Bank Vozrozhdenie Gradual recovery is underway

Transcription

1 Bank Vozrozhdenie Gradual recovery is underway Renaissance Capital 16 th Annual 1:1 Investor Conference June 2012

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3 Agenda Business model Business overview Recent IFRS results Investment summary 3

4 Over 20 years of successful development. Establishm ent and banking license 34 branches in the Moscow Oblast 9 new regional branches opened Cash collection and delivery services established Corr. accounts with western banks Joined the World Bank developmen t program Cooperatio n with CIBC S&P rating Rated by the Central Bank as a stable bank after the financial Crisis CIBC becomes a shareholder The 3 rd largest branch network Top 10 by deposits from individuals Top 3 in the State Mortgage Program Top 7 mortgage provider Best midcap Russian bank (Big Money) $ 177 mln raised by 20 th issue 3 rd by lending to SME $81 mln EBRD financing Top 10 by bank cards issued Best SME bank in Moscow Oblast Top 10 retail banks in Russia First MBS deal on Rub 4,1 bln License for foreign exchange Associate member of VISA International Authorized Bank of the Russian Government Joined S.W.I.F.T. Bank s ADRs traded on the Frankfurt Stock Exchange Established ATM network and a processing center Top 20 by corporate loan portfolio Widest ATM network in the Moscow Oblast Over 100,000 VISA cards issued 17 th equity issue raises $33 million Joined Deposit Insurance Program Overall rebranding CRM system development The most transparent bank in Russia (S&P) Top 500 world s banking brands Best bank IR and best IR professional (Thomson Reuters ) Bank of the Year in Russia in 2010 (The Banker) Over 1,550,000 clients Best public company (Secret Firmy Magazine) 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 Retail Clients Corporate and SME Clients via 21 Region 158 Offices 794 ATMs employees 5

6 Distribution network As of Moscow Oblast is a home territory with historically strong market position Branches Sub branches Retail offices Total ATMs every town is under coverage Twenty regions of presence. Focus on the most attractive South and North-West Branches Sub branches Retail offices Total ATMs Representative offices 6

7 Basic information & position in Russian banking system Key Figures, RUB Assets Loans Customer Funds Net Income Shareholders equity Retail Clients Corporate Clients 183,074 mln 130,631 mln 142,969 mln 526 mln 19,003 mln 1,600,000 62,600 Rankings* Net Assets Loans to SMEs 4 Volume of retail deposits Mortgages 7 Corporate loans 19 Personnel Offices 6, Bank cards emitted 8 ATMs 794 Branches/ATMs 32/18 * RBC most recent rankings 7

8 Market recognition Credit ratings Listing Moody s Ba3/D-/NP, stable Included in indexes MICEX Financial Index, RTS Standard&Poor s BB-/ruAA-, stable Listing A2 MICEX 25 Aaa 22 Aa 19 A 16 Baa 13 Ba 10 B 7 Moody's Moody's Interfax Moody's Ba3 Aa3.ru S&P international Caa CCC S&P S&P national scale ruaa- BB- AAA A AA BBB BB B High recognition of brand The Banker Vbank became the winner in nomination The Bank of the year 2010 in Russia on the annual ceremony of The Banker magazine 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 $168 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 Servicing on each stage of business development Retail customers 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 - Customer oriented organic growth - Conservative balance sheet - Primarily deposit funded - Focused network expansion - Increasing efficiency in service delivery gives strong non-interest income RUB bln Non-interest income Net interest income % 41% 37% 46% 46% 54% 59% 59% 63% 54% Loan portfolio development RUB bln Note: all loans are gross loans Retail loans Corporate loans % 17 Q1' 11 Q2' 11 Q3'11 Q4'11 Q1'12 funded by customer accounts RUB bln Interest-bearing Deposits Interest-free Current accounts % % % Q1' 11 Q2' 11 Q3'11 Q4'11 Q1'12 Q1' 11 Q2' 11 Q3'11 Q4'11 Q1'12 11

