporate and SME Customers In Each Stage Of Business Development Servicing retail customers throughout their whole life-cycle Balanced Lending and Funding policy Prudent risk-management policy Increasing efficiency in service delivery …service… … 1 700 000 Retail Clients… … 63 400 Corporate and SME Clients… …via… … 21 Region … 142 Offices … 847 ATMs … 6 173 employees 5
  • 6. Distribution network As of 01.08.2013 Moscow Oblast is a home territory with historically strong market position Branches 34 Sub branches 42 Retail offices 9 Total 85 529 ATMs – every town is under coverage 21 region of presence. Focus on the most attractive South and North-West Branches Sub branches 19 36 Retail offices 2 Total 57 318 ATMs 6
  • 7. Basic information & position in Russian banking system Key Figures, RUB Rankings* 216,168 mln Loans b.p. Net Assets 28 Loans to SMEs Assets 6 Volume of retail deposits 17 Mortgages 9 Corporate loans 21 Bank cards issued 13 Branches/ATMs 38/19 166,937 mln Customer Funds 169,310 mln Net Income for 1H13 521 mln Shareholders equity 21,351 mln Retail Clients 1,700,000 Corporate Clients Personnel 63,400 6,173 Offices 142 ATMs 847 * RBC most recent rankings 7
  • 8. Market recognition Credit ratings Listing Moody’s Ba3/D-/NP, stable Included in indices Standard&Poor’s BB-/ruAA-, stable Listing MICEX Financial Index A1 MICEX High recognition of brand Moody's S&P Aaa 25 Aa 22 AAA Moody's Interfax S&P national scale Baa 16 B 10 Caa 7 AA ruAA- A 19 Ba 13 Aa3.ru Moody's World Finance V.Bank was awarded for the “Best Corporate Governance, Russia”, according to World Finance survey The Banker V.Bank – “The Bank of the year 2010 in Russia” as per the survey of The Banker magazine A BBB Ba3 BB S&P international BB- 01.01.06 01.12.06 01.11.07 01.10.08 01.09.09 01.08.10 01.07.11 01.06.12 B CCC IPSOS survey 85% of respondents in our regions know us TNS loyalty survey Loyalty index equals top 10% of major international banks 94% of our clients are ready to recommend us BrandFinance Banking 500 survey V.bank ranks among top-10 Russian most valuable banking brands with brand value of $190 million 8
  • 9. Business model 9
  • 10. Market strategy Balanced Credit and Resource policies Personal bank for corporate and retail customers Focus on core banking products Corporate clients Retail customers Servicing on each stage of business development Servicing throughout their whole life-cycle Customer acquisition Expansion of branches and ATMs network Growth of individual depositors and borrowers number Payrolls combine retail and corporate segments 10
  • 11. Business model Business based on relationships… … gives stable non-interest income RUB bln - Customer oriented organic growth 3 773 - Conservative balance sheet Non-interest income 3 875 3 743 Net interest income 3 490 3 667 38% 39% 40% 42% 36% 60% 58% 64% 62% 61% Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 - Primarily deposit funded - Focused regional structure - Increasing efficiency in service delivery Loan portfolio development… … funded by customer accounts RUB bln RUB bln Note: all loans are gross loans Retail loans Interest-bearing Deposits Interest-free Current accounts Corporate loans 152 28 124 Q2'12 151 156 164 167 164 163 169 33 91 98 131 Q3'12 Q4'12 Q1'13 37 57 53 56 33% 130 67% Q2'13 151 40 101 31 152 51 34 103 107 110 113 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 22% 78% 11
