Vtb · RUS:VTBR
Vtb — Investor Presentation (December 2017)
39 slides from Vtb's investor presentation, December 2017
Slide 1: VTB Group Investor Presentation
VTB GROUP INVESTOR PRESENTATION December 2017 1
Slide 2: Disclaimer
Some of the information and/or statements in this presentation may contain projections or other forward-looking statements regarding future events or the future financial performance of VTB Bank (PJSC) and its subsidiaries. Such forward-looking statements are based on numerous views and assumptions
Slide 3: Agenda
VTB at a Glance 4 Macro Environment in Russia 10 Business Overview 13 Strategy and Guidance 17 Areas of Transformation 21 Financials 25 Appendix 35 3
Slide 4: VTB at a Glance
VTB at a Glance 4
Slide 5: Overview of VTB Group
OVERVIEW OF VTB GROUP Client base Employees Industry leading franchise Market shares in Russia 11m2017 23.5 mln 98 worldwide thsd 15.8% 22.6% Global presence Assets Loans to Deposits of legal entities legal entities 22 12.9 countries RUB trln Branch network Market cap 18.6% 12.5% Loans to Deposits o
Slide 6: VTB Group Corporate Developments: Mix of Mergers and Organic Growth
VTB GROUP CORPORATE DEVELOPMENTS: MIX OF MERGERS AND ORGANIC GROWTH Legal merger with VTB Bank (May’16) Launch of Post Bank Organic growth Leto Bank Legal merger with VTB Bank (Jan’18) 2004 2005 2008 2010 2011 2013 2016 2018 M&A deals Guta Bank Promstroibank VTB at a Glance Macro Business overview S
Slide 7: VTB Ownership Structure and Capital Composition
VTB OWNERSHIP STRUCTURE AND CAPITAL COMPOSITION Structure of equity capital Structure of voting rights Ordinary shares (held by Federal Federal Agency for State Agency for State Property Management) Property Management 12.1% 19.9% 60.9% Ordinary shares in free float 7.8% Institutional investors Free
Slide 8: VTB Corporate Governance System
VTB CORPORATE GOVERNANCE SYSTEM Elects Independent Auditor Approves Statutory Audit General Meeting Reports Commission of Shareholders Elects Reports Appoints Elects Strategy and Supervisory Council Prepares Prepares Corporate recommendation 11 members recommendation Governance 36% independent direc
Slide 9: VTB Group Operating Model in Line with Best Global Practices
VTB GROUP OPERATING MODEL IN LINE WITH BEST GLOBAL PRACTICES Corporate-Investment Banking Retail Business Mid-Corporate Banking 11m17 RUB 6,689 bn RUB 4,985 bn RUB 1,013 bn Assets Large corporate clients Small corporate clients and individuals Mid-corporate clients (revenue > RUB 10 bn) (revenue <RU
Slide 10: Macro Environment in Russia
Macro Environment in Russia 10
Slide 11: Macro Environment in Russia
MACRO ENVIRONMENT IN RUSSIA Oil price USD and exchange rate RUB Inflation and CBR key rate USD/RUB CBR key rate (CBR avg) 61.3 66.8 12.6% 58.3 (avg) (1) 10.6% 38.6 9.2% 31.9 7.9% 5.5% Oil price CPI inflation 12.9% (Urals, avg) (avg) 11.4% 108.0 98.0 6.5% 52.0 52.1 5.4% 42.0 3.9% 2013 2014 2015 2016
Slide 12: Russian Banking Sector Dynamics
RUSSIAN BANKING SECTOR DYNAMICS Corporate loan market in Russia RUB bn Retail loan market in Russia RUB bn 11m17 update 11m17 update 30-Nov-17 YTD 30-Nov-17 YTD -10% -0% RUB 30,180 bn 0.2% RUB 12,006 bn 11.1% 33,301 +8% 29,536 30,135 30,051 +1% 22,499 11,660 11,331 10,684 10,804 9,957 31-Dec-13 31-D
Slide 13: Business Overview
Business Overview 13
Slide 14: VTB Business with Legal Entities
VTB BUSINESS WITH LEGAL ENTITIES Loans to legal entities RUB bn Deposits of legal entities RUB bn 11m17 update 11m17 update 30-Nov-17 YTD 30-Nov-17 YTD Share of corporate in total loans RUB 7,195 bn -1.6% Share of corporate RUB 5,584 bn 28.6% in total deposits 79% 81% 77% 77% 75% 62% 63% 59% 60% 59%
