Investor Presentation

Transcription

1 Version Investor Presentation October 2017

2 Recent developments

3 Overview of measures to improve the financial stability of B&N Bank and Rost Bank On 20 September 2017, the Central Bank of Russia (CBR) provided a credit line to support B&N Bank s liquidity position On 21 September 2017, the CBR announced the implementation of measures targeted at improving the financial stability of B&N Bank and Rost Bank (the Banks ), including the introduction of temporary administrations at both Banks: Under these measures, the Central Bank of Russia is to participate as the main investor in the Banks with funding coming from the Banking Sector Consolidation Fund (BSCF) These measures are being implemented in cooperation with the Banks current owners and management, which will ensure the continuity of their operations, as well as enabling the implementation of all necessary measures to support the Banks development going forward No moratorium on payments under creditors claims is being introduced. No bail-in option will be applied. The Central Bank of Russia will become the controlling shareholder in the Banks with a shareholding in each of not less than 75% and will draw up a sustainable business model, which will enable the Banks to generate stable operating income and develop going forward On 13 October 2017, the Central Bank of Russia approved the plan for its participation in the bail-out of B&N Bank. The plan provides for the provision of funds to support liquidity and for the Bank s recapitalisation The process of financial rehabilitation is to last 6-8 months With the support of the CBR, B&N Bank has maintained its market position and continues active operations across all its main business lines 2

4 Key stages of the financial rehabilitation of B&N Bank and Rost Bank 21 September 2017: Introduction of Temporary Administration at B&N Bank and Rost Bank Stage 1 (Temporary Administration) Duration: up to 4 months Assessment of the financial position of B&N Bank and Rost Bank On 13 October 2017, the Central Bank of Russia approved the plan for its participation in the bail-out of B&N Bank Stage 2 (Temporary Administration / Banking Sector Consolidation Fund) Duration: 2-4 months Recapitalisation / Share issue to the Central Bank of Russia Stage 3 Sustainable operation of the Banks under new ownership and management team Upon completion of stage 2 of the financial rehabilitation, the Banks will be recapitalised to the required level 3

5 Current and future ownership of B&N Bank and Rost Bank (upon completion of 2 nd stage of financial rehabilitation) Current and Future Beneficial Shareholder Structure of B&N Bank Mikhail Gutseriev 27.6% Other 1.2% Current shareholders 0%-25% Mikail Shishkhanov 71.1% CBR 75%-100% Note: Beneficial ownership as at 29 September Beneficial ownership shares are calculated based not proportionally on shareholdings in companies under joint ownership but entirely in favour of the controlling shareholder in a given company (in line with current CBR methodology) Current and Future Beneficial Shareholder Structure of Rost Bank Current shareholders 0%-25% Mikail Shishkhanov 100% CBR 75%-100% The size of the CBR s shareholding will depend on the results of Stage 1 (assessment of the Banks financial position) and the decision of the Banking Sector Consolidation Fund in Stage 2 4

6 B&N Bank and Rost Bank Governance B&N Bank Temporary Administration Rost Bank Temporary Administration Head of Temporary Administration Dmitry Pozhidayev Head of Temporary Administration Anton Kuznetsov Deputy Head of Temporary Administration Deputy Head of Temporary Administration Deputy Head of Temporary Administration Deputy Head of Temporary Administration Sergey Shevchenko Denis Meshcheryakov Sergey Shevchenko Roman Romanenko B&N Bank Management Rost Bank Management CEO Yevgeny Davydovich CEO Kirill Lyubentsov 5

7 Perimeter of Temporary Administration B&N Bank Group and Rost Bank Temporary Administration Introduced PJSC B&N Bank (Moscow) JSC Rost Bank (Moscow) Mikail Shiskhanov shareholding: 100% B&N Bank shareholding: 79.2% No Temporary Administration Introduced B&N Bank shareholding: 99.7% JSC B&N Bank Digital (Moscow) JSC Uralprivatbank (Yekaterinburg) Legal merger into B&N Bank to be completed in Q