  • 12. Assets and liabilities Interest-earning assets growth lagging… RUB bln 194 195 32 33 0,4 0,4 12 12 40 37 41 6 216 210 209 1 8 …strong inflow of customer deposits 1 11 12 RUB bln Cash and equivalents Due from banks 209 194 210 216 57 195 53 56 48 51 138 142 137 149 IEA: 76% 150 12 12 12 13 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Continuous widening of funding base… Corporate deposits Corporate accounts Retail deposits Retail accounts 103 107 88 53 20 8 Q2'12 Other assets 12 Due to other banks 74 3 20 Loan portfolio Q3'12 101 IBL: 88% 110 IBL: 90% 113 Subordinated loans Other liabilities 8 7 7 6 4 21 Q4'12 9 87 3 21 8 7 1 21 Q1'13 Equity Q2'13 …will support future loan expansion RUB bln Gross loans Customer funds 100% 95% +3,6% 19 Term deposits Securities issued Securities IEA: 77% Current accounts L/D ratio 101% 99% +3 21 18 35 +6 20 36 RUB bln 36 32 18 30 77 78 81 84 87 24 25 26 26 26 151 151 156 164 164 163 167 169 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'12 Q4'12 Q1'13 Q2'13 12
  • 13. Loan portfolio Corporate book stalled with some realigning inside SME Large corporates 2 1 2 41 Administrations 45 RUB bln Retail portfolio – key driver of growth Mortgages Consumer and car loans 1 +3.9 new loans -1.5 repayment 46 51 2,1 2,1 83 77 77 2,1 8,5 2,1 8,4 2.6 – outgrew SME bracket and moved to large corps 8,7 78 20,8 22,3 22,8 Q2 2013 Q3'12 Q4'12 Q4 2012 Q1 2013 Enhanced cross-selling to existing clients Introduction of new mortgage program in March’13 Q1'13 +8.8 new loans -11.4 repayment Q3 2012 RUB bln Credit cards 9,8 24,9 Q2'13 Loans to large corporates - segment with high risk profile - are well-diversified Other Moscow Oblast 24% South regions as of June 30, 2013 12% Transport 8% Agriculture 33% RUB 50.8 bln 24% North-West regions Construction 7% 9% Manufacturing RUB 50.8 bln 44% 2% 16% Moscow 3% 18% Other regions Wholesale & retail trade 13
  • 14. Who are SMEs? What is our SME Definitions Segment Large business Medium-size and small businesses Micro businesses Total credit exposure, RUB mln > 750 30 - 750 6 - 30 Food processing – factories manufacturing different types of high-quality food and drinks. Petrol stations networks – complex service of high-quality petrol, minimarkets and café, car washes and technical services. Pharmacies networks – still healthy demand both for beauty products and medicines. Food retailers– small chains of handy stores “Close-to-House” style for daily shopping located in dormitory area with high density of population. 14
  • 15. Corporate business Corporate lending – focus remains on SMEs… SMEs Large corporations RUB bln Other …with 70% of loans less than RUB 0,75 bln issued to 98% of clients * as of December 31, 2012 80,00% 73% -0,4% 124 120 43 41 124 131 Share of portfolio Share of clients 70,00% 130 60,00% 45 46 51 39% 43% 50,00% 40,00% 32% 30,00% 78 77 77 83 78 60% 20,00% 14% 13% 15% 10% 10,00% 3 Q2'12 2 Q3'12 2 Q4'12 1 Q1'13 1 Q2'13 1% 62 +2.2% 30 60 RUR RUB bln 62 66,0 55 32 100-750 mln more than 750 mln …mostly nominated in RUB Current Accounts 56 30-100 mln up to 30 mln Corporate funding... Term Deposits 2% 0,00% FX 64,0 * under RAS 62,7 66,0 5,0 4,4 4,6 65,0 4,4 59,6 36 35 36 24 25 26 26 26 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 4,5 58,2 61,0 60,6 59,7 01.04.13 01.05.13 01.06.13 01.07.13 01.08.13 7.2% 58% 42% 15
