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Russian

  1. 1. Good Luck Guys! Today we will make a lot of money! Russian & Global Capital Markets Russian Banking System Great Growth Prospectives 11.12.2007 G Andrey Golubev Bad times have passed… Research Analyst Russian & Global Capital Markets Treasury The time has passed since two Russian banking slumps of 1998 and 2004. The confidence in Credit Europe Bank Ltd the Russian banking system is restored. The world has changed. The people have changed. T: +7 (495) 725 40 40 (ext. 7239) The country has changed. The banking system has changed. Now. Transparent. Flexible. F: +7 (495) 725 40 13 Integrated to the world economy. However, somewhat remained unchanged and these are andrey.golubev@crediteurope.ru flagships of the Russian banking system – Sberbank, Gazprombank, VTB. Sberbank is still perceived as the best safe heaven for the population. BLOOMBERG: Andrey Golubev Agolubev2@bloomberg.net Online WEB Research: Now supported by strong macroeconomic environment… http://www.crediteurope.ru/en/research/ It is expected that the Russian banking system will continue its strong growth. Russia possess Online Bloomberg Research: supportive macroeconomic environment to generate such high growth. The growth will be CEBM <GO> supported by increasing real disposable incomes and wealth levels of population. With retail & corporate lending to head the future… Currently the system has highest growth rates in retail loans. Russian mortgage market is at its infant development stage and is likely to show the strong growth in the future. Retail lending is the segment of highest margin & a preferred growth for most Russian banks. Here two types of banks could be distinguished. First are specialized consumer finance banks such as Home Credit and Finance Bank and Russian Standard Bank. Second stands for commercial banks which heavily invest in retail, such as VTB24. Corporate banking shifts the focus from largest to mid-size corporates because large corporate segment is extremely competitive. Russian banks strive (1) to expand as into regions with low level of competition and higher margins (ex., Absolut Bank), (2) to intensify their presence in regions being already there (ex. URSA Bank), (3) to expand into CIS (for example, VTB going to Kazakhstan and Ukraine, Alfa Bank). Retail banking overall remains underdeveloped and offers high further growth potential. In the corporate lending there is a noticeable increasing shift from FX to Russian Ruble denominated loans. www.crediteurope.ru/en/research/ _1_ Credit Europe Bank Ltd. All rights reserved. See terms of Use/Disclaimer on the last page. 50RBKS01 | 0001
  2. 2. With mortgage market to accelerate and join the leaders… Rapidly developing Russian mortgage market is supported by the state which improves regulatory framework and gives guarantees for some mortgage programs. Thus, for example, since 2005 the property under construction is classified as real property. It is necessary to mention also that a lot was done to reduce administrative barriers for mortgage developers and, which is important, there appeared the ability to issue mortgage-backed securities. Banks increased loan terms from previously common 5 years to currently 25-30 