Slide 15: VTB Capital: Best Investment Bank in Russia
VTB CAPITAL: BEST INVESTMENT BANK IN RUSSIA #1 in Investment Banking in Russia #1 ECM bookrunner in Russia and the CIS Bank Fees USD mln % share Bookrunner Deal value USD mln % Share # of deals VTB Capital 76.9 28.2 VTB Capital 693 18.9 6 2 Sberbank CIB 29.5 10.8 2 Deutsche Bank 589 16.0 3 3 Gazprom
Slide 16: VTB Business with Individuals
VTB BUSINESS WITH INDIVIDUALS Loans to individuals RUB bn Deposits of individuals RUB bn 11m17 update 11m17 update 30-Nov-17 YTD 30-Nov-17 YTD Share of retail Share of retail RUB 2,485 bn 14.2% in total deposits RUB 3,432 bn 14.2% in total loans 23% 23% 25% 41% 38% 40% 41% 21% 19% 37% Cash loans & o
Slide 17: Strategy and Guidance
Strategy and Guidance 17
Slide 18: 2017–2019 Strategy: Key Targets and Initiatives
2017–2019 STRATEGY KEY TARGETS Reliable profitable Long-term Integrated Group High-tech bank – Balanced strategy bank that provides relationships with with efficient market leader in of business in stable target level the customer for all interaction between customer service foreign markets ROE prod
Slide 19: 2017 Guidance
2017 Guidance Russia Macro Banking sector Balance sheet Efficiency & profitability GDP growth Loans growth Loans growth vs СoR legal entities market legal entities Revised upwards Revised downwards 1.7% <3% In line Below 2% CPI Loans growth Loans growth vs NIM individuals market individuals Revised
Slide 20: 2018–2019 Management Expectations and Targets
2018–2019 MANAGEMENT EXPECTATIONS AND TARGETS GDP growth CPI Oil price (Urals), avg CBR key rate, eop ’18 8% ≈2.0-2.5% ≈4.5-5.0% $60 ’19 7% Banking sector 3Y CAGR 2017-2019 Loans growth Loans growth Deposits growth Deposits growth legal entities individuals legal entities individuals 8% 12% 8% 10% V
Slide 21: Areas of Transformation
Areas of Transformation 21
Slide 22: Post Bank: Driving VTB Retail Business
POST BANK: DRIVING VTB RETAIL BUSINESS Development of Post Bank Post Bank today 5.9 mln clients 2012 – 2016 12.4 thsd outlets in more than 4,300 localities Focus on high risk lending 4.0 thsd ATMs Mass segment Funding provided by second-largest retail lending, including VTB Group Business banking ne
Slide 23: Integration of VTB and VTB24 Banks
INTEGRATION OF VTB AND VTB24 BANKS VTB Supervisory Council decided to merge VTB24 with VTB Bank Legal merger with VTB Bank Guta Bank acquisition January 2018 Transition to universal bank platform Full operational & technological 2004 2016 2018 integration 1 2 3 4 Build a highly Achieve INTEGRATION S
Slide 24: VTB Digital Transformation
VTB DIGITAL TRANSFORMATION Key KPIs 2019 IT strategy 2017-2019 Improve Introduce innovative the efficiency Time to Market of IT technologies investments Increase that provide automatisation additional of end-to-end sources of Reduce the launch time processes using modern technology income and create
Slide 25: Financials
Financials 25
Slide 26: Balance Sheet Structure
BALANCE SHEET STRUCTURE Assets structure RUB bn Liabilities structure RUB bn +44% 11m17 update 11m17 update 30-Nov-17 YTD +43% 30-Nov-17 YTD +2% 13,645 +2% RUB 12,945 bn 2.8% RUB 11,477 bn 2.7% 12,588 12,894 12,188 12,191 5% 5% 5% 11,175 11,444 4% 11,060 6% 5% 4% 13% 10% 9% 5% 8% 9% 13% 14% <1% Due
Slide 27: Loan Portfolio and Customer Deposits
LOAN PORTFOLIO AND CUSTOMER DEPOSITS Loans and advances to customers RUB bn Customer deposits RUB bn 11m17 update 11m17 update Legal entities Individuals Legal entities Individuals 30-Nov-17 YTD 30-Nov-17 YTD RUB 9,680.3 bn 2.0% RUB 9,016.4 bn 22.7% +1% +7% 8,511 9,066 9,410 9,487 9,334 9,516 9,627
Slide 28: VTB Profitability Metrics