12 Assets Reliable balance sheet RUB bln Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Cash and equivalents Due from banks Securities Retail loans Corporate loans Other assets enhances revenue generation capacity Loans Securities Due from banks RUB bln 79% 73% 1,0 0, Q4'11 Q1'12 IEA share comprises 79% of total assets Cash and equivalents Due from other banks 16% Securities 0% 7% 5% Other assets LTD ratio at optimal levels Gross loans Customer funds L/D ratio 92% 98% 99% 95% RUB bln 101% Retail loan portfolio 14% 58% Corporate loan portfolio Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 12

13 Loans Healthy growth with focus on SMEs Rub bln SME Individuals Administrations Large corporates +14,2% +4,8% 41,2 35,1 38,1 40,2 34,2 3,9 2,7 3,3 8,5 5,5 20,1 22,5 24,4 25,9 17,5 65,9 72,0 72,3 70,1 73,6 and mortgages in retail Mortgages Consumer and auto loans Credit cards +48,3% +6,4% 2,2 2,2 2,3 6,8 2,2 6,8 2,1 6,5 5,8 4,8 10,5 12,1 13,6 15,4 17,0 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 in Moscow oblast - key region of presence Breakdown by industry Moscow Oblast (41%) RUB 143,952 mln Other regions(41%) *as of Agricultur e Construction Transport 7% 3% Other 4% 9% 6% RUB 143,952 mln 28% *as of Manufacturing Moscow (18%) Wholesale & retail trade 23% 18% 2% Individuals Administrations 13

14 Who are SMEs? What is our SME Definitions Segment Credit turnover on current accounts. RUB mln. Total credit exposure. RUB mln. Total customer funds with the Bank. RUB mln. Large business >300 >750 >300 Medium-size and small businesses Micro businesses 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 with 65% of loans less than RUB 0.75 bln Large corporations SMEs Other RUB bln 80,00% Up to 30 mln mln mln more than 750 mln Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Corporate funding... Term Deposits Current Accounts % 62% 3% RUB bln 58% 70,00% 60,00% 50,00% 40,00% 30,00% 20,00% 10,00% 0,00% Data as of % 34% 13% 7% mostly nominated in RUB RUR FX 53,6 52,4 53,1 53,1 4,8 4,6 4,6 4,3 *under RAS 55,8 4,9 9% 48,7 47,8 48,5 48,8 51, % Q1'11 Q2'11 Q3'11 Q4'11 Q1'

16 Conservative risk profile Credit policy sticks to reliable collateral RUB bln *as of March 31, 2012.providing mostly working capital *as of March 31, 2012 Loan amount Collateral value 97 75% 30,4% Corporate portfolio ,1% 16,9% 18,5% 7,9% 17,2% Government guarantees 14,6 14,3 Real Estate Equipment & Vehicle in the same currency as SMEs revenues. FX loans RUB loans 113,6 113,4 117,2 118,8 124,1 14,0 13,3 Guarantees 14,2 99,1 99,0 103,2 105,5 109,8 Other collateral& blank RUB bln 12% up to 30 days Key points days days days 1-2 years > 2 years - Average LTV of the portfolio is 57%* mostly collateralized by solid real-estate, equipment and vehicles (63% of total loans). Revision of collateral value is conducted on a quarterly basis. - We provide our clients with working capital rather than longterm financing 75% of corporate loans with maturity less then 1 year. It allows us to react on changing market conditions. - Matching in terms of the loan currency and the client revenues is a core point. FX loans are issued only to customers related to export-import transactions. *Guarantees are not taken into account 16

