VTB · RUS:VTBR

VTB — Q1 2011 Earnings Presentation

35 slides from VTB's earnings presentation, Jul 18, 2011

  1. Slide 1: VTB Group 1Q'2011 Results and Update on TransCreditBank & Bank of Moscow

    VTB Group 1Q’2011 Results and Update on TransCreditBank & Bank of Moscow Herbert Moos CFO, Deputy Chairman of the Management Board July 18, 2011 1 © VTB 2011 2011

  2. Slide 2: Forward-looking statements disclaimer

    Some of the information in this presentation may contain projections or other forward-looking forward looking statements regarding future events or the future financial performance of JSC VTB Bank ("VTB") and its subsidiaries (together with VTB, the "Group"). Such forward-looking statements are base

  3. Slide 3: Agenda

    Agenda 1. Bank of Moscow – Update 4 2. Delivering on TransCreditBank 10 3. 1Q’2011 Results 15 4 Progress 4. P on VTB Group’s G ’ Strategy St t 29 5. Summary and Outlook 31 6. Appendix 33 3 © VTB 2011 2011

  4. Slide 4: Agenda: Bank of Moscow – Update

    Agenda 1. Bank of Moscow – Update 4 2. Delivering on TransCreditBank 10 3. 1Q’2011 Results 15 4 Progress on VTB Group’s Strategy 4. 29 5. Summary and Outlook 31 6. Appendix 33 4 © VTB 2011 2011

  5. Slide 5: Bank of Moscow – Acquisition with Compelling Rationale

    Bank of Moscow – Acquisition with Compelling Rationale  Solid franchise despite recent turmoil – Over 100,000 corporate clients and over 6.5 mln active retail customers – Strong branch network totaling 381 across Russia and over 1,900 ATMs – Strong brand in Moscow and Moscow region  Access to Mosc

  6. Slide 6: Bank of Moscow – Acquisition milestones

    Bank of Moscow – Acquisition milestones Timeline Due diligence based on information provided by the major shareholder the City of Moscow and audited Feb 2011 financial accounts 46.48% stake in BoM acquired from the City of Moscow (for RUB 92.8 bn) and 25%+1 share stake in Metropolitan Insurance Grou

  7. Slide 7: Bank of Moscow – Sound Support Plan in Place

    Bank of Moscow – Sound Support Plan in Place  Chosen support plan optimal in current situation for BoM, VTB Group and the Russian Government  VTB Group expects to buy minimum 75% stake in BoM  The D Th Deposit it IInsurance A Agency expected t d tto iissue up tto RUB 295 bn b 10 10-year loan l tt

  8. Slide 8: Bank of Moscow Loan Portfolio Quality

    Bank of Moscow Loan Portfolio Quality (1) 30-Sep-2010 31-Dec-2010 31-Dec-2011 Gross Allowance Provisioning Gross Allowance Provisioning Gross Allowance Provisioning (in RUB bn) for loan f loan for l f loan for l loans impairment ratio loans impairment ratio loans impairment ratio Corporate loan port

  9. Slide 9: Bank of Moscow – Key Financial Details and Expected Synergies

    Bank of Moscow – Key Financial Details and Expected Synergies (1) Acquisition Price BoM FY’11 Outlook T t l price Total i paid id RUB 258 b bn Loan book growth 18% BV after recapitalisation RUB 170 bn Net profit RUB 3 bn P/BV ≈ 1.5x ROE 4% Expected Cost Synergies (in RUB bn) 3 years Regional network

  10. Slide 10: Agenda: Delivering on TransCreditBank

    Agenda 1. Bank of Moscow – Update 4 2. Delivering on TransCreditBank 10 3. 1Q’2011 Results 15 4 Progress 4. P on VTB Group’s G ’ Strategy St t 29 5. Summary y and Outlook 31 6. Appendix 33 10 © VTB 2011 2011

  11. Slide 11: TransCreditBank – Acquisition with Strategic Fit

    TransCreditBank – Acquisition with Strategic Fit  Fits strategic model; brings strong client base and is ROE accretive  Corporate Banking opportunities – financing of Russian Railways Group and other clients – funding from increased deposits and account balances – transaction banking services incl

  12. Slide 12: TransCreditBank – Description of the Deal

    TransCreditBank – Description of the Deal Timeline 43.18% stake acquired from minority shareholders at RUB 21 per share Dec 2010 VTB Group consolidated TCB in its FY’10 IFRS statements based on potential voting rights 0.31% stake acquired from minority shareholders through a mandatory offer to 2Q’20

  13. Slide 13: TransCreditBank – Key Operational and Financial Details

    TransCreditBank – Key Operational and Financial Details Top-11 by Geographic Coverage (1) Key Financial Indicators  290 offices in 197 cities across Russia ((in RUB bn)) 2008 2009 2010  c. 2,400 ATMs and c. 4,000 POS Total assets 244.4 258.6 390.9 terminals Net loans to customers 141.6 143.3 203.9