8 B&N Bank: recent developments On 20 September 2017, the Central Bank of Russia provided a credit line to support B&N Bank s liquidity position On 22 September 2017, Standard & Poor s confirmed B&N Bank s credit rating at B and placed it on CreditWatch Developing Customer account outflows have ceased and the Bank s liquidity position has stabilised 7

9 Overview of current business

10 B&N Bank: current business operations B&N Bank has maintained its market position and continues operations across all its main business lines, including: Retail and corporate lending, including to SMEs Taking retail and corporate deposits Participation in tenders for deposits of State companies and regional administrations Issuing debt securities / arranging bond issues for clients (DCM) Active issuance of guarantees under 44-FZ (Law on State Procurement) Active measures to support business in Russia s regions 9

11 B&N Bank amongst the largest Russian banks Top 10 Russian Banks by Total Assets, end H RUB trln Market share: B&N Bank: 1.6% Sberbank VTB GPB RAB Otkritie Alfa CBM PSB B&N UniCredit ROSSIYA State-owned bank Privately-owned bank Bank under BSCF Subsidiary of international bank financial rehabilitation Top 10 Russian Banks by Retail Deposits, end H Systemically important financial institution (per CBR definition) RUB trln 11.0 Market share: B&N Bank: 2.4% Sberbank VTB RAB Alfa GPB Otkritie B&N PSB Raiffeisen CBM Sovcom State-owned bank Privately-owned bank Bank under BSCF Subsidiary of international bank financial rehabilitation Systemically important financial institution (per CBR definition) Note: rankings based on Fitch Russian Banks Datawatch (6М 2017) consolidated by group 1 On 29 August 2017, the Central Bank of Russia announced that it was putting FC Otkritie into temporary administration and would become the controlling shareholder with a shareholding of not less than 75%; on 21 September 2017, it announced the same vis-à-vis B&N Bank 10

12 Multichannel distribution network with nationwide reach Distribution network Mobile application >400 offices Presence in 64 regions and in 173 cities ~15,000 ATMs 2 ~23,000 POS terminals #1 internet bank (Russia) 3 #2 mobile bank (Russia) 3 #1 Internet Bank for retail clients (Russia) 3 Kaliningrad St. Petersburg Pskov Murmansk Smolensk Novgorod Arkhangelsk Naryan-Mar Tver Orel Moscow Syktyvkar Kursk Nizhny Novgorod Voronezh Rostov Kazan Ulyanovsk Perm Saratov Khanty-Mansiysk Yekaterinburg Krasnodar Samara Surgut Volgograd Ufa Tyumen Stavropol Orenburg Chelyabinsk Kurgan Tomsk Omsk Krasnoyarsk Novosibirsk Kemerovo Barnaul Gorno-Altaisk Abakan Irkutsk Ulan-Ude Chita Khabarovsk Vladivostok Best Mobile Banking App in Central & Eastern Europe 4 #2 Mobile Bank for retail clients (Russia) 3 + International presence: Athens Branch (Greece) Market share key 1 : 3-5% 1%-3% <1% 0% 1 Calculated as the total pro forma market share of the combined banking group s client business in each region as at 31 Dec 2016 based on adapted CBR data 2 Own ATM network of B&N Bank, plus reciprocal partnership arrangements 3 B&N Bank position based on Markswebb Rank & Report 2017 (in Russia) ( 4 Global Finance: 2016 World s Best Digital Banks Awards 11

13 Business segment overview Corporate & Investment Banking (CIB) ~4,000 customers #9 / #14 by corporate deposits 1 #12 / #18 by corporate loans 1 Retail Banking (RB) ~4.7 mln customers #3 / #7 by retail deposits 1 #10 / #15 by retail loans 1 SME Banking (SME) ~90,000 customers #8 by loans to individual entrepreneurs 2 #17 by SME loans issued in Rankings based on Fitch Russian Banks Datawatch (6M 2016), consolidated by group, show ranking amongst privately-owned Russian banks and all Russian banks 2 Expert RA ranking for 2016: H Segmental Structure Customer Loans Customer Accounts SME 3% RB 19% CIB 78% CIB 16% SME 7% RB 77% 12