17 Retail lending promising segment after crisis Retail loan book changes (IFRS) Consumer loans Mortgages 17,5 10,5 20,1 12,1 Car loans Credit cards 22,4 13,6 24,4 RUB bln 25,9 15,4 13,6 2,1 2,2 2,3 2,2 2,2 0,4 0,4 0,4 0,4 0,4 4,5 5,4 6,1 6,3 6,4 Retail loans maturity Primarily mortgages under state-related agency JSC AHML standards High-margin consumer loans to customers with apparent cash-flow management of corporate clients 0,2% 2,3% 0,2% 0,9% *as of March 31, 2012 Retail portfolio 81,4% 15,0% Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 up to 30 days days days days 1-2 years > 2 years Currency breakdown (RAS) Rates for retail loans 20,7 0,5 21,3 0,5 FX loans 22,3 0,7 RUB loans 23,2 24,1 0,4 0,5 RUB bln 2.0% Consumer loans, RUB Mortgages, RUB Credit cards, RUB ,1 13,4 21,8 22,8 23, We plan to further expand retail portfolio, which demonstrated stable growth driven by strong demand. Particular focus is on mortgages as the most perspective segment with government support

18 Card business reliable source of non-interest income Business strategy Generates strong fee income Corporate clients Retail clients Interests 7% 17% acquiring Visa and Mastercard 22% 70% 78% 18% 14% card commissions self-service - Payrolls - Acquiring - Self-service transactions - Credit cards Fees & commissions 44% 1 payrolls developing key card product - payrolls Q Q Q Q Payrolls 11,500 11,700 12,156 12,870 Debit cards 1,340,197 1,309,788 1,258,397 1,330,220 Credit cards 41,431 42,910 43,236 44,723 ATMs Key points - Payrolls is the main tool for client base growth with strong potential 62,600 of existing corporate clients and 15,000 installed client-bank systems - 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 18

19 Asset quality evolution 19

20 Credit quality management NPLs dynamics Annualized cost of risk NPLs, RUB mln* Provisions, % of total portfolio NPLs, % of total portfolio 9,15% 9,09% 9,26% 9,44% 9,25% Charges to provisions to avg gross loans, QoQ Charges to provisions to avg gross loans, YtD 1,78% 2,14% 1,92% 8,78% 8,31% 8,40% ,70% ,70% ,16% 1,16% 1,48% 1,71% 1,77% 1,02% 1,02% Q Q Q Q Q * 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 Q Q Q NPLs categorization: mild rise in NPL ratio due to one large loan impairment Q Q SMEs Large corporates Retail RUB mln + Rub 721 mln new NPLs - Rub 227 mln recoveries + Rub 1,635 mln new NPLs + Rub 94 mln new NPLs - Rub 215 mln recoveries 11,6% 11,3% 11,5% - Rub 94 mln recoveries 11,0% 11,1% 7,1% 6,9% 8,7% 8,9% 6,2% 5,3% 11,2% 6,2% 5,0% 10,4% 11,1% 10,7% 7,6% 7,0% 8,3% 10,8% 4,4% 4,3% 5,6% ,6% 4,3% 4,9% 3,4% 3,2% ,6% Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q NPLs, RUB mln Provisions, % of total portfolio NPLs, % of total portfolio 20 15

21 Credit quality as of Large corporate SMEs Mortgages Other retail Total % of total loans Gross loans, including 41,211 76,824 16,972 8, , % Current loans 37,811 68,561 16,717 8, ,462 91,3% Provisions (1,459) (1,258) (245) (164) (3,126) Past-due but not impaired, of them % Less than 90 days % Over 90 days % Provisions - - (37) (21) (58) Impaired, of them 3,400 8, , % Less than 90 days 2, , % Over 90 days 842 7, , % Provisions (2,189) (7,306) (192) (450) (10,137) Total NPLs 3,400 8, , % Net Loans NPL - Provisions (3,648) (8,564) (474) (635) (13,321) 9.3% 37,563 68,260 16,498 8, ,631 the whole amount of loans with principal overdue for more than 1 day as well as loans with any delay in interest payments. - Provisions to NPLs Ratio 106.7% Provisions to 90 days+ NPLs 146% Rescheduled Loans 4.2% 21