  • 16. Conservative risk profile Credit policy sticks to reliable collateral… RUB bln ….providing mostly working capital… *as of June 30, 2013 *as of June 30, 2013 Loan amount Collateral value Corporate portfolio Average LTV: 55%* 112 71% 30,1% 24,4% 56 56 54 16,9% 13,5% 29 3 14 4 Government guarantees Real Estate Equipment & Vehicle Guarantees *Guarantees are not taken into account 12 3,2% Other collateral& blank …in the same currency as SMEs revenues… FX loans RUB loans 131 14,9 14,5 131 14,8 130 15,5 132 15,4 up to 30 days 31-90 days 91-180 days Agriculture 11.6% 3% 5% 115,9 114,1 01.06.13 01.07.13 01.08.13 Manufacturing RUB 166.9 bln 22% 1% 01.05.13 *as of June 30, 2013 29% 117,1 Wholesale & retail trade 01.04.13 > 2 years 6% 3% 7% 1% 115,2 1 - 2 years Other Real estate Transport Construction 116,6 181 - 365 days …maintaining industry diversification RUB bln 130 11,9% 27 22% Retail Administrations 16
  • 17. Retail lending – promising segment Retail loan book changes (IFRS) Credit cards Mortgages 25,9 Retail loans maturity RUB bln Consumer loans Car loans 28,3 31,4 32,8 33,6 *as of June 30, 2013 Primarily mortgages under state-related agency JSC “AHML” standards Retail portfolio High-margin consumer loans to customers with apparent cash-flow –management of corporate clients 84,2% 24,9 20,8 22,3 22,8 2,1 0,4 7,2 2,1 0,4 2,1 0,4 2,1 0,4 2,1 0,4 8,0 8,1 8,3 9,4 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 18,5 11,9% 1,0% up to 90 days Currency breakdown (RAS) 2,9% 91-365 days 26,7 0,4 Consumer loans, RUB RUB loans 27,7 0,4 29,0 0,7 > 2 years Rates for retail loans RUB bln FX loans 1 - 2 years 30,2 0,4 31,7 0,4 Mortgages, RUB 1.4% 25 Credit cards, RUB 20 15 26,3 13,4 28,6 29,9 31,3 We plan to further expand retail portfolio, which was an important growth driver in the recent years 10 Particular focus is on mortgages as the most perspective segment 01.04.13 01.05.13 01.06.13 01.07.13 01.08.13 01.07.10 01.01.11 01.07.11 01.01.12 01.07.12 01.01.13 5 01.07.13 17
  • 18. Card business – reliable source of non-interest income Business strategy… …Generates strong fee income Corporate clients Retail clients Interest 3% 14% 22% 18% - Self-service transactions - Payrolls - Acquiring - Credit cards …developing key card product - payrolls Debit cards 82% 22% cash operations Visa and Mastercard self-service 39% Fees & commissions payrolls 1 Key points Q3 2012 Payrolls 70% acquiring Q4 2012 Q1 2013 Q2 2013 13,500 14,000 14,200 - Payrolls is the main tool for client base growth with strong potential – 63,400 of existing corporate clients and 17,000 installed “client-bank” systems 14,200 1,360,845 1,381,959 1,360,308 1,331,515 Credit cards 45,471 46,646 48,297 50,470 ATMs 812 - Offering cards only to existing corporate clients: credit cards for owners, top and mid-level managers and specialists, debit cards for personnel - Pushing cross-sales between retail and corporate 819 838 844 18
  • 19. Risk management 19
  • 20. Risk management Balance sheet structure Capital position enhanced by subordination Tier 1 Tier 1 + Tier 2 14,2% 13,2% 12,3% 12,1% 11,6% RUB bln 14,9% 14,8% 14,6% Assets Liabilities 80 70 11,9% 11,7% 12,0% 11% MIN 60 50 40 30 20 10 0 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 01.07.13 Demand and less than 1 month CAR (N1) under CBR rules FX structure From 1 to 6 months From 6 to 12 months More than 1 year Interest rate risk Assets Liabilities 6% RUB bln 80 Interest-earning assets Interest-bearing liabilities 70 6% 13% RUB bln 60 13% 50 40 30 20 Roubles 81% US Dollars Other 81% 10 0 Demand and less than 1 month From 1 to 6 months From 6 to 12 months More than 1 year 20
