3. Assets
Growing share of loans Risk averse policy on currency risk
RUB bln
We stick to the strategy
174
166 of having no currency
148 156 RUB mismatches between
147 34
Cash and
33 equivalents assets and liabilities
28 34 Due from
focusing mainly on
37 6 17 banks
1 14 USD
6 18 18 16 Securities 11% ruble-nominated assets
11 16
13 14 81%
13 Retail loans
8%
89 98 Corporate Other
73 79 80 loans
Other assets
8 9 9 8 9
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011
*Based on monetary assets and liabilities
IEA represent 75% of total assets LTD ratio improving
RUB bln
Other assets
Cash and Customer funds Gross loans L/D ratio
equivalents
5%
19%
Due from other 92%
87% 88%
84%
banks 10% 80%
Securities 57%
9%
Corporate loan 95 119 102 118 106 125 115 130 126 137
Retail loan
portfolio
portfolio
Q1'10 Q2'10 Q3'10 Q4'10 Q1'11
3
4. Loans and advances
Impressive growth… …beating the banking sector…
SME Individuals Administrations Large corporates
+32.1%
VZRZ Sector
+9.4%
YoY +34.1% +16.3%
34,2 Total Loans
30,7 QoQ +10.0% +2.3%
24,4 25,9
19,1 8,5
8,0 8,4 7,3 8,1 17,5 YoY +34.9% +15.7%
13,7 14,4 15,2
16,6
Corporate Loans
QoQ +10.8% +2.2%
65,9
54,6 55,4 57,2 59,8
YoY +29.4% +18.6%
Retail Loans
QoQ +5.5% +2.6%
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011
…in key regions… …across the economy sectors… …in our niche of SMEs.
*as of 31.03.2011 *as of 31.03.2011
Other Individuals
Transport
Moscow Oblast 8%
Agriculture Manufacturing
(43%) 6% SME
54 702 4% 27%
Construction 26%
8% Large
RUB RUB
52% corporate
4% 126,036 126,036
51 234 Regional
mln. mln
7% authorities
Other 14%
20 100 23%
regions Individuals 14%
7%
Moscow (16%) (41%) Wholesale &
retail trade State organizations
4
5. Liabilities
Resilient funding base… … with high share of interest-free funding
RUB bln Retail deposits
166 174
148 147 156 Retail accounts Current accounts/
70
Corporate
Liabilities
29.4%
accounts
69 Corporate
59 63 66
deposits
Securities
15 issued
13 17
15 14 Due from other
31
25 24 26 28
21
banks
Other Liabilities
Customer accounts/
23 17 18 17
6 7 Subordinated
Liabilities
87.0%
5 4 5 8 8 loans
4 5 4 4 4 Equity
16 16 17 17 17
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011
Strengthening long-term resources Maturity gap
Rub bln
Less than 1 month
Q1 2011 1-6 months Q4 2010 10
Net liquividity gap (Assets-Liabilities)
6-12 months
Over 12 months 5
25% 35% 20% 38% 5 5
3
0
(3)
-5
19%
15% 25%
23% -10
On demand and 30-180 days 180 days -1 year over 1 year
less than 30 days
5
6. Credit quality management
NPLs dynamics Annualized cost of risk
NPLs, RUB mln * Charges to provisions to
Provisions, % of total portfolio avg gross loans, QoQ
NPLs, % of total portfolio Charges to provisions to
11,06% 2,70% avg gross loans, YtD
10,98% 2,63% 2,51%
10,55% 10,48%
10,68% 2,63% 2,66%
10,52% 10,44% 9,71%
9,15% 2,22%
1,83% 1,16%
11 592
12 078 8,78% 1,16%
10 555 10 814 11 061
0,01%
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011
* 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: improvements in SME and large corporate segments
SMEs Large corporate Retail RUB mln
- 490 recoveries
- 154 recoveries
+568 new NPLs - 1 312 recoveries
9,3% 9,5% +371 new NPLs
13,8% 13,9% 8,4%
12,9% 9,3%
12,1% 11,2% 8,0%
7,3% 7,0%
13,4% 6,4% 7,6% 6,4% 7,1%
12,3% 12,9% 12,1% 6,4% 5,6% 7,2%
11,6% 6,4%
6,2% 6,2%
4,1%
8 426 8 605 8 155 8 117 8 195 3,2% 2 936 4,6% 1 279 1 359 1 277
1 025 1 242
2 160
1 624
850 850
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011
NPLs, RUB mln Provisions, % of total loans NPLs, % of total loans
6
15
7. Credit quality
Large SMEs Mortgages Other Total % of
as of 31.03.2011 corporate retail total
loans Provisions to
NPLs Ratio
Gross loans, including
104%
35,205 73,357 10,538 6,936 126,036 100.0%
Current loans 33,581 65,162 9,884 6,348 114,975 91.23%
Past-due but not 0.5%
impaired, of them 0 98 419 119 636
Provisions to
Less than 90
days - 98 364 107 569 0.45% 90+ days
NPLs
Over 90 days - - 55 12 67 0.05%
Impaired, of them
Less than 90
days
1,624
774
8,097
965
235
1
469
26
10,425
1,766
8.27%
1.4%
132%
Over 90 days 850 7,132 234 443 8,659 6.87%
Total NPLs 1,624 8,195 654 588 11,061 8.77% Rescheduled
Loans
Provisions
8.2%
- 1,985 - 8,475 - 501 - 577 -11,538 9.15%
Net Loans 33,220 64,882 10,037 6,359 114,498 -
the whole amount of loans with principal overdue for more than 1 day, loans
NPL - with any delay in interest payments as well as not past-due loans with signs of
impairment.