22 Liabilities and Capital 22

23 Liabilities and capital Funding base remains reliable RUB bln Q Q Q Q Q Matched FX structure Assets Retail deposits Retail accounts Corp. accounts Corp. deposits Securities issued Due to other banks Other Liabilities Subordinated loans Equity Data as of March 31, 2012 Liabilities with high share of interest-free funding Corporate deposits Retail deposits Retail accounts Corporate accounts +4.45% ,5% Q Q Q Q Q Capital position in line with requirements RUB bln 34% Tier 1 Tier 1 + Tier 2 CAR under CBR rules 14,1% 13,6% 13,4% 13,8% (N1) 13,4% 12,0% 11,8% 11,6% 11,9% 11,8% 11,4% RUB 81% USD 12% EUR 7% Other 0% RUB 80% USD 13% EUR 7% Other 0% 11% MIN Q Q Q Q Q

24 Recent IFRS results 24

25 Financial highlights Q1 12 Q4 11 Q1 11 QoQ YoY Interest income % +19.8% Interest expense (1 620) (1 481) (1 782) +9.4% -9.1% Fee and commission income % +11.5% Fee and commission expense (92) (118) (86) -22% +6.9% Other operating income % -24.9% Total operating income % +34.0% Operating expenses (2 042) (2 405) (1 798) -15.0% +13.6% Provisions (358) (658) (350) +2.3% -45.6% Provisions on non-core assets (313) (83) % - Tax (163) (142) (79) +14.8% % Net profit % +65.9% 25

26 NIM maintained at sufficient level supported by stronger interest income Interest Income and Interest Expenses, RUB bln Interest Expenses Interest Income 3,1 3,5 3,6 3,7 3,8-1,8-1,7-1,6-1,5-1,6-9.1% +19.8% +2.0% +9.4% - Interest income keeps recovering on the back of higher interest rates across the loan book and portfolio growth even though major part of loans were issued in the end of the period. In Q it was up 2% QoQ to Rub 3.8 bln. - After recordly low levels achieved in Q interest expenses started to increase reflecting higher interest rates on deposits introduced in H2 2011, cost of funding rose by 29 bps, still remaining on a comfortable level of 4.0%. Q1 11 Q2 11 Q3 11 Q4 11 Q bps NIM NIM evolution 3,2% -22bps 4,3% 4,6% 4,9% 4,7% - Net interest margin on total average assets stood at 4.7%, 23 bps lower than in Q4 due to outpacing growth of interest expenses. Compared to the same period of 2011 NIM showed significant improvement from 3.2%. Q1 11 Q2 11 Q3 11 Q4 11 Q

27 Stronger operating efficiency offsets seasonally low revenues Operating Income and Expenses, RUB bln Cost to Income before provisions, % 0,2 1,0 1,4 Net interest income Other income +34.0% pps Personnel expenses Other expenses 42% 0,1 0,1 1,2 1,3 1,9 2,0 2,2 2,1 40% 36% Net fees Operating Expenses 0,2 1,4 1,1 36% 0,1-1,8-2,1-2,1-2,4-2, % Q1 11 Q2 11 Q3 11 Q % 66% 60% 64% -9.5% -15.1% Q % 37% 29% 26% 24% 28% 23% - First quarter is normally characterized by subdued economic activity resulting into lower non-interest income, while on a YoY basis net commission income grew by 11.9% driven by settlement and cash operations and operations with banking cards. On a year-on-year basis improved interest and non-interest revenues contributed to 34% hike in total operating income before provisions. - Operating expenses were down 15% QoQ due to seasonality and cost control. On a YoY basis administrative expenses were maintained at the same level, while 14% growth is mostly attributed to accruement of bonuses to be paid in the end of the year in Q Cost to income ratio declined by 395 bps QoQ and improved to 60% due to lower level of operating expenses. Q1 11 Q2 11 Q3 11 Q4 11 Q