  • 21. Credit quality management NPLs dynamics Annualized cost of risk NPLs, RUB mln * Provisions, % of total portfolio NPLs, % of total portfolio 9,40% 9,52% 9,09% 10,13% 9,54% 9,41% Charges to provisions to avg gross loans, QoQ Charges to provisions to avg gross loans, YtD 10,35% 10,28% 3,12% 2,86% 9,02% 2,46% 2,24% 8,08% 1,83% 2,06% 1,65% 12 297 14 251 14 102 16 879 Q3 2012 Q4 2012 Q1 2013 Q2 2013 1,17% 17 270 Q2 2012 2,79% 2,46% Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 * NPL includes the whole principal of loans at least one day overdue either on principal or interest as well as not overdue loans with signs of impairment NPLs categorization: stable with some FX repricing SMEs Large corporates + Rub 344 mln new NPLs - Rub 177 mln recoveries Retail + Rub 131 mln new NPLs no recoveries + Rub 207 mln new NPLs - Rub 114 mln recoveries 17,6% 16,2% 13,2% 10,4% 10,5% 10,5% 9,8% 10,6% 10,0% 9,9% 9,8% 9,2% 10,0% 8 120 7 841 7 765 7 772 7 939 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 12,2% 10,1% 12,2% 13,3% 14,1% 11,9% 3,6% 8,0% 2,7% 3 400 5 445 5 445 8 098 8 229 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 NPLs, RUB mln Provisions, % of total portfolio 777 3,5% 3,5% 3,1% 2,7% 965 892 3,6% 3,7% 3,0% 3,0% 1 009 1 102 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 NPLs, % of total portfolio 21 15
  • 22. Credit quality as of 30.06.2013 Gross loans, including Current loans RUB mln Large corporates SMEs 50,801 83.8% Past-due but not impaired, of them Mortgages 79,364 90.0% Other retail 24,867 98.1% 11,905 94.6% Total 166,937 89.7% Provisions to NPLs Ratio 98% - 0.1% 1.2% 1.3% 0.3% Less than 90 days - 0.1% 0.4% 1.2% 0.2% Over 90 days - 0.8% 0.1% 0.7% 4.0% Impaired, of them - 16.2% 9.9% Less than 90 days 5.5% 0.5% Over 90 days 10.7% 9.4% 16.2% -14.1% Total NPLs Provisions Net Loans 43,617 0.4% 1.9% 0.7% 3.6% 10.0% 1.9% 5.3% 10.3% -10.6% -2.9% -5.2% 123% 8.1% 70,975 - Provisions to 90 10.0% days+ NPLs 0.1% 24,139 11,288 -10.1% Rescheduled Loans 150,019 5.1% the whole amount of loans with principal overdue for more than 1 day as NPL - well as loans with any delay in interest payments. 22
  • 23. How we address credit quality challenges Key challenges Our response • • To reduce concentration the cap for credit exposure on a new single borrower was cut from 15% to 10% of equity, on a group of borrowers – from 25% to 15% • Exposure to Top-20 Largest groups of borrowers shall not exceed 210% of Capital • The bank established a new division to centralize work with collateral with the following objectives: Review and appraisal of colletarized property Expertise of third-party appraisal Regular monitoring of collateral portfolio Large corporates proved to be the segment with the highest risk-profile, requiring heavy provisioning during the recent quarters Q3 2012 Q4 2012 -32 -67 -67 -337 Q1 2013 -101 -66 Q2 2013 -90-125 - -352 -679 Stage 1 (August 2013) -818 Charges on large corps • Charges on SMEs -1 075 Charges on retail Primary expertise for borrowers with exposure above Rub 150 mln Monitoring of collateral on Top-20 borrowers Stage 2 (October 2013) Workout of bad loans could take several years including all the legal issues, overtake and sale of collateral. Adequate appraisal and liquidity of collateralized property become crucial to smoothen the procedure Primary expertise for borrowers with exposure above Rub 100 mln Monitoring of collateral on borrowers with exposure above Rub 150 mln Stage 3 (January 2014) Primary expertise and monitoring of collateral for borrowers with exposure above Rub 100 mln 23
  • 24. Recent IFRS results 24
  • 25. Financial highlights RUB mln Q2’13 Q1’13 Q-o-Q 1H13 1H12 Y-o-Y Net Interest Income 2,237 2,180 2.6% 4,417 4,411 0.1% Net fee and commission income 1,215 1,107 9.8% 2,322 2,417 -3.9% 155 143 8.4% 298 178 67.4% 3,667 3,490 5.1% 7,157 7,175 -0.3% Operating expenses (2,135) (2,091) 2.1% (4,226) (4,180) 1.1% Charges to provisions including (1,309) (964) 35.8% (2,273) (1,502) 51.3% - provisions for loan impairment (1,290) (985) 31.0% (2,275) (1,188) 91.5% - provisions for impairment of other assets (19) 21 - 2 (314) - Net profit 188 333 -43.5% 521 1,204 -56.7% Trading Income Total operating income b.p. 25