years. Interest rates on mortgages are also decreasing. With these four major recent achievements… Among more or less latest achievements we would emphasize the most important following four: (1) The introduction of the unified system of deposits insurance when the State guarantees the safety of banking deposits up to certain amount . (2) The introduction of a mandatory disclosure of effective interest rate (3) The prohibition to change deposit interest rates unilaterally. (4) Noticeable is the trend of consolidation of banks to outgrow competition and gain scale (for example, Raiffeisen Bank - Impexbank). Having following trends and characteristics… (1) Banks are developing very fast branch networks over the whole territory of the country. (2) Spheres of corporate loans and and retail loans will show a considerable growth further. However, corporate loans are expected to grow less than retail loans. The market of mortgage loans will accelerate and join leaders soon. (3) The number of banks is decreasing. The State tightened the control over banks’ operations. (4) Large Russian companies increase funding from international banks and through international and Russian bond issues. (5) Debit cards are widely used in Russia but credit cards are still not widespread. 90 % of all card transaction volumes, both for debit and credit cards are cash withdrawals – the remaining 10% stand for payments for goods and services. Effectively withstood the recent liquidity crisis and became stronger… It is necessary to mention that during the recent liquidity crisis the Russian banking system performed quite well. The turmoil allowed the CBR to take measures to ensure the stability of the Russian banking system. The Central Bank of Russia and the Government improving the system and supporting liquidity… Let us give some credits to the CBR and the government because a lot was really done to improve the liquidity. (1) mandatory reserve requirements for credit institutions were decreased, (2) the Ruble rate for swap operations with the CBR was decreased from 10% to 8%, (3)Lombard/REPO list was extended and there are some bonds which satisfy the requirements of the CBR and will, most probably, soon be included in the list, (4) The CBR started accepting Eurobonds for collateral REPO. www.crediteurope.ru/en/research/ _2_ Credit Europe Bank Ltd. All rights reserved. See terms of Use/Disclaimer on the last page. 50RBKS01 | 0001
  3. 3. The Finance Ministry also made some improving steps… (1) The Federal Budget expenditures increased at the end of this year but at a rate much lower that it was previously promised. But still… increased. (2) Economic statistics for 2007 is strong except for inflation which appeared to be higher than planned. With accelerated inflation triggered from overseas… Accelerated inflation was mostly generated by rising oil and food prices on world markets. And not only Russia faced such high inflation figures, but the US and many other countries as well. However, even such high inflation (and we continue to assume that it will most probably amount closer to 11.2% in 2007) corresponds to much higher than in many other countries growth rate of Russian economy. The CBR introducing new refinancing instruments… The CBR