7
8. Q1 2011 Profit and Loss development
Q1’11 Q4’10 Q1’10 QoQ YoY
Interest income 3,146 3,263 3,641 -3.6% -13.6%
Interest expense (1,782) (1,860) (2,183) -4.2% -18.4%
Fee and commission income 1,092 1,204 900 -9.3% +21.3%
Fee and commission expense (86) (115) (73) -25.2% +17.8%
Other operating income 169 122 59 +38.5% +186%
Total operating income 2,539 2,614 2,344 -2.9% +8.3%
Operating expenses (1,798) (2,252) (1,531) -20.2% +17.4%
Provisions (350) (3) (625) x117 -28.6%
Provisions on non-core assets 5 (121) -
Tax (79) (54) (91) +46.3% -13.2%
Net profit 317 184 97 +72.3% +227%
8
9. Operating income development
Though interest rates continued to lower… …restraining NIM growth…
Rub bln NIM
-13.6% Interest Spread
Interest Expenses Yield on earning assets (net)
-3.6%
Interest Income Cost of funds
14,1%
12,9%
11,6% 11,0%
3,6 3,5 3,2 3,3 3,1 9,8%
7,4%
6,5%
5,6% 5,8%
-2,2 -2,1 -2,0 -1,9 -1,8 5,1%
6,7% 6,4% 6,0% 5,2%
4,7%
-4.2% 4,0% 3,7% 3,3% 3,5% 3,2%
-18.4%
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011
…core income growth was driven by fees. Charges to provisions
Rub bln Rub bln
+8.3%
Net interest income Net fees Other income -2.9%
0,1 0,2
0,1 0,1 0,2 0,7
0,6
0,6
0,8 1,0 1,1 1,0
1,0
0,4
1,5 1,4 1,3 1,4 1,4
0,0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011
9
10. Fees and commissions
Strong non-interest income based on long-term
Net fee income distribution
relations with customers
Settlements Cash transactions Other Cards RUB mln
Share of non-interest +21.6%
income in total operating vbank -7.6%
income b.p.
46% peer 1 1 089
peer 2 1 044 1 006
975
peer 3 308 335
827 292 292
26% 257
18% 170 190 196
159
15% 138
262
248 277 230
Net fee margin 214
2,4% 218 276 304 287 288
0,0% 1,0% 2,0% 3,0% 4,0%
* Vbank data as of 1Q’11, Peer1, Peer2, Peer 3 - FY2010 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011
Non-interest income breakdown by segments Key points
Vbank’s share of net fee income in total operating income
Q1 2011 Q4 2010 before provisions remained one of the highest among Russian
banks and stood at 40% in Q1 2011 while fee margin was 2,4%,
Financial Corporate Others Corporate which is also higher than for our peers.
business Financial business
3% 1% Fees and commissions demonstrated robust growth
3%
of 22% YoY and remained well-diversified across different
26% 25% banking products with main contribution from settlements
Cards and banking cards.
Cards 57% 57%
Corporate business continued to be the driver of fee income
14% 14% with 57% of fees generated followed by 26% from banking
Retail business Retail business cards business and 14% from retail segment.
10
12. Key 1st quarter trends
Corporate loan portfolio of RUB 98 102 mln up by 10.8% QoQ.
Defense of
Retail loan portfolio of RUB 16 396 mln up by 5.5 % QoQ.
market niche
Fees and commissions grew by 22% YoY and comprised 40% of revenue.
First time since 2008 NPLs contracted in absolute terms: Rub -1 bln QoQ:
Asset quality • from 12.1% to 11.2% in SME segment,
improvement • from 9.3% to 4.6% in large corporate segment.
Total NPL ratio declined by 2.3pps over the year from 11.1% to 8.8%.
Net income of Rub 317 mln, up 3.2 times YoY.
Profitability is on ROE improvement is on track - from 4.4% to 7.5% QoQ.
track Cost to income of 70.8% is still high and creates room for optimization.
12
13. 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.
13