VTB PROFITABILITY METRICS Net interest income RUB bn 11m17 update Provisions charge (1) RUB bn 11m17 update 4.1% 1.6% NIM RUB 420.5 bn CoR RUB 144.3 bn +44% +10% -17% 415.0 +178% -35% 347.3 +19% 316.9 289.1 275.4 4.4% 4.0% 211.2 3.7% 3.4% 178.1 2.6% 99.2 1.8% 1.5% 1.6% 2013 2014 2015 2016 2013 2014
Slide 29: VTB Group 9M'2017 Performance Highlights
VTB GROUP 9M’2017 PERFORMANCE HIGHLIGHTS RUB bn Net interest income Provision charge Net profit RESULTS CONFIRM THE FY GIDANCE AND 9M: 343.7 +11% 9M: 118.2 -19% 9M: 75.3 x2 EFFICIENT EXECUTION OF STRATEGY 11M: 420.5 +11% 11M: 144.3 -19% 11M: 98.8 x2 NIM COR ROE SOLID GROWTH OF CORE REVENUES DRIVEN B
Slide 30: 9M'2017 Net Interest Income & 11M'2017 Update
9M’2017 NET INTEREST INCOME & 11M’2017 UPDATE Net interest income RUB bn and net interest margin % 4.1% 3.7% 3.8% 3.8% 4.1% 4.1% 4.1% +11% 343.7 11m17 update 310.4 +13% 11m17 11m16 y-o-y NII 420.5 378.1 11.2% NIM 4.1% 3.7% 40 bp 103.4 104.6 113.0 114.1 116.6 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 9M'16 9M'17
Slide 31: 9M'2017 Fee and Commission Income & 11M'2017 Update
9M’2017 FEE AND COMMISSION INCOME & 11M’2017 UPDATE Fee and commission income breakdown RUB bn +22% 93.1 +24% 9% Other 76.3 9% Agency fees 6% 8% 9% Operations with securities 33.4 33.3 32.0 7% 11% and on capital markets 13% 27.8 10% 13% 26.8 10% 9% 11% Guarantees and other 7% 10% 6% 7% 7% credit rel
Slide 32: 9M'2017 Provision Charge & 11M'2017 Update
9M’2017 PROVISION CHARGE & 11M’2017 UPDATE Provision charge for impairment of loans and credit related commitments RUB bn 2.5% 1.9% 1.6% 1.9% 1.8% 1.7% 1.2% Cost of risk including credit 1.5% related commitments (1) 2.0% 1.4% 1.8% 1.6% 1.3% 1.2% -19% Cost of risk (2) 145.9 Provision charge -3% 118.0
Slide 33: 9M'2017 Loan Book Quality & 11M'2017 Update
9M’2017 LOAN BOOK QUALITY & 11M’2017 UPDATE Provision for loan impairment RUB bn NPLs (90+) RUB bn Allowance for loan impairment / 11m17 update 11m17 update Total gross loans (1) NPL ratio (2) 30-Nov-17 YTD 30-Nov-17 YTD NPLs Allowance for loan impairment 6.1% -30 bp 6.5% -20 bp RUB 626 bn -1.1% RUB
Slide 34: 9M'2017 Staff and Administrative Expenses & 11M'2017 Update
9M’2017 STAFF AND ADMINISTRATIVE EXPENSES & 11M’2017 UPDATE Staff costs and administrative expenses RUB bn 47.5% 45.8% Cost / Income ratio 44.6% 41.7% 42.4% 46.5% 48.8% Cost / Avg. assets 1.8% 2.0% 1.8% 2.0% 2.0% 2.0% 1.9% 11m17 update 11m17 11m16 y-o-y +8% 45.2% 46.9% -170 bp +13% 185.0 171.6 2.0%
Slide 35: Appendix
Appendix 35
Slide 36: VTB Latest Financial Highlights: P&L and Key Ratios
VTB LATEST FINANCIAL HIGHLIGHTS: P&L AND KEY RATIOS Income statement key indicators Key selected items (in RUB bn) 9M’17 9M’16 Change 3Q’17 3Q’16 Change 11M’17 11M’16 y-o-y Net interest income 343.7 310.4 10.7% 116.6 103.4 12.8% 420.5 378.1 11.2% Net fee and commission income 67.0 55.9 19.9% 23.9 19
Slide 37: VTB Latest Financial Highlights: Balance Sheet
VTB LATEST FINANCIAL HIGHLIGHTS: BALANCE SHEET Balance sheet key indicators Key selected items (in RUB bn) 30-Sep-2017 30-Jun-2017 31-Mar-2017 QoQ 31-Dec-2016 YTD 30-Nov-2017 YTD Gross loan portfolio 9,626.5 9,515.8 9,333.8 1.2% 9,487.0 1.5% 9,680.3 2.0% Loans to legal entities 7,200.4 7,194.2 7,105
Slide 38: VTB Group Public Debt and Hybrid Capital Instruments
VTB GROUP PUBLIC DEBT AND HYBRID CAPITAL INSTRUMENTS Borrower Currency Amount outstanding (mln) Instrument Maturity Date/Put or Call Option Coupon ISIN 2017 VTB USD 2,000 Series 15 EMTN 2 Matured and repaid in April 2017 6.0% XS0814877071 Bank of Moscow USD 400 Public debt instrument (call option) M
Slide 39: Investor Relations
Investor Relations Tel: +7 (495) 775-71-39 e-mail: investorrelations@vtb.ru 39