launched three new instruments of refinancing for banks: (1) one-day Lombard loans with the CBR. Previously the CBR had only one week Lombard loans (without auctions) and two-week auctions. The terms under which money could be borrowed correspond to the terms of overnight with the CBR which goes at 10%. Thus, the appearance of this new instrument could be viewed as actual decrease of the refinancing rate because 10%- overnight with the CBR could became needless, (2) one-day (8%) and (3) one-week REPO sessions (7%). Anyway having some weaknesses… (1) Russian banks still have limited experience in managing bad debts. Russian banks have low amount of overdue loans the main supportive reason of which is that strong volume growth mask underlying default rates. (2) The absence of the centralized credit bureau we would add to weak points of the Russian banking system. Well, the fact is that at least one credit bureau exists and banks are required to provide relevant information it, nevertheless large banks tend to protect their own interests and not strive to transparency. With rising costs … Cost / Income ratio is increasing moderately due to rising investments in opening new branches, regional expansion, rising cost of restructuring to improve the corporate structure and management to meet currently fast developing banking environment, increasing costs of qualified banking IT technologies and risk management systems, increasing costs of human resources. Increasing M&A interests… According to rumors four out of five M&A transactions fail in Russia. Despite the growing M&A interest in the banking sphere, there is a significant mismatch of the demand and the supply because Russian banks which are going to sell participation are looking for a minority investor to give him limited rights and get as much possible money from him as possible while selling a participation interest which is often overvalued. International investors and intelligent Russian investors are interested often in acquiring control and investing reasonable funds in transparent and well-managed bank better with already developed retail banking network. www.crediteurope.ru/en/research/ _3_ Credit Europe Bank Ltd. All rights reserved. See terms of Use/Disclaimer on the last page. 50RBKS01 | 0001
  4. 4. With new banking IPOs … This year many talks were held about banking IPOs. Banks prefer to use private placements in order not to give away meaningful information. Banks also prefer to raise equity from several investors without giving away control rights. So, a lot of IPO intentions were announced since the very beginning of this year but little was actually done. IPO of Sberbank and VTB were the only real sparks. Segmented into three major groups … The Russia Banking system could be divided into three sub-segments: (1) Government / Quasi-government owned banks which continues to dominate the banking system and controls more than 50% of the Russian banking market. For example, Sberbank, VTB, Gazprombank, Bank of Moscow. This group can be characterized by having close ties to the government and their decision making is often influenced by political frameworks. (2) Privately owned banks, initially settled often as treasuries for large financial and industrial groups (holdings). For example, Alfa Bank (Alfa Group), Soyuz (Basic Element), MBRD (Sistema), also Rosbank. (3) Banks owned by foreigners. Actively use M&A deals to increase their presence in the Russian banking system. For example, Deutsche Bank, Commerzbank Russia, Reiffeisenbank Austria, Unicredit, Societe Generale, Citibank, etc. But everything is under strict control of regulators… Russian Banking system is under strict control of the CBR. The major law which regulates banking sector is “the Banking Law”. The CBR licenses banks and controls M&A in banking sector. Thus the CBR must be notified of acquisitions of more than 1% of the participation interest in a credit organization and also the CBR must approve the acquisition of more than 20% of the participation interest in a credit organization. The Federal Antimonopoly Service helps the CBR control banking sector. It controls acquisitions of more than 10% of the assets of a credit organization and acquisitions of more than 25% of voting stock in a credit organization. To keep the stability of the system, banks are obliged to meet mandatory reserve requirements and make provisions and loss allowances. Foreign banks are still limited in strengthening their presence in Russia because there are still no procedures for registration of foreign banks’ branches in Russia. Representative offices of foreign banks in Russia only represent interests of foreign banks and are limited to only assist banking operations. ggGggggggg fgfg www.crediteurope.ru/en/research/ _4_ Credit Europe Bank Ltd. All rights reserved. See terms of Use/Disclaimer on the last page. 50RBKS01 | 0001
  5. 5. . Credit Europe Bank Treasury Research Russian Banking System Major Macroeconomic Indicators Macrodymanics Performance of Russian Financial Markets . www.crediteurope.ru/en/research/ _5_ Credit Europe Bank Ltd. All rights reserved. See terms of Use/Disclaimer on the last page. 50RBKS01 | 0001
  6. 6. Russian Banking System - Macroeconomics gg RUSSIAN MAJOR ECONOMIC STATISTICS EUR/USD USD/RUB Date of last Net Ch to 27.0 1.50 Name Last Value Freq Prev % Ch to prev Showing prev 1.48 26.5 1.46 GDP GDP, Nominal Prices, bio USD QoQ 312.4 06/30/2007 Q 268.2 44.2 16.5 1.44 26.0 GDP, Nominal Prices, bio USD YoY 1244,4 1.42 QoQ % 16.5 06/30/2007 Q -13 29.5 1.40 YoY % 21 06/30/2007 Q 16 5.0 25.5 1.38 Real GDP YoY % 7.8 06/30/2007 Q 7.9 0.1 Households Consumption YoY % 12.2 06/30/2007 Q 11.9 0.3 25.0 1.36 Government Consumption YoY % 4.5 06/30/2007 Q 4.4 0.1 1.34 Net Exports YoY % -25.1 06/30/2007 Q -21.9 3.2 1.32 24.5 Exports YoY % 5.2 06/30/2007 Q 3.4 1.8 1.30 Imports YoY % 25.8 06/30/2007 Q 25.5 0.3 Unemployment 24.0 1.28 Unemployment Rate MoM % 1.4 10/31/2007 M 1.5 0.1 Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Unemployment Rate YoY % -11.6 10/31/2007 M -12.3 0.7 Unemployed, mio people 4.4 10/31/2007 M 4.3 0.1 2.3 Total Population, mio people 141.4 12/31/2007 Y 142.1 0.7 0.5 USD/RUB vs. RTSI, since the beginning of 2007, last (green) is 16-Nov Wages and Income 27.0 27.0 Nominal Wages, USD 553.0 10/31/2007 M 558.6 5.6 1.0 y = 3E-13x6 - 2E-10x5 + 2E-08x4 - 6E-08x3 - 0.0002x2 + 0.0072x + 26.075 R2 = 0.7533 MoM % -1.0 10/31/2007 M 3.1 4.1 26.5 26.5 YoY % 23.3 10/31/2007 M 23.9 0.6 Real Wages, MoM % -2.6 