  • 26. NIM stabilized on the back of interest income growth Net interest income improvement Deposit costs raised on the back of gradual repricing Interest Income Interest Expenses 2 262 Corporate term deposits 2 253 2 394 2 180 Retail term deposits Yields on corporate loans Yields on retail loans 2 237 14,9% 4 263 4 461 4 451 4 646 15,4% 14,9% 14,7% 10,8% 10,9% 11,3% 10,6% 10,9% 7,2% 4 118 14,9% 7,6% 6,7% 7,4% 7,7% 6,4% 6,4% 6,5% Q4 2012 Q1 2013 Q2 2013 6,1% -1 856 -2 010 -2 067 -2 271 -2 409 5,8% Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q2 2012 Q3 2012 NIM decomposition Spread dynamics Interest Spread Yield on earning assets (net) Cost of funds 11,2% 11,4% 11,7% 6,7% 6,7% 7,1% 4,4% 4,7% Q2 2012 Q3 2012 11,2% 4,9% 5,0% Q4 2012 Q1 2013 Q2 2013 Other -0,05% -0,19% Base effect -0,07% 6,5% 4,6% +0,35% Deposits 11,5% 6,3% Loans 4,8% 4,6% 4,7% 4,2% Q2 2012 Q3 2012 Q4 2012 4,2% Q1 2013 Q2 2013 26
  • 27. Fees and commissions in focus Fee income rebound New developments in remote banking RUB mln 1 291 125 Payrolls 314 1 320 123 326 +9.8% 136 1 107 355 Options to be introduced in 2013: 1 215 105 • Adding new types of documents 322 Settlements 373 375 376 316 304 384 397 415 317 Other rev. 97 58% of clients use remote banking. 73% of them used more convenient and safe Internet bank as of July 2013, up from 42% in the YE2012. 352 1 324 Cards Cash transactions • Deposit opening • More flexibility in managing operations 422 191 203 192 174 178 Cards -79 Other exp. -17 -85 -19 -100 -93 -110 -50 -22 -40 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q2 2012 Corporate business: Low-cost fee generating products deliver 32% of total operating income adding stability to revenue base Retail and bank card business synergy: “Vbank with you” Internet bank for retail clients with new functions coming in H2 2013 – H1 2014: • Deposit management • Payments to any recipient via Internet • New partnership agreements • Remote sales – tailored decisions for clients 27
  • 28. Cost optimization Strict control over operating expenses 2 421 2 138 2 091 2 051 RUB mln 2 135 Personnel expenses – main burden on C-I-R H1’13 4% 7% 6% 4% 5% 3% RUB 4,2 bln 8% Q2'12 Q3'12 Q4'12 Q1'13 62% Q2'13 Pilots of H1’13 • Centralization of Internet-Bank client support service Release of IT and Security administrators from unusual excessive functions • Uniting cashier and teller functions Speed up of processing client applications • Automation of Internet-Client payments processing 1 manager can process same number of payments like 2 managers before the pilot introduction • FRAUD-analysis and payment controller function for pilot branch moved to HQ • New road map for retail offices Staff costs Administrative expenses Taxes other than income tax Contributions to the State Deposit Insurance Agency Depreciation of premises, equipment and amortisation of intangible assets Other costs relating to premises, equipment and intelligible assets Rent Other Centralization: pilots to be implemented • HR documentation handling • Security Administrators function • Accounts opening • Establishing IT Help Desk/Service Desk • Fixed cash collection routs planning • Credit middle and back office centralized • Work with orders and requests of Federal Bailiffs Service and Federal Tax Service • FX control • Handling payroll services 28