14 DCM update

15 B&N Bank: domestic ruble bonds (1/2) As at 1 September 2017, B&N Bank had 17 ruble bond issues in circulation with a total nominal value of RUB 133 billion PJSC B&N Bank Ruble bonds RUB Issuer In the period from 1 January to 1 September 2017, the Bank executed 12 put options on its ruble bonds with a total nominal value of RUB 83.0 billion. RUB billion of bonds were presented for buy-back, with the majority of the bonds that were bought back by the Bank subsequently being successfully placed back into the market Timetable of Upcoming Put Options, RUB bln

16 B&N Bank: domestic ruble bonds (2/2) Developments in September 2017 had a negative effect on price of the Bank s domestic ruble bonds with prices decreasing by more than 20%. As a result of the timely actions of the CBR, prices returned to 100% of par as at 19 October 2017 Price and Trading Volume Dynamics B&N BO-08 RUB Bonds Data as at 19 October 2017 Price and Trading Volume Dynamics B&N BO-P02 RUB Bonds Source: QUIK 15

17 B&N Bank: Eurobond Key Terms Issuer B&N Bonds D.A.C. Borrower B&N Bank (Public Joint-Stock Company) Issue US$ Loan Participation Notes ( LPN ) Size US$150 Million Tenor 3 years + 3 days Settlement Date 24 March 2016 Maturity Date 27 March 2019 Issuer / Issue Ratings B- (neg.) from S&P [Currently B CreditWatch Developing from S&P] Format Reg S only Coupon 8.50% Re-offer Yield 8.50% Re-offer Price Denomination US$200K + 1K Listing Vienna Stock Exchange, Irish Stock Exchange Moscow Exchange Governing Law English Law Bookrunners SC Lowy (HK), Xiaxin Securities (HK) B&N Bank was the first Russian bank to go to the international debt capital markets in In Q1 2016, B&N Bank issued a US$ 150 million Eurobond The issue had a high level of liquidity with the price reaching 106% of par before the onset of the Russian banking sector crisis Developments in September 2017 had a negative impact on the Eurobond s price with a decrease of more than 20% As a result of the timely actions of the CBR, the price recovered to 99.9% of par as at 19 October 2017 Data as at 19 October 2017 B&N Bank Eurobond Price Dynamics CURRENT PRICE % Investor Analysis Investor Type Investor Geography 20% 42% 56% 44% 38% Asset managers Banks Private Banks Europe Asia Source: Bloomberg 16

18 Subordinated loans / deposits

19 B&N Bank: subordinated loans / deposits Issue Date Instrument Borrower Amount Currency Initial term Date of conversion into perpetual instrument Perpetual Subordinated Loans / Deposits (included in Tier 1 capital) Subordinated deposit ех-b&n Bank 100 million USD 10 years Subordinated deposit ех-b&n Bank 50 million USD 10 years Subordinated loan ех-mdm Bank 76.5 million USD 10 years Subordinated Loans from the Deposit Insurance Agency (included in Tier 2 capital) Comments Perpetual subordinated instruments are subject to write-off or conversion into equity under the following circumstances / triggers: Regulatory Core Tier 1 capital adequacy ratio (N 1.1), calculated in accordance with CBR Instruction 139-I, falls below 5.125% for a total of 6 or more banking days within a period of 30 consecutive banking days; or CBR Banking Oversight Committee approval of a CBR or Deposit Insurance Agency (DIA) Bankruptcy Prevention Plan, envisaging the provision of CBR or DIA financial support in accordance with the Federal Law on Bankruptcy Subordinated loan (through OFZ injection) Subordinated loan (through OFZ injection) ех-b&n Bank 8.8 billion RUB years n/a ех-mdm Bank 9.0 billion RUB years n/a Subordinated instruments are subject to conversion into equity under the following circumstances / triggers: Regulatory Core Tier 1 capital adequacy ratio (N 1.1), calculated in accordance with CBR Instruction 139-I, falls below 2.0% for a total of 6 or more banking days within a period of 30 consecutive banking days; or CBR Banking Oversight Committee approval of a CBR or Deposit Insurance Agency (DIA) Bankruptcy Prevention Plan, envisaging the provision of CBR or DIA financial support in accordance with the Federal Law on Bankruptcy B&N Bank has no subordinated bonds or other publicly traded subordinated instruments 18