10/31/2007 M 2.3 4.9 Real Wages YoY % 11.2 10/31/2007 M 13.3 2.1 26.0 26.0 Disposable income MoM % 0.2 10/31/2007 M 1 0.8 Desposable Income YoY % 14.6 10/31/2007 M 13.7 0.9 25.5 25.5 Retail Sales Nominal, bio USD 40.5 10/31/2007 M 38.4 2.1 5.4 25.0 25.0 Nominal MoM % 5.4 10/31/2007 M 1.2 4.2 Nominal YoY % 30.9 10/31/2007 M 24 6.9 Real MoM % 3.4 10/31/2007 M 0.3 3.1 24.5 24.5 24.4805 Real YoY % 14.6 10/31/2007 M 15.4 0.8 Wholesales 24.0 24.0 Total, bio USD 87.0 09/30/2007 M 85.0 2.0 2.4 1725 1809 1843 1867 1895 1912 1928 1964 2000 2072 2189 MoM % 2.4 09/30/2007 M 0.8 1.6 YoY % 22.7 09/30/2007 M 20.3 2.4 Car Sales Number of cars 138700 10/31/2007 M 125914 12786 10.2 MAJOR CURRENCIES vs. RUB, 1 MONTH, % CHANGE 6 6 Foreign Trade (Acc. to the CBR) Export, bio USD 29.9 09/30/2007 M 30.9 1.0 3.3 4 4 Import, bio USD 18.7 09/30/2007 M 19.9 1.2 5.9 Balance, bio USD 11.2 09/30/2007 M 11.1 0.1 1.2 2 2 Current Account, bio USD Current Account, Total 16.1 06/30/2007 Q 22.9 6.8 29.5 0 0 Trade Net 31.8 06/30/2007 Q 29.0 2.8 9.8 Export 84.3 06/30/2007 Q 72.1 12.2 16.9 2 2 Oil 29.0 06/30/2007 Q 23.4 5.6 23.9 Oil Products 11.9 06/30/2007 Q 10.0 1.9 19.2 4 4 Gas 9.9 06/30/2007 Q 10.5 0.7 6.6 Imports -52.4 06/30/2007 Q -43.1 9.3 21.6 6 6 Services Net -4.7 06/30/2007 Q -3.2 1.4 43.7 Export 9.2 06/30/2007 Q 7.6 1.6 21.7 8 8 Imports -13.9 06/30/2007 Q -10.8 3.1 28.3 EUR GBP JPY CHF USD AUD NZD CAD TRY MXN BRL MYR Capital&Finanacial Account, bio USD 45.9 06/30/2007 Q 15.3 30.6 200.5 Capital Account, bio USD 0.2 06/30/2007 Q -0.9 1.0 117.7 Financial Account, bio USD 45.7 06/30/2007 Q 16.2 29.6 183.2 RCBI Index MosPrime o/n MosPrime 1W MosPrime 2W Foreign Investment 12 MosPrime 1M Libor USD 1W Libor EUR 1W 102 Level, bio USD 87.9 09/30/2007 Q 60.3 27.6 45.7 YoY % 150 09/30/2007 Q 160 10 10 including: FDI, bio USD 19.6 09/30/2007 Q 15.8 3.8 24.0 8 101 YoY % 91.3 09/30/2007 Q 150 58.7 Portfolio Investment, bio USD 1.5 09/30/2007 Q 1.1 0.4 40.3 6 YoY % 130 09/30/2007 Q 120 10 including: 4 100 Shares, bio USD 1.5 09/30/2007 Q 1.1 0.4 36.0 YoY % 140 09/30/2007 Q 120 20.0 2 Bonds, bio USD 0.1 12/31/2005 Q 0.1 0.0 21.4 YoY % 400 12/31/2005 Q 550 150 0 99 Trade credits, bio USD 8.5 09/30/2007 Q 4.8 3.7 76.8 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 YoY % 21.9 09/30/2007 Q 8.6 13.3 Including: Short-term credits, bio USD 2.5 09/30/2007 Q 7.7 5.3 68.1 YoY % 30.9 09/30/2007 Q 350 319.1 Russia30 Brazil10 Turkey 09 Long-term credits, bio USD 55.2 09/30/2007 Q 30.6 24.7 80.8 8 Russia 10 Turkey 30 UST10 8 YoY % 260 09/30/2007 Q 200 60 Other loans, bio USD 0.5 09/30/2007 Q 0.3 0.2 83.1 7 7 YoY % 130 09/30/2007 Q 250 120 Money Supply M0, Level, bio USD 133.1 10/31/2007 M 131.6 1.6 1.2 6 6 MoM % 1.2 10/31/2007 M 1.6 0.4 YoY % 52.2 10/31/2007 M 54.6 2.4 M2, Level, bio USD 466.5 10/31/2007 M 469.5 3.0 0.6 5 5 MoM % -0.6 10/31/2007 M 3.0 3.6 YoY % 47.1 10/31/2007 M 48.3 1.2 MS, Narrow Def, Level, bio USD 155.0 12/03/2007 W 155.9 0.8 0.5 4 4 WoW % -0.5 12/03/2007 W 0.5 1.0 Reserves, weekly International Reserves, bio USD 463.5 11/30/2007 W 459.6 3.9 0.8 3 3 Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 WoW % 0.8 11/30/2007 W 0.8 0.0 gg gg www.crediteurope.ru/en/research/ _6_ Credit Europe Bank Ltd. All rights reserved. See terms of Use/Disclaimer on the last page. 50RBKS01 | 0001