  14. Slide 14: TransCreditBank – Integration Plan and Expected Synergies

    TransCreditBank – Integration Plan and Expected Synergies Integration Milestones Expected Cost Synergies  TCB will be integrated g into VTB Group p by y 2013: (in RUB bn) 3 years – Functional integration of both corporate and retail banking Regional network 2.0 into relevant segment managements Adm

  15. Slide 15: Agenda: 1Q'2011 Results

    Agenda 1. Bank of Moscow – Update 4 2. Delivering on TransCreditBank 10 3. 1Q’2011 Results 15 4 Progress 4. P on VTB Group’s G ’ Strategy St t 29 5. Summary y and Outlook 31 6. Appendix 33 15 © VTB 2011 2011

  16. Slide 16: VTB Group 1Q'2011 Highlights

    VTB Group 1Q’2011 Highlights ■ Record quarterly net profit in 1Q’2011 − RUB 26.1 bn ■ Corporate Investment Banking and Retail Banking post a solid 1Q’2011 pre-tax profit of RUB 23.2 bn and RUB 8.2 bn, respectively ■ Operating income before provisions up 26% y-o-y to RUB 72.9 bn ■ Solid growth of net

  17. Slide 17: VTB Group 1Q'2011 Financial Highlights

    VTB Group 1Q’2011 Financial Highlights (in RUB bn) 1Q'11 4Q'10 q-o-q 1Q'10 y-o-y Net interest income before provisions 46.0 41.6 10.6% 42.0 9.5% Net fee and commission income 8.0 6.9 15.9% 5.1 56.9% Net result from financial instruments 97 9.7 68 6.8 42 6% 42.6% 84 8.4 15 5% 15.5% Operating income b

  18. Slide 18: Segment Update

    Segment Update 18 © VTB 2011 2011

  19. Slide 19: Consolidated Loan Portfolio

    Consolidated Loan Portfolio Corporate Loans (Gross) Loans to Individuals (Gross) -0.4% +2% 542 555 3 4 419 53 54 2,518 2,508 4 2,121 46 285 268 191 n) (RUB bn (RUB bn)) 179 217 213 31-Mar-10 31-Dec-10 31-Mar-11 31-Mar-10 31-Dec-10 31-Mar-11 Mortgage g g loans Consumer loans and credit cards Car loan

  20. Slide 20: Segment Analysis

    Segment Analysis CIB (1) Retail Banking TCB Other (2) (i RUB b (in bn)) 1Q'11 1Q'10 y-o-y 1Q'11 1Q'10 y-o-y 1Q'11 1Q'10 y-o-y 1Q'11 1Q'10 y-o-y Net interest income 23.0 26.7 -13.9% 15.1 12.8 18.0% 5.6 - n/a 2.3 2.5 -8.0% Net fee & commission i income 33 3.3 26 2.6 26 9% 26.9% 32 3.2 22 2.2 45 5% 45.

  21. Slide 21: Corporate Investment Banking

    Corporate Investment Banking Segment Data (1) - Total CIB Loans (Gross) Segment Data (1) - Total CIB Deposits -2% 9% 1,892 1,854 1,148 1,256 RUB bn) RUB bn) (R (R 31-Dec-10 31-Mar-11 31-Dec-10 31-Mar-11 VTB Capital League Tables Key Developments  L Loan d demand d started t t d slowly l l recoverin

  22. Slide 22: Corporate Investment Banking: Financial Highlights

    Corporate Investment Banking: Financial Highlights (1) Investment Banking Loans and Deposits Transaction Banking Total (2) (in RUB bn) 1Q'11 1Q'10 y-o-y 1Q'11 1Q'10 y-o-y 1Q'11 1Q'10 y-o-y 1Q'11 1Q'10 y-o-y Net interest income 2.4 2.1 14.3% 19.0 22.8 -16.7% 1.6 1.8 -11.1% 23.0 26.7 -13.9% Net fee an

  23. Slide 23: Retail Banking in Russia

    Retail Banking in Russia Segment Data (1) - Loans to Individuals (Gross) Market Shares in Russia 5% 12.2% 12.5% 10 5% 10.5% 483 508 7.2% 7.4% 5.9% bn) (RUB b 31-Mar-10 31-Dec-10 31-Mar-11 31-Dec-10 31-Mar-11 % Retail loan market % Retail deposit market share in Russia share in Russia Segment Data (1