28 Solid net income growth due to maintained operating profit coupled with lower level of provisioning Operating profit and provisions, RUB bln 0,7 1, % Operating profit before provisions Provisions 1,4 1,4 1,4-0,4-0,6-0,7-0,7-0,4 Q1 11 Q2 11 Q3 11 Q ,4% Q Operating profit was maintained at the level of Q and totaled Rub 1.4 bln supported by tighth cost control. - The bank charged Rub 358 mln to provisions for the quarter that lower than in the previous quarter but in line with the comparable quarter of However, general provisioning policy of the bank remains conservative. Coverage ratio remained sufficient at 107% for 1 day+ overdue and 146% for 90 days+ overdue. Net profit, RUB bln 0,317 Net profit +65.9% 0,395 0, % 0,471 0,526 - Bottom-line is gradually expanding for the 8 th quarter in a row. Thus, net profit for Q surged by 66% YoY and 12% QoQ. Q1 11 Q2 11 Q3 11 Q4 11 Q

29 NIM: repricing on both sides of the balance sheet NIM development 5,1% 3,2% NIM Interest Spread 6,3% 6,4% 7,1% 6,9% 4,3% 4,6% 4,9% 4,7% Spread composition 9,8% 5,1% Yield on earning assets (net) Cost of funds Spread (net) 10,6% 10,4% 10,7% 10,8% 6,3% 6,4% 7,1% 6,9% 4,7% 4,3% 4,0% 3,7% 4,0% Q Q Q Q Q Q Q Q Q Q Key points 0,10% -0,19% -0,06% -0,12% Yields on earning assets kept increasing due to higher interest rates on loans and securities book, despite major part of new loans was attracted in the end of the quarter restraining further growth 4,91% Q4 NIM Loans effect Deposits effect Other Base effect 4,68% Q1 NIM Cost of funds rose to 4,0% after a bottom in Q4 11 as higher deposit rates started to filter through P&L NIM composition improved for the year to 4,7% from 3,2% in Q1 11. It peaked in Q4 11 and mildly decreased in Q1 12 due to outpacing growth of interest expenses 29

30 Fees and commissions Strong non-interest income based on long-term relations with customers 20% 24% 19% 26% Share of non-interest income in total operating income b.p. 4% 17% 25% 53% 37% 0,0% 1,0% 2,0% 3,0% 4,0% * Vbank data as of 1Q 12, Peer1, Peer2, Peer 3, Peer 4 FY2011 Net fee margin 20% 13% 3% vbank peer 1 peer 2 peer 3 Non-interest income breakdown by segments Cards Financial Retail business Q Q Corporate business Cards Retail business Financial 64% Corporate business Net fee income distribution Settlements Cash transactions Other Cards % Q Q Q Q Q Key points +11.9% RUB mln Despite subdued business activity in the beginning of the year net fee margin of the bank remained one of the highest among peers and stood at 2.5% in Q Net fee income delivered 11,9% growth versus comparable period of 2011 on the back of higher fees from cash and settlement operations as well as operations with banking cards After enormous structure of non-interest income is back to normal: corporate business contributed 53%, banking cards business delivered 25% and 17% was delivered by retail segment 30

31 Costs Operating expenses breakdown Cost-to-Income (CIR) ratio RUB mln % Personnel expenses Non-personnel expenses -15.1% ,7% 52,7% 48,7% 72,5% 64,8% 60,0% Q Q Q Q Q Project on optimization of operational model: key steps Q Define standardized formats of branches Focus on front-office operations Monitoring and optimization of manloading Elimination of operating risks Establishment of several regional centers with back-office functions Launch of a centralized back-office Optimization of branch activity Centralization of back-office Target: CIR below 50% Development of the product line Adjustment of IT infrastructure Focus on most popular products and their development to find room for efficiency improvement Shift towards internet and mobile channels of sale Create optimal IT-infrastructure to streamline processes between branches and back-office Centralize IT-budget 31

