HERITAGE OF YOUR PROSPERITY Moody s B3/NP/E+; Baa2.ua
2 KEY INVESTMENT CONSIDERATIONS Industry leader in retail innovations Ambitious and professional management team Audited according to IFRS since 2003 Solid customer base Good quality of the loan portfolio with the lowest NPL rates in Ukraine (below 1%) The most dynamically developing bank on the market: - In 2005 the bank increased its assets by 122%, more than doubling the sector s 59% growth rate. - RODOVID s customer lending grew by 476% in 2005 (vs. the sector s 63% growth) Total Revenues (USD mln) Net Income (USD mln) Total assets (USD mln) Loan Portfolio (USD mln) Equity (USD mln) Bank 2004 2005 2006E 2004 2005 2006E 2004 2005 2006E 2004 2005 2006E 2004 2005 2006E Aval 244 324 454 39 51 93 2.142 3.756 5.273 1.496 2.388 3.639 167 303 505 Growth (% y-o-y) 32% 33% 40% 201% 32% 83% 19% 75% 40% 22% 60% 52% 39% 81% 67% Forum 24 36 69 4 6 10 342 736 1.420 230 447 955 46 88 131 Growth (% y-o-y) 88% 50% 91% 131% 65% 58% 57% 115% 93% 67% 95% 113% 83% 92% 48% Ukrsotsbank 112 153 212 21 30 51 1.307 2.085 2.841 720 1.350 2.014 154 192 302 Growth (% y-o-y) 24% 36% 39% 94% 44% 66% 39% 59% 36% 39% 87% 49% 91% 25% 57% RODOVID BANK 6 14 38 1 2 6 164 363 804 43 250 629 30 33 89 Growth (% y-o-y) 357% 140% 178% 200% 281% 193% 506% 122% 121% 626% 476% 152% 143% 11% 166%
3 GENERAL INFORMATION RODOVID BANK is an assignee of the JSCB Perсombank established on July 17, 1990 RODOVID BANK was registered by the NBU in October 2004 under a banking license 27 Key financial indicators as of 01.01.2006 (IFRS): Net Assets = 363 mln. USD Capital Book Value = 33 mln. USD On 13 th of May General Shareholders Meeting approved increase of capital by 50 mln. USD. Today RODOVID BANK became one of the most dynamic and fast developing banks in Ukraine and improved it s ratings considerably. RODOVID BANK growth compared to the banking sector RODOVID BANK rating positions on Ukrainian market 1200% Asset Growth 1101% 2003 2004 2005 2q06 Growth* 1000% Corporate Landing Growth Assets 94 35 27 29 65 800% 600% 400% 200% Retail Lending Growth 201% 67% 138% 57% 69% 44% 403% 122% Loans to individuals Individual Deposits Corporate Deposits 67 90 110 73 58 73 18 23 26 18 24 27 49 66 83 0% Banking Sector Top 10 Banks Rodov id Bank Net Income * Compared to 01.01.04 74 77 39 33 41
MANAGEMENT TURNAROUND Corporate an Individual Deposits Brought a Professional Team in to the Bank USD mln 350 300 250 200 150 100 50 0 Jan-04 Mar-04 New mgmt takes over May-04 Jul-04 Sep-04 Nov-04 Jan-05 Mar-05 May-05 Individuals Jul-05 Corporates Source: Association of Ukrainian banks (UAS) Sep-05 Nov-05 Jan-06 Jun-06 Established wide client base and signed exclusive long-term contracts with the largest companies in the leading segments of the economy Became market leaders in development of retail projects based on comprehensive IT technologies Obtained Principal membership in VISA and Master Card Development of in-house processing center, allowing to centralize logistics and facilitate further development of cards business 4 With international experience From the biggest Ukrainian banks With the best experience from leading retail banks in Ukraine Implemented new corporate structure and brought Western management standards Developed innovative on-line technologies of sales and risk controls in the Bank Developed own products, based on the best technologies in CIS and Europe USD mln 350 300 250 200 150 100 50 0 Jan-04 Mar-04 New mgmt takes over May-04 Jul-04 Loan Portfolio Sep-04 Nov-04 Jan-05 Mar-05 May-05 Jul-05 Sep-05 Nov-05 Jan-06 Jun-06 Source: Association of Ukrainian banks (UAS)
BRANCHES AND REPRESENTATIVE OFFICES Lutsk Rivne Chernyhiv Sumy Lviv Zhytomyr Kyiv Kharkiv Ternopil Khmelnytskyi Poltava Uzhgorod Ivano - IvanōFrankivsk Vinnytsia Cherkasy Dnipropetrovsk Luhansk Donetsk Chernivtsi Kirovohrad Regions with active branches Zaporizhzhia Mariupol Branches under construction Number of working branches of RODOVID BANK - 47 Odesa Mykolayiv Kherson Number of Scoring Points of RODOVID BANK- 63 Symferopol 5
6 KEY CORPORATE CLIENTS AMSTOR BYTTECHNIKA City.com T.M.M. Group MOTOR SICH AVK AZOVMASH MMZ Istil (Ukraine) EUROCAR GEFEST VALMI AUTOMOTIVE Unitrade Western Oil & Gas Company Supermarket chain Home appliances mall Electronics mall Construction and development Aircraft and chopper engines Confectionary Machine building Metallurgy Car assembling (VW Group) Oil and gas wholesale & retail Automobile spare parts Electronics stores Oil and gas wholesale & retail