  • 29. Net profit affected by continuous heavy provisioning Operating efficiency Positive operating performance RUB mln Cost-to-Income ratio, % +9.5% Operating profit before provisions and taxes Provisions 72,5% 1,6 1,8 -0,8 Q2’12 1,5 64,8% 1,3 1,4 -1,1 -0,6 -1,0 -1,3 Q3’12 Q4’12 Q1’13 Q2’13 58,5% 2010 2011 59,9% 58,2% 2012 Q1'13 Q2'13 ROA, % ROE, % Operating profit before provisions and taxation/Average equity ROE 36,6% 33,9% 25,8% 26,7% Operating profit before provisions and taxation / Assets ROA 28,8% 3,5% 3,8% 2,6% 2,7% 2,9% 14,0% 11,7% 10,6% 6,3% Q2 2012 Q3 2012 Q4 2012 Q1 2013 1,4% 3,5% Q2 2013 Q2 2012 1,2% Q3 2012 1,1% Q4 2012 0,6% Q1 2013 0,4% Q2 2013 29
  • 30. Capital structure 30
  • 31. Capital structure Share price on MICEX Shareholding structure Structure as of 13.05.2013 Chairman Others 32% 30% Shares More than 8,000 individuals and 1,000 companies are among our shareholders with professional investors owning more than 36% Roubles 100 000 1 800 10 000 1 440 1 000 1 080 100 720 10 360 38% 1 1.8.12 0 1.10.12 1.12.12 1.2.13 Volume 1.4.13 1.6.13 1.8.13 Last price As per MICEX data Volumes of trading (shares) Major shareholders SHAREHOLDER STAKE IN EQUITY Dmitry L. Orlov (Chairman of the Board of Directors) 32.03% 19.67% JPM International Consumer Holding Inc. 9.88% H1 2011 H2 2011 H1 2012 H2 2012 H1 2013 MICEX 744,081 551,544 892,502 1,966,722 535,131 598,489 RTS Otar L. Margania (Member of the Board of Directors) H2 2010 186,333 65,303 82,098 50,437 30,230 9,090 24,054 13,444 3,255 3,685 7,300 3,900 954,468 630,291 977,855 2,020,844 572,661 611,479 German stock exchanges (ADR) Sub-total (stock exchanges) OTC Total 61.58% 1,109,859 1,080,856 2,141,597 873,225 1,421,277 100,610 Total 2,064,327 1,711,147 3,119,452 2,894,069 1,993,938 712,089 *Volume growth associated with strategic deals 31
  • 32. High level of corporate governance MANAGEMENT STRUCTURE CHAIRMAN OF THE MANAGEMENT BOARD* System of control GENERAL MEETING OF SHAREHOLDERS Mr. Alexander Dolgopolov AUDITOR PricewaterhouseCoopers Audit commission BOARD OF DIRECTORS HR and Compensation Committee 12 members Audit committee 9 are non-executive 6 independent Internal Control and Audit Service Risk Management MANAGEMENT BOARD The arrows represent the authorities to appoint or elect the relevant Bank’s bodies and the External Auditor 13 members 5 Deputy Chairmen - Timely information provision to investors - Full disclosure on web-site - Quarterly IFRS financial reporting with web-cast presentations - Financial reports under IFRS audited from 1991 Continuing excellent reputation recognition: - Solid and professional team V.Bank has the Best Corporate Governance in Russia, 2013 Andrey Shalimov was awarded for the Best IR in 2012 V.Bank was awarded as the Bank of the Year in Russia in 2010 Dmitry Orlov is included in top10 of the best bank’s managers 2009 The most shareholder transparent bank in Russia – 2006, 2007, 2008 32
  • 33. Investment Summary SOUND STRATEGY More than 20 years in Top-30 Russian banks amid changing competition landscape Successfully passed through recent crises (199394,1998, 2004, 2008) Business model generating solid fees & commissions (40% of revenue) Organic growth in core regions and client segments Focus on operating efficiency One of the most transparent FI in Russia – Best Corporate Governance by World Finance in 2013, leaders of Information Transparency to Shareholders by S&P in 2008, 2007, 2006 Management Board (13 members) with long-term banking experience, the Board of Directors headed by Chairman with 40 years in Soviet and Russian banking systems BUSINESS