32 Earnings generation capability ROE, % ROA, % 7,5% 9,1% 9,3% 10,4% 11,2% 0,74% 0,91% 0,94% 1,05% 1,15% Q Q Q Q Q Q Q Q Q Q Value generation Key points * % of average assets 2,7% -1,5% -2,7% Profitability kept rebounding on the back of increased efficiency and improved - ROE for Q reached 11,2%, up from 7,5% in Q ,7% -1,7% -0,4% 1,1% Responsible management of funding base with focus on most attractive lending segments supported by higher operating efficiency contributes to further improvement of revenue generation NIM Non-interest income Provisions HR costs Non-HR costs Tax Net profit 32

33 Capital structure 33

34 Capital structure Shareholding structure Structure as of Chairman 31% Others 23% 46% More than 8,000 individuals and 1,000 companies are among our shareholders with professional investors owning more than 37% Share price on MICEX Shares Rubles Major shareholders As per MICEX data Volume Volumes of trading (shares) Last price SHAREHOLDER STAKE IN EQUITY H H H H H H Dmitry L. Orlov (Chairman) 30.70% Otar L. Margania (Chairman of the Board of Directors) 18.65% JPM International Consumer Holding Inc. 9.37% Total 58.72% MICEX 2,006, , , , , ,502 RTS 172, , , ,333 65,303 82,098 German stock 30,599 25,443 33,358 24,054 13,444 3,255 exchanges (ADR) Sub-total (stock 2,209, ,126 1,016, , , ,855 exchanges) OTC 1,808,693 3,463,307* 903,256 1,109,859 1,080,856 2,141,597 Total 4,018,186 4,437,433 1,919,922 2,064,327 1,711,147 3,119,452 *Volume growth associated with strategic deals 34

35 High level of corporate governance MANAGEMENT STRUCTURE CHAIRMAN OF THE MANAGEMENT BOARD Mr. Dmitry Orlov HR and Compensation Committee GENERAL MEETING OF SHAREHOLDERS BOARD OF DIRECTORS 12 members 9 are non-executive 6 independent AUDITOR PricewaterhouseCoopers System of control Audit committee Audit commission Internal Control and Audit Service Risk Management The arrows represent the authorities to appoint or elect the relevant Bank s bodies and the External Auditor Continuing excellent reputation recognition: Vbank was awarded as the Bank of the Year in Russia in 2010 TOP - 5 Russia s best governed companies MANAGEMENT BOARD 12 members 6 Deputy Chairmen The most shareholder transparent bank in Russia 2006, 2007, Timely information provision to investors - Full disclosure on web-site - Quarterly IFRS financial reporting with web-cast presentations - Financial reports under IFRS audited from Solid and professional team the Bank is well informed on the principles of corporate governance and proves to be very much interested in the future improvement of the practice of corporate governance 2004 Dmitry Orlov is included in top10 of the best bank s managers

36 Investment Summary S O U N D S T R A T E G Y B U S I N E S S S T R E N G T H S Successfully passed through recent crises ( ,1998, 2004, 2008) Business model generating solid fees & commissions (40% of revenue) 20 years of organic growth focused on core regions and clients 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 one on mortgages Broad product line based on advanced IT-solutions One of the most transparent FI in Russia - 1 in Information Transparency to Shareholders by S&P 2007, 2006 Management Board (12 members) totally has more than 200 years of banking experience leading by Chairman with 40 years in Soviet and Russian banking systems Moody s Ba3 (Stable) confirmed in Nov 10, S&P sticks to BB- (Stable) upgraded in Sept 11 Positive track-record of communication with investors H I G H S T A N D A R D S Ongoing Financial pressure markets on turbulence lending rates driven by state banks Limited Threat of demand global from economy key client slowdown sector SME Still high potential credit credit risk risk C U R R E N T C H A L L E N G E S 36

37 Investor Relations contacts Elena Mironova, Deputy head of IR , Svetlana Fedotova, IR specialist , Follow us on Twitter: 37

38 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. 38