KEY FINANCIAL HIGHLIGHTS Total Assets and ROAA Total Equity and ROAE 2000 2.5% 250 25.0% 1600 2.0% 200 20.0% USD mln 1200 1.5% 800 1.0% 400 0.5% 0 0.0% 2003 2004 2005 2006E 2007F 2008F Total Assets ROAA USD mln Source: Independent Auditors Reports for 2003, 2004 and 2005 by BDO Audit Loan Portfolio 2000 6.0% 5.0% 1500 4.0% 1000 3.0% 500 2.0% 1.0% 0 0.0% 2003 2004 2005 2006E 2007F 2008F Gross Customer Loans NPL LLR Source: Independent Auditors Reports for 2003, 2004 and 2005 by BDO Audit 7 150 15.0% 100 10.0% 50 5.0% - 0.0% 2003 2004 2005 2006E 2007F 2008F Total equity ROAE Source: Independent Auditors Reports for 2003, 2004 and 2005 by BDO Audit Loan Portfolio Diversification Agriculture and food - 3% Extractive indus try - 2% Manufacturing - 15% Construction - 1% Trade-related loans - 33% Trans portation - 7% Financial services - 15% Real estate and other - 6% Individuals - 17% Accrued interest - 1% Source: Independent Auditors Reports for 2005 by BDO Audit
8 KEY FINANCIAL HIGHLIGHTS Cont d Net Interest and Net Non-Interest Income Net Interest Margin USD mln 140 120 100-80 60 40 20 2003 2004 2005 2006E 2007F 2008F 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1,500 1,200 900 600 300 0 2003 2004 2005 2006 2007 2008 8% 7% 6% 5% 4% 3% 2% 1% 0% Net non-interest income Net interest income Cost/income ratio Average Earning Assets (USD mil.) Net Interest Margin (%) Source: Independent Auditors Reports for 2003, 2004 and 2005 by BDO Audit Source: Independent Auditors Reports for 2003, 2004 and 2005 by BDO Audit Asset Structure Liabilities Structure 100% 80% 60% 40% 20% 0% 23.3% 43.3% 9.1% 21.9% 2.4% 8.1% 8.5% 48.7% 26.5% 3.7% 2.0% 1.5% 5.2% 4.3% 3.4% 8.2% 6.6% 13.6% 68.8% 1.3% 2.5% 5.8% 78.2% 80.9% 82.8% 8.3% 8.6% 7.3% 7.5% 7.7% 2003 2004 2005 2006E 2007F 2008F Cash and Equivalents Customer Loans Due from banks Fixed Assets Other Assets 100% 80% 60% 40% 20% 0% 9% 46% 36% 9% 2% 5% 18% 9% 11% 9% 11% 63% 72% 17% 14% 3% 3% 3% 62% 66% 67% 24% 22% 20% 2003 2004 2005 2006E 2007F 2008F Due to banks Due to clients Shareholders equity Other liabilities
RETAIL + INNOVATIONS 9
RETAIL BANKING CONSUMER LENDING 63 points-of-sale in the retail chains Database of RODOVID BANK clients for 15 years period Another 21 outlets ready to launch in the next month Typical consumer lending agreement terms: The loan without an obligatory first payment*. The minimum sum of the loan 450 UAH, the maximum sum of the loan 24 500 UAH. Registration time of the loan from 23 minutes. During this time credit funds are charged to the current account of the seller. Only the passport and the original ID number is necessary for the loan application. (The loan without income statement)* Loan payment can be made at in any branch of RODOVID BANK or any other bank by requisites specified in the schedule of repayment *At cost of the goods up to 5000 UAH 10
RETAIL BANKING Cont d Our partners Receipt and itinerary Choice of goods 1 2 Fill in and sign documents 7 Bank/ Scoring Platform Store 3 6 Fill in the questionnaire Receive goods Credit agreement Collateral agreement Repayment schedule 8 Issue or don t issue Customer s questionnaire Seller s account 5 4 Information necessary for decision making Decision on loan issue Bank: Underwriting center 11 9 Transfer of payment for goods Seller: Goods dispatch
RETAIL BANKING Cont d Today the development of the sales market for Ukrainian population in our opinion requires: Developments of various schemes and mechanisms of loyalty programs of the sellers for consumers. Providing to the consumers the necessary financial resources (loans) for realization of a desired purchase. The solution for solving these tasks could be a bonus credit card based on the international payment system Visa or Master card. RODOVID BANK is a Visa and MasterCard Principal Member 12
13 Universal Processing Center Gas stations network Bank Sales terminals network Sales points network ATM network PROCESSING CENTER Accounting of Bonuses, Discounts, Payments Malls network Information points network
14 Universal Processing Center CREATION OF UNIVERSAL PROCESSING CENTER FOR ACCOUNTING OF BONUSES, DISCOUNTS, PAYMENTS ON INDUSTRIAL SCALE Supports emission of tens of millions credit cards Connection of up to tens of thousands peripheral devices (POS terminals, ATMs, information points) Allows to process hundreds of millions transactions Merging of all seller s networks into uniform accounting center A unique technology of uniting the client bases of separate networks OUTSOURSING processing of other banks payments in VISA and Master Card system