  7. 7. Russian Macroeconomics - Macroeconomics RUSSIAN MAJOR ECONOMIC STATISTICS Date of last Net Ch to CBR REF RATE MosPrime 3M Name Last Value Freq Prev % Ch to prev Showing prev 7 FED FUNDS USD 3M Libor 12 Reserves, Monthly 6 10 International Reserves, bio USD 463.5 11/30/2007 M 447.0 16.6 3.7 MoM % 3.7 11/30/2007 M 5.1 1.4 5 8 Includ. Foreign Currency Reserves, bio USD 354.6 11/30/2007 M 325.4 29.1 9.0 MoM % 9.0 11/30/2007 M 5.0 4.0 4 SDRs, bio USD 0.0 11/30/2007 M 0.0 0.0 0.0 6 Reserve Position in IMF, bio USD 0.4 11/30/2007 M 0.4 0.0 1.1 3 MoM % 1.1 11/30/2007 M 1.1 0.0 4 Gold, bio USD 11.4 11/30/2007 M 11.0 0.4 3.8 2 MoM % 3.8 11/30/2007 M 8.3 4.6 2 Other Reserve Assets, bio USD 97.2 11/30/2007 M 110.2 13.0 11.8 1 MoM % -11.8 11/30/2007 M 5.0 16.8 Domestic Loans (CBR) 0 0 Jan-07 Feb-07Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Total, bio USD 20.9 09/30/2007 M 17.5 3.4 19.3 MoM % 19.3 09/30/2007 M 6.5 12.8 Individual, bio USD 4.0 09/30/2007 M 5.4 1.4 26.6 MoM % -26.5 09/30/2007 M 10.7 37.2 CEB SUB EM EQUITY INDEX, 12/01/2007=1000 Companies, bio USD 11.7 09/30/2007 M 12.7 1.0 7.9 2,000 RTS ADJUSTED SINCE YEAR BEGIN,12/01/2007=1000 2000 MoM % -7.9 09/30/2007 M 5.2 13.1 CEB COMPOSITE OIL INDEX, 12/01/2007=1000 1,900 1900 Stabilization Fund Level, bio USD 143.7 11/30/2007 M 149.1 5.4 3.6 1,800 1800 Federal Budget 1,700 1700 Cumulative Data Revenues, bio USD 252.7 10/31/2007 M 207.8 44.9 21.6 1,600 1600 Expenditures, bio USD 167.5 10/31/2007 M 141.5 26.0 18.4 1,500 1500 Balance, bio USD 85.2 10/31/2007 M 66.3 18.9 28.5 1,400 1400 Monthly Data Revenues, bio USD 44.9 10/31/2007 M 23.5 21.4 91.3 1,300 1300 Expenditures, bio USD 26.0 10/31/2007 M 17.5 8.5 48.5 1,200 1200 Balance, bio USD 18.9 10/31/2007 M 5.9 12.9 217.6 Budget Deficit/Surplus % of GDP 11.4 06/30/2005 Q 15 3.6 1,100 1100 Foreign Debt 1,000 1000 Central Bank Data, bio USD 384.8 06/30/2007 Q 341.1 43.7 12.8 Jan-07 Feb-07Mar-07Apr-07May-07Jun-07 Jul-07 Aug-07Sep-07 Oct-07Nov-07 Finance Ministry, bio USD 47.1 09/30/2007 Q 47.8 0.7 1.5 Inflation, Consumer Side Headline MoM % 1.2 11/30/2007 M 1.6 0.4 MICEX MICEX-10 RTS RTS-2 2,500 4000 YoY % 10.8 10/31/2007 M 9.4 1.4 Year-to-Date % 10.6 11/30/2007 M 9.3 1.3 3750 FOOD MoM % 1.9 11/30/2007 M 3.3 1.4 3500 NON-FOOD MoM % 0.9 11/30/2007 M 0.9 0.0 2,250 SERVICES MoM % 0.6 11/30/2007 M 0.1 0.5 3250 Core 3000 MoM % 1.1 11/30/2007 M 2.1 1.0 2,000 2750 Year-to-Date % 10.1 11/30/2007 M 8.9 1.2 Inflation, Producer Side, 2000=100 2500 MoM % -0.1 10/31/2007 M -0.6 0.5 2250 YoY % 14.2 10/31/2007 M 8.6 5.6 1,750 YTD % 9.9 10/31/2007 M 9.3 0.6 2000 Industrial Production, 2002=100 1750 MoM % 7.4 10/31/2007 M -0.2 7.6 1,500 1500 YoY % 6.1 10/31/2007 M 3.0 3.1 Jan-07 Feb-07Mar-07 Apr-07May-07 Jun-07 Jul-07 Aug-07Sep-07 Oct-07 Nov-07 YTD % 6.5 10/31/2007 M 6.6 0.1 Investments in Productive Capacity Level, bio USD 25.6 10/31/2007 M 25.0 0.6 2.5 MoM % 0.5 10/31/2007 M 2.9 2.4 YoY % 19.6 10/31/2007 M 16.0 3.6 MCX Oil&Gas MCX Retail&Mining MCX Power Agriculture Production 2,000 MCX Telecom MCX Manufacturing MICEX 4500 YoY % 4.6 08/31/2007 M 3.2 1.4 Housing Construction Property Prices Moscow, USD pr Sq m 4194 11/30/2007 M 4116 78 1.9 4000 1,750 Contracts Level, bio USD 12.6 07/31/2007 M 