  24. Slide 24: Financial Update

    Financial Update 24 © VTB 2011 2011

  25. Slide 25: Solid Operating Income Growth

    Solid Operating Income Growth Operating Income before Provisions (y-o-y) Operating Income before Provisions (q-o-q) +25% +21% 72 9 72.9 72 9 72.9 8.0 60.4 8.0 58.1 9.7 9.7 6.9 5.1 8.4 9.2 6.8 9.2 2.6 5.1 (RUB bn) (RUB bn) 42.0 46.0 41.6 46.0 1Q'10 1Q'11 4Q'10 1Q'11 Net interest income before provisi

  26. Slide 26: Costs Remain under Control

    Costs Remain under Control Staff and Administrative Expenses (y-o-y) Staff and Administrative Expenses (q-o-q) +49% +22% 45 3% 45.3% 45 3% 45.3% 38.2% 44.9% 33.0 33.0 27.1 22.2 13.1 13.1 13.7 bn) bn) 9.2 (RUB b (RUB b 19.9 19.9 13.0 13.4 1Q'10 1Q'11 4Q'10 1Q'11 Staff costs (1) Administrative expense

  27. Slide 27: Asset Quality Improving

    Asset Quality Improving Quarterly P&L Provision Charge (2) (y-o-y) Quarterly P&L Provision Charge (2) (q-o-q) -50% -32% 2 5% 2.5% 1.1% 1.4% 1.1% (RUB bn) (RUB bn) 15.5 7.7 11.3 7.7 1Q'10 1Q'11 4Q'10 4Q 10 1Q'11 Provision charge for impairment of debt Provision charge for loan impairment/ Average gro

  28. Slide 28: Healthy Balance Sheet Structure and Strong Capital Base

    Healthy Balance Sheet Structure and Strong Capital Base Assets Structure Net Interest Spread, y-o-y 4,448 Average cost of interest bearing liabilities 4,291 Net interest spread Average yield on interest earning assets 6% Cash and 3,753 7% 3,628 10% mandatory 10.4% 10.4% 3 362 3,362 11% 9 8% 9.8% 9.3

  29. Slide 29: Agenda: Progress on VTB Group's Strategy

    Agenda 1. Bank of Moscow – Update 4 2. Delivering on TransCreditBank 10 3. 1Q’2011 Results 15 4 Progress 4. P on VTB Group’s G ’ Strategy St t 29 5. Summary y and Outlook 31 6. Appendix 33 29 © VTB 2011 2011

  30. Slide 30: VTB's 'Road to 15' Strategy: Delivered as Promised so far, Targets Upgraded

    VTB’s ‘Road to 15’ Strategy: Delivered as Promised so far, Targets Upgraded VTB Group Net Profit and ROE Targets 2013 ≈20% 160-180 >15% 120-140 ROE 10.3% % 100 88 new neg. 54.8 new old target 50 old target target RUB bn) target neg. target 1Q: 26 26.1 1 (R 2009 2010 2011 2013 Large-scale Transformat

  31. Slide 31: Agenda: Summary and Outlook

    Agenda 1. Bank of Moscow – Update 4 2. Delivering on TransCreditBank 10 3. 1Q’2011 Results 15 4 Progress 4. P on VTB Group’s G ’ Strategy St t 29 5. Summary and Outlook 31 6. Appendix 33 31 © VTB 2011 2011

  32. Slide 32: Summary & Outlook

    Summary & Outlook ■ Bank of Moscow clean up and strong market position in Moscow position the Bank for effective growth, profit of RUB 3 bn already in 2011 ■ TransCreditBank performing better than planned – improved net profit target 2011 from RUB 8 bn to RUB 9 bn ■ Transformation under strategic pl

  33. Slide 33: Agenda: Appendix

    Agenda 1. Bank of Moscow – Update 4 2. Delivering on TransCreditBank 10 3. 1Q’2011 Results 15 4 Progress 4. P on VTB Group’s G ’ Strategy St t 29 5. Summary y and Outlook 21 6. Appendix 33 33 © VTB 2011 2011

  34. Slide 34: VTB Group Public Debt Instruments

    VTB Group Public Debt Instruments VTB Group Public Debt Instruments Outstanding Public Debt Repaid in 2011 (1) Equivalent Maturity Amount Borrower amount Instrument Date/Put or Coupon Borrower Instrument Repayment Date Coupon (mln)(1) (USD, mln)(1) Call Option 2011 Members of Loans repayment / Janua

  35. Slide 35: VTB Group International Public Debt Instruments Issued in 2010-2011

    VTB Group International Public Debt Instruments Issued in 2010-2011 Borrower Date of issue Amount (mln) Instrument Maturity date Coupon/rate VTB March 2010 USD 1,250 Series 7 EMTN 2 March 2015 6.465% VTB August 2010 SGD 400 Series 8 EMTN 2 August 2012 4.2% VTB August g 2010 CHF 400 Series 9 EMTN 2 A

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