RETAIL BANKING Cont d Co-branded bonus credit (debit) CARD This international payment system VISA card is accepted in cash points and sales points This card accumulates on the separate account the bonus points from purchases sold by our PARTNERS for cash or by using the credit card The card has a credit limit set up The Card doesn t have the owners name written on it, therefore it takes 15 minutes to issue such card given that the passport and the personal ID number are available 15
16 CO-BRANDING PROJECTS ADVANTAGES 1. Increase of the Partner s turnover due to credit resources of the Bank. 2. Additional instrument for keeping the customers 3. Creation of cross-selling, that allows the Partners to mutually increase the client base. 4. The company doesn t loose its individuality, since it chooses itself the structure of its loyalty program. 5. The joint bonus credit card is more convenient for the client and carries more value, than a standard payment card of one company. 6. The issue of the co-branding card reduces considerably for the Partners the expenses that would have been spent on the independent introduction of loyalty programs. 7. The ability to combine the marketing programs of the Partners allows to reduce the general expenses on advertisement.
RETAIL BANKING - CASE STUDY (1) UMC Agreements signed: on cooperation; confidentiality; on realization of joint bonus payment program. Emission 500 000 cards 200 USD credit limit credit portfolio 100 mln. USD Four brands are brought together: RODOVID BANK, UMC, Visa и National Olympic Committee of Ukraine Loyalty scheme presents in exchange for bonus points 17
RETAIL BANKING - CASE STUDY (2) BYTTEKHNIKA Agreements signed: on cooperation; confidentiality; on realisation of joint bonus payment program. Emission 110 000 cards 100 USD credit limit Loyalty scheme presents from «BYTTEKHNIKA» in exchange for bonus points 18
RETAIL BANKING - CASE STUDY (3) GEFEST Agreements signed: on cooperation; confidentiality; on realization of joint bonus payment program. A segment of a stable client base Wide network for acquiring New opportunities for lending using cards the alternative to petrol vouchers will be credit card on purchase of petrol Loyalty system: exchange of bonuses for presents 19
20 RETAIL BANKING - CASE STUDY (4) AMSTOR AMSTOR undisputable leader on the regional market Client base 500 000 Customers Emission 500 000 cards Loyalty system: presents in exchange for bonuses Agreements signed: on cooperation on confidentiality on realization of joint bonus payment program
RETAIL BANKING - CASE STUDY (5) VELYKA KISHENYA One of the leading supermarket chains in Ukraine Pilot Co-Branded Project in Kirovograd has been launched 30 September 2006 Planned emission end of 2006 15 000 cards Buy purchases on credit Loyalty system: presents in exchange for bonuses Agreements signed: on cooperation on confidentiality on realization of joint bonus payment program 21
22 RETAIL BANKING - CASE STUDY (6) LEADER CREDIT retail, credit distributor On the 21.06.2006 the Master Agreement was signed between OJSC RODOVID BANK and CJSC LEADER CREDIT to start the pilot project of scoring express crediting. 250 points of sale already activated By the end of the year more then 1000 points of sale will be activated All loans are insured with top insurance company ASKA Net Interest margin with zero risk 7% Since August already issued 10 mln USD Planned to issue 60 mln USD until the end of year 2006
23 PLANS FOR THE NEAR FUTURE Register the announced capital increase of 50 mln USD October 2006 Placement of RODOVID BANK domestic bonds for 20 mln USD October 2006 Participate in international financing programs of EBRD and IFC October 2006 Attract a syndicated loan in the amount of 15 20 mln USD November 2006 Issue of RODOVID BANK CLN s fourth Quarter 2006 Issue of RODOVID BANK Eurobonds first Half 2007 Develop a wide network of Bank s branches and representative offices in all regional centers up to 200 operating outlets by end 2006 to gain nationwide coverage Issue up to 1mln credit cards jointly with RODOVID BANK s corporate partners by end of 2006
24 CONTACT INFORMATION Denis Gorbunenko, CEO Sergey Bubka, President Dmitriy Egorenko, First Deputy CEO Tel/Fax: (+38 044) 255 8620 Fax: (+38 044) 255 8148 E-Mail: DGorbunenko@rodovidbank.com Tel/Fax: (+38 044) 255 8620 Fax: (+38 044) 255 8148 E-Mail: SBubka@rodovidbank.com Tel/Fax: (+38 044) 255 8620 Fax: (+38 044) 255 8148 E-Mail: DEgorenko@rodovidbank.com