20 Disclaimer By attending the meeting where the presentation is made, or by reading the presentation slides, you agree to the following limitations and notifications and represent that you are a person who is permitted under applicable law and regulation to receive information of the kind contained in this presentation. This presentation has been prepared by B&N Bank (the Bank ). The Bank has obtained the information in this presentation from sources it believes to be reliable. Although the Bank has taken all reasonable care to ensure that the information herein is accurate and correct, the Bank makes no representation or warranty, express or implied, as to the accuracy, correctness or completeness of such information. Furthermore, the Bank makes no representation or warranty, express or implied, that its future operating, financial or other results will be consistent with results implied, directly or indirectly, by such information or with the Bank s past operating, financial or other results. Any information herein is as of the date of this presentation and may change without notice. The Bank undertakes no obligation to update the information in this presentation. In addition, information in this presentation may be condensed or incomplete, and this presentation may not contain all material information in respect of the Bank. Certain numbers in this presentation may be based on non-audited financial statements. The Bank makes no representation, direct or implied, that these figures are true and correct, and you should not rely on such numbers as having been audited or otherwise independently verified. Certain numbers may be presented differently once audited, and the Bank takes no responsibility and accepts no liability for such changes and accepts no responsibility for providing the final audited financial statements to you once the audit has been completed. This presentation may also contain forward-looking statements that relate to, among other things, the Bank s plans, objectives, goals, strategies, future operations and performance. Such forward-looking statements may be characterized by words such as anticipates, estimates, expects, projects, believes, intends, plans, may, will and should and similar expressions but are not the exclusive means of identifying such statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the Bank s operating, financial or other results to be materially different from the operating, financial or other results expressed or implied by such statements. Although the Bank believes the basis for such forward-looking statements to be fair and reasonable, the Bank makes no representation or warranty, express or implied, as to the fairness or reasonableness of such forward-looking statements. Furthermore, B&N Bank makes no representation or warranty, express or implied, that the operating, financial or other results anticipated by such forward-looking statements will be achieved. Such forward-looking statements represent, in each case, only one of many possible scenarios and should not be viewed as the most likely or standard scenario. The Bank undertakes no obligation to update the forward-looking statements in this presentation. This presentation is for informational purposes only, is not intended for potential investors and does not constitute, or form part of, and should not be construed as, an offer to sell or issue, or invitation to purchase or subscribe for or the solicitation of an offer to buy, acquire or subscribe for, any securities of the Bank or any of its subsidiaries, joint ventures or affiliates in any jurisdiction or an inducement to enter into investment activity. No part of this presentation, nor the fact of its presentation or distribution, should form the basis of, or be relied on in connection with, any offer, contract, commitment or investment decision whatsoever and it does not constitute a recommendation regarding the securities of the Bank. Nothing in this presentation constitutes an offer of securities for sale in any jurisdiction where it is unlawful to do so. Neither the presentation nor any part or copy of it may be published, transmitted or distributed, directly or indirectly, in or into the United States, its territories or possessions or to any U.S. person as such terms are defined in Regulation S under the United States Securities Act of 1933, as amended (the Securities Act ), except to Qualified Institutional Buyers as defined in Rule 144A under the Securities Act. Any failure to comply with this restriction may constitute a violation of United States securities laws. By attending the meeting where the presentation is made, or by reading the presentation slides, you represent and warrant that you are either (1) a Qualified Institutional Buyer or (2) a non-u.s. person located outside the United States and to the extent you purchase any Securities in B&N Bank you will be doing so pursuant to Rule 144A or Regulation S under the Securities Act. This presentation should not be treated as advice relating to legal, taxation, financial, accounting or investment matters. By attending this presentation you (i) acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Bank and of the risks and merits of any investment in the Bank s shares and securities, and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the Bank s business and (ii) agree to be bound by the foregoing terms. 19