11.9 0.8 6.4 3500 MoM % 4.1 07/31/2007 M 19.4 15.3 YoY % 24.9 07/31/2007 M 26.4 1.5 1,500 Residential Construction 3000 mio of Sq m 4.1 10/31/2007 M 6.0 1.9 31.7 MoM % -31.4 10/31/2007 M 61.0 92.4 1,250 YoY % 19.3 10/31/2007 M 18.5 0.8 2500 Net Private Sector Capital Flow Total Outflow, bio USD 53.2 06/30/2007 Q 13.9 39.3 282.7 including: 1,000 2000 Banks, bio USD 37.1 06/30/2007 Q 0.0 37.1 0.0 Jan-07 Feb-07Mar-07 Apr-07May-07 Jun-07 Jul-07 Aug-07Sep-07 Oct-07 Nov-07 Households, non-finanacial enterprises, bio USD 16.1 06/30/2007 Q 13.8 2.3 16.7 gg gg www.crediteurope.ru/en/research/ _7_ Credit Europe Bank Ltd. All rights reserved. See terms of Use/Disclaimer on the last page. 50RBKS01 | 0001
  8. 8. Macrodynamics Gg Andrey Golubev Industrial Production, Real, MoM, %, 2006 2007 2005, Real GDP, Y oY , % 2006 Research Analyst Russian & Global Capital Markets 2007 Nominal, bio USD, Y oY 15 15 Treasury Credit Europe Bank Ltd 10 1400 10 10 9 8 5 5 T: +7 (495) 725 40 40 (ext. 7239) 1300 7 F: +7 (495) 725 40 13 6 0 0 5 1200 andrey.golubev@crediteurope.ru 4 -5 -5 3 BLOOMBERG: 1100 -10 -10 2 Andrey Golubev 1 0 1000 -15 -15 Agolubev2@bloomberg.net Q1 Q2 Q3 Q4 J F M A M J J A S O N D Online WEB Research: http://www.crediteurope.ru/en/research/ Core CPI, MoM, %, 2006 2007 CPI, All Items, MoM, % PPI, MoM, % Online Bloomberg Research: 2,4 2,4 6 6 CEBM <GO> 5 5 2,0 2,0 4 4 3 3 1,6 1,6 1,1 2 2 1,2 1,2 1 1 0 0 0,8 0,8 1 1 0,4 0,4 2 2 3 3 0,0 0,0 4 4 J F M A M J J A S O N D Jan-05 Jun-05 Nov-05 Apr-06 Sep-06 Feb-07 Jul-07 Dec-07 2007 2006 Federal Budget Surplus, bio USD Unemployment, mio people Unemployment Rate, % from Total Labor Force 20 20 15 15 9 9 10 10 8 8 5 5 7 7 0 0 6 6 5 5 5 5 10 10 4 4 15 15 3 3 20 20 Jan-05 Jun-05 Nov-05 Apr-06 Sep-06 Feb-07 Jul-07 Dec-07 J F M A M J J A S O N D Stabilization Fund of Russia, bio USD Money Supply, bio USD 150 150 500 500 467 140 140 144,43 450 450 130 130 464 120 120 400 400 110 110 100 100 350 350 90 90 80 80 300 300 J F M A M J J A S O N D J F M A M J J A S O N Gold and Forex Reserves, bio USD Foreign Trade (CBR), $bio Imports, $bio Exports, $bio 480 480 35 35 460 460 30 30 440 440 420 420 25 25 400 400 20 20 380 380 360 360 15 15 340 340 320 320 10 10 300 300 5 5 280 280 D J F M A M J J A S O N 0 0 Jan-05 Jun-05 Nov-05 Apr-06 Sep-06 Feb-07 Jul-07 Dec-07 Sources: Bank of Russia, Finance Ministry, Economy Ministry, Rosstat, Bloomberg, Credit Europe Bank Treasury Research Gg * On Charts: J=January, F=February, M=March, etc. If not mentioned, the year is 2007. www.crediteurope.ru/en/research/ _8_ Credit Europe Bank Ltd. All rights reserved. See terms of Use/Disclaimer on the last page. 50RBKS01 | 0001
  9. 9. Financial Markets Dynamics USD / RUB EUR / RUR 27,0 27,0 36,5 36,5 26,5 26,5 36,0 36,0 26,0 26,0 35,5 35,5 25,5 25,5 35,0 35,0 25,0 25,0 24,5 24,5 34,5 34,5 24,0 24,0 34,0 34,0 J F M A M J J A S O N J F M A M J J A S O N RUS30 Yield UST10 Yield MCX RCBI 6,5 6,5 102 102 102 102 6,0 6,0 101 101 5,5 5,5 101 101 5,0 5,0 100 100 100 100 4,5 4,5 99 99 4,0 4,0 99 99 3,5 3,5 98 98 J F M A M J J A S O N D J F M A M J J A S O N Deposits with CBR, bio RUB C/A with CBR O/N One week rates MosPrime O/N 1800 12 y = 4E-13x - 1E-07x + 0,01x4 - 524,69x3 + 2E+07x2 - 2E+11x + 6 5 1600 10 10 10 2E+15 1400 