STRENGTHS Loyal clientele due to strong relationships with the customers 60% of client base is concentrated in fast growing Moscow Oblast Corporate business focused on high-profitable SME, retail – on mortgages Broad product line based on advanced IT-solutions Financial markets turbulence  Ongoing pressure on lending rates driven by state banks Russian economy slowdown  Limited demand from key risk sector – SME Still high potential credit client  Still high potential credit risk Positive track-record of communication with investors HIGH STANDARDS CURRENT CHALLENGES 33
  • 34. Investor Relations contacts Yulia Vinogradova, Advisor to the Chairman Yu.Vinogradova@voz.ru Elena Mironova, Deputy head of IR E.Mironova@voz.ru Maria Gorbunova, IR specialist M.Gorbunova@voz.ru Download contacts: +7 495 620 90 71 investor@voz.ru http://www.vbank.ru/en/investors Follow us on Twitter: www.twitter.com/vbank_IR Download presentation: 34
  • 35. Disclaimer Some of the information in this presentation may contain projections or other forward-looking statements regarding future events or the future financial performance of Bank Vozrozhdenie (the Bank). Such forward-looking statements are based on numerous assumptions regarding the Bank’s present and future business strategies and the environment in which the Bank will operate in the future. The Bank cautions you that these statements are not guarantees of future performance and involve risks, uncertainties and other important factors that we cannot predict with certainty. Accordingly, our actual outcomes and results may differ materially from what we have expressed or forecasted in the forward-looking statements. These forward-looking statements speak only as at the date of this presentation and are subject to change without notice. We do not intend to update these statements to make them conform with actual results. The Bank is not responsible for statements and forward-looking statements including the following information: - assessment of the Bank’s future operating and financial results as well as forecasts of the present value of future cash flows and related factors; - economic outlook and industry trends; - the Bank’s anticipated capital expenditures and plans relating to expansion of the Bank’s network and development of the new services; - the Bank’s expectations as to its position on the financial market and plans on development of the market segments within which the Bank operates; - the Bank’s expectations as to regulatory changes and assessment of impact of regulatory initiatives on the Bank’s activity. Such forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from those expressed or implied by these forward-looking statements. These risks, uncertainties and other factors include: - risks relating to changes in political, economic and social conditions in Russia as well as changes in global economic conditions; - risks related to Russian legislation, regulation and taxation; - risks relating to the Bank’s activity, including the achievement of the anticipated results, levels of profitability and growth, ability to create and meet demand for the Bank’s services including their promotion, and the ability of the Bank to remain competitive. Many of these factors are beyond the Bank’s ability to control and predict. Given these and other uncertainties the Bank cautions not to place undue reliance on any of the forward-looking statements contained herein or otherwise. The Bank does not undertake any obligations to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required under applicable laws. 35