9 9 LIQUIDITY (bln. RUB) 1200 8 8 8 RATES % 1000 6 7 7 800 6 6 600 4 5 5 400 2 4 4 200 0 0 3 3 J F M A M J J A S O N 2 2 J F M A M J J A S O N Volume RTS Volume RTS-2 RTS RTS-2 MICEX COMP MICEX 10 200 2 500 180 2 400 1 950 3 600 160 2 300 3 500 VOLUME (mln. USD) 140 2 200 1 850 2 100 3 400 120 INDICES 2 000 100 1 750 3 300 1 900 80 1 800 60 1 650 3 200 1 700 40 1 600 3 100 20 1 500 1 550 3 000 0 1 400 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 1 450 2 900 J F M A M J J A S O N Sources: RTS, MICEX, Bloomberg, Credit Europe Bank Treasury Research Ggg Kl; fgfg www.crediteurope.ru/en/research/ _9_ Credit Europe Bank Ltd. All rights reserved. See terms of Use/Disclaimer on the last page. 50RBKS01 | 0001
  10. 10. . Credit Europe Bank Treasury Research Russian Banking System Net Capital Inflow / Outflow, Russian Foreign Debt, Foreign Assets in Russian Financial Sector Total Number of Banks, Banking Authorized Capital, Foreign Presence in Banking Authorized Capital Total Number of Subsidiaries, Branches & Representative Office of Banks . www.crediteurope.ru/en/research/ _10_ Credit Europe Bank Ltd. All rights reserved. See terms of Use/Disclaimer on the last page. 50RBKS01 | 0001
  11. 11. Russian Banking System – Net Capital Inflow / Outflow, Russian Foreign Debt, Foreign Assets in Russian Financial Sector Gggggg Andrey Golubev Net Capital Inflow / Outflow by Private Sector, bio USD Net Capital I/O by Banks, bio USD NC I/O by other sectors, bio USD Research Analyst Russian & Global Capital Markets 80 80 30 30 Treasury Credit Europe Bank Ltd 60 60 20 20 40 40 10 10 T: +7 (495) 725 40 40 (ext. 7239) F: +7 (495) 725 40 13 20 20 0 0 andrey.golubev@crediteurope.ru 0 0 10 10 BLOOMBERG: 20 20 20 20 Andrey Golubev Agolubev2@bloomberg.net 40 40 30 30 94 95 96 97 98 99 00 01 02 03 04 05 06 07E 97 98 99 00 01 02 03 04 05 06 07E Online WEB Research: http://www.crediteurope.ru/en/research/ Total Foreign Debt of Russia, bio USD Foreign Debt in foreign currency, bio USD Foreign Debt in Domestic currency Online Bloomberg Research: 400 400 400 400 CEBM <GO> 350 350 300 300 300 300 384,8 200 200 250 341,1 250 310,4 309,7 278,2 251,5 100 100 200 257,2 200 58,1 62,9 74,4 150 150 0 0 End of 2005 End of 2006 End of March 07 End of June 07 End of 2006 End of March 07 End of June 07 Net Foreign Assets in Russian Financial Sector (acc to banks, insurers, NPFs), CBR Refinancing Rate, %, Historical Snap bio USD 160 160 400 400 140 140 350 357,3 350 325,8 120 120 300 300 282,3 100 100 250 250 80 80 200 198,3 200 60 60 150 150 100 100 40 40 50 50 20 20 0 0 0 0 2005 2006 Q1 2007 Q2 2007 97 98 99 00 01 02 03 04 05 06 07 Obligatory Reserves for credit institutions on C/As in CBR (averaged), bio USD Money Base (M2), National Definition, bio USD 10 10 500 500 8 8 400 400 6 6 300 300 466,2 4 4 200 200 327,1 2 2 100 221,9 100 178,1 0 0 0 0 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 End of 2004 End of 2005 End of 2006 End of Oct07 Sources: Bank of Russia, Economy Ministry, Finance Ministry, Bloomberg, Credit Europe Bank Treasury Research Ghj www.crediteurope.ru/en/research/ _11_ Credit Europe Bank Ltd. All rights reserved. See terms of Use/Disclaimer on the last page. 50